June 13, 2023

Vanessa A. Countryman
Secretary
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549-1090

Re: Supplemental Information and Reopening of Comment Period for Amendments to Exchange Act Rule 3b-16 Regarding the Definition of “Exchange” (File No. S7-02-22)

Dear Ms. Countryman:

The Asset Management Group of the Securities Industry and Financial Markets Association (“SIFMA AMG”)1 appreciates the opportunity to provide comments to the Securities and Exchange Commission (the “Commission” or “SEC”) on the above-referenced release (the “Reopening Release”)2 that provides supplemental information and reopens the comment period for the Commission’s January 2022 proposal to amend Rule 3b-16 and Regulation ATS (the “Proposal”).3

Overview:
As stated in SIFMA AMG’s initial comment letter submitted on April 18, 2022 (“SIFMA AMG Letter I”)4, the Proposal makes a number of changes to an existing regulation that has functioned very well. In our view, the broad drafting of the Proposal, even as clarified in the Reopening Release, suggests a dramatic expansion of regulatory scope and obligations – in ways unrelated to a data-driven identification of problems requiring attention. And it is the risk of such an expansion of scope and obligations that presents the most troubling consequences.

 

1 SIFMA AMG brings the asset management community together to provide views on U.S. and global policy and to create industry best practices. SIFMA AMG’s members represent U.S. and global asset management firms whose combined assets under management exceed $45 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds.

2 Supplemental Information and Reopening of Comment Period for Amendments Regarding the Definition of “Exchange,” Exchange Act Release No. 97309 (April 14, 2023), 88 Fed. Reg. 29448 (May 5, 2023), available at https://www.govinfo.gov/content/pkg/FR-2023-05-05/pdf/2023-08544.pdf

3 Amendments to Exchange Act Rule 3b-16 Regarding the Definition of “Exchange” and Alternative Trading Systems (ATSs) That Trade U.S. Treasury and Agency Securities, National Market System (NMS) Stocks, and Other Securities, Exchange Act Release No. 94062 (Jan. 26, 2022), 87 Fed. Reg. 15496 (Mar. 18, 2022), available at https://www.govinfo.gov/content/pkg/FR-2022-03-18/pdf/2022-01975.pdf.

4 Letter from Lindsey Weber Keljo, Acting Head, and William C. Thum, Managing Director and Assistant General Counsel, SIFMA AMG, to Vanessa A. Countryman, Secretary, SEC, on the Proposal (April 18, 2022), available at https://www.sec.gov/comments/s7-02-22/s70222-20124028-280153.pdf.