SEC Censures OTC Link, Fines $575,000 Over Regulation SCI Failures

Regulation SCI enforcement has largely focused on exchanges and clearing venues, so a settled action against an OTC broker-dealer's systems compliance signals the SEC is widening where it applies that infrastructure standard. For OTC desks and alternative trading operators, the practical takeaway is that technology resiliency and reporting obligations are being treated as core market-conduct issues rather than back-office matters. The size of the penalty is modest relative to the censure, suggesting the finding itself, not the money, is the message. Whether SCI scrutiny extends further into the OTC layer is the open question.