SEC Keeps Brokers' Risk Paperwork Rolling Indefinitely
Published Date: 9/16/2025
Notice
Summary
The SEC is extending the paperwork rules for brokers and dealers who trade directly on exchanges or trading systems. These firms must keep strong risk controls, review them regularly, and have their CEOs confirm compliance every year. This keeps trading safer and more transparent, with no new costs or deadlines—just a continuation of current rules.
Analyzed Economic Effects
3 provisions identified: 0 benefits, 3 costs, 0 mixed.
Mandatory risk controls and records
If your firm is a broker or dealer that trades directly on an exchange or an alternative trading system (ATS), you must establish, document, maintain, and regularly review risk management controls and supervisory procedures. You must preserve copies of those procedures and documentation of each review as part of your books and records consistent with Rule 17a-4.
Estimated time and dollar burden
The SEC estimates 500 broker-dealers will each spend about 160 hours per year (80,000 hours total) to comply, with an average internal cost of about $447.92 per hour for a total internal cost of about $35,833,500 per year. The SEC also estimates average annual external hardware and software costs of about $20,500 per broker-dealer, or $10,250,000 in the aggregate per year.
Annual CEO compliance certification
The firm's Chief Executive Officer (or equivalent officer) must certify annually that the broker-dealer's risk management controls and supervisory procedures comply with the rule and that the required reviews were conducted. Those certifications must be preserved as part of the broker-dealer's books and records consistent with Rule 17a-4(b).
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