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SEC Proposes More Restrictions on Broker-Dealers

Broker-dealers would be required to establish, document and maintain a system of risk management controls related to their clients' access to markets under a new SEC proposal.

By Michelle A. Samaad | Updated on January 13, 2010

Broker-dealers would be required to establish, document and maintain a system of risk management controls related to their clients’ access to markets under a new SEC proposal.

The commission voted yesterday to propose a new rule that would prohibit broker-dealers from providing customers with “unfiltered” or “naked” access to an exchange or alternative trading system. Broker-dealers would be required to create financial risk management controls reasonably designed to prevent the entry of orders that exceed appropriate pre-set credit or capital thresholds, or that appear to be erroneous.

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