SEC Rule 15c3-5, the market access rule
A broker-dealer with market access must have risk-management controls that prevent orders exceeding pre-set credit or capital thresholds, erroneous orders, and orders that break rules, applied automatically before the order goes out.
Draft mapping. Drafted by the Register's agents from the rule's text and not yet confirmed by a person. It is the Register's reading, not legal advice: whether and how the rule applies to you is a question for counsel.
Controls this rule maps to
Required by the text The rule's text requires a measure that is this control, or plainly includes it. Implied A binding rule whose purpose needs this control, but whose text does not name it. The Register's reading. Recommended A voluntary standard or guidance recommends it; nothing binds you to it. Proposed Appears in a proposed rule or proposed provision that is not yet in force.
| Control | Strength | Where in the rule, and why | Confidence | Missing or failed in |
|---|---|---|---|---|
| Rate and magnitude limits C-X1 | Required by the text | pre-set credit and capital thresholds that reject orders automatically | high | 3 cases |
| Pre-execution validation C-D1 | Required by the text | pre-trade validation of orders before they reach the market | high | 3 cases |
| Kill switch faster than the actor C-X2 | Implied | the firm must be able to stop its own flow immediately (Knight) | medium | 2 cases |
Cases that cite this rule
| Case | How the case cites it | Outcome |
|---|---|---|
| Knight Capital 2012 | SEC Rule 15c3-5 (Market Access Rule) | Ended in harm |