SEC Rule 17Ad-27 - Information Collection for Settlement Cycle Adjustment
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This rule requires central matching service providers (CMSPs) to improve the efficiency of security trade settlements by facilitating straight-through processing. These CMSPs, exempt from registering as clearing agencies, must develop and report procedures that promote automatic transaction confirmation. It impacts CMSPs in the securities industry, urging them to enhance their operational processes and submit annual performance reports.
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Key Changes
- CMSPs must facilitate straight-through processing for security transactions.
- Annual reporting to the SEC required for CMSP operations and improvements.
- Automated transaction process enhancements are mandatory for CMSPs.
Obligations
What this law requires
Central matching service providers (CMSPs) must establish, implement, maintain, and enforce policies and procedures reasonably designed to facilitate straight-through processing for transactions involving broker-dealers and their customers.
CMSPs must submit an annual report to the SEC that includes a summary of their policies and procedures for straight-through processing, a qualitative description of progress made, and a quantitative presentation of specific trade-related data.
The annual report submitted by CMSPs must include total numbers for trades submitted, allocations submitted, confirmations submitted, cancellations, and percentages of confirmations matched on trade date.
Data sets in the annual report must be organized month-by-month for the twelve months covered, separated by the use of central matching and electronic trade confirmation services, and presented on an anonymized and aggregated basis.
CMSPs must document ongoing monitoring and compliance activities concerning their written policies and procedures as outlined in Rule 17Ad-27.