March 1, 2021

Via Electronic Mail: [email protected]

Vanessa Countryman
Secretary
Securities and Exchange Commission
100 F Street NE., Washington, DC 20549

Re: File No. S7-12-20; Regulation ATS for ATSs that Trade U.S. Government Securities, NMS Stock and Other Securities; Regulation SCI for ATSs that Trade U.S. Treasury Securities and Agency Securities; and Electronic Corporate Bond and Municipal Securities Markets

Dear Ms. Countryman:

The Securities Industry and Financial Markets Association (“SIFMA”)1 respectfully submits this letter to the U.S. Securities and Exchange Commission (“Commission”) to comment on the above referenced proposal2 to amend Regulation ATS under the Securities Exchange Act of 1934 (“Exchange Act”) for alternative trading systems (“ATSs”) that trade government securities as defined under Section 3(a)(42) of the Exchange Act. The Commission proposes to eliminate the exemption from compliance with Regulation ATS for an ATS that limits its securities activities to government securities or repurchase and reverse repurchase agreements on government securities, and registers as a broker-dealer or is a bank. Thus, the Commission proposes to require a government securities ATS to file publicly Form ATS-G, which would require such ATS to disclose information about its manner of operations and the ATS-related activities of the ATS operator and provide a process for the Commission to review Form ATS-G filings. The Commission also proposes to apply the fair access rule under Rule 301(b)(5) of Regulation ATS and Regulation Systems Compliance and Integrity (“SCI”) to government securities ATSs that meet certain volume thresholds in U.S. Treasury Securities or in a debt security issued or guaranteed by a U.S. executive agency, as defined in 2 U.S.C. 622(8). Finally, the Commission issued a concept release on the regulatory framework for electronic platforms that trade corporate debt and municipal securities.

SIFMA generally supports increased operational transparency related to the basic rules of operation of fixed income and government securities ATSs. There is value in operational transparency related to the basic rules of operation of the venue, the ability of priority or preferential treatment (if any) for certain desks or clients and information on risk controls. Among other things, more operational transparency would aid investors in conducting analysis of executions. As noted in our previous comment letter,3 SIFMA supports tailoring Form ATS disclosures in a manner that addresses the unique characteristics of the fixed income and other marketplaces to best serve investors.