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The PADS Framework for Compliance and Security - Part 2

Gabriel Lowy

Start with The PADS Framework for Compliance and Security - Part 1

Below we highlight new regulations in the global securities industry that underscore the risks companies face when they don’t have a good handle on user experience or application performance across the application delivery chain.

Capital Markets: Pressure to Avoid Market Disruption

Global securities markets have become increasingly reliant on technology and automated systems that operate at light speed. But in recent years, these systems have suffered both minor glitches and major outages. They have also been susceptible to cyberattacks, further underscoring their vulnerability.

To ensure the integrity and resilience of IT systems and reduce the severity and frequency of these disruptions, the Securities and Exchange Commission (SEC) adopted Regulation Systems Compliance and Integrity (Regulation SCI) in November 2015. The regulation applies to so-called SCI entities, including national securities exchanges, certain high-volume alternative trading systems, clearing agencies, plan processors and self-regulatory agencies such as the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB).

Covered entities must design, develop, test, maintain and monitor their operational systems according to Regulation SCI's standards and best practices. These policies apply to nine IT and security domains:


Source: SEC, Tech-Tonics Advisors

Regulation SCI requires new reporting and disclosure of disruptions, intrusions and other adverse events – with special emphasis on customer personal information. There are also new requirements to notify affected customers and plan participants if the events are "major" or involve "critical SCI systems."

Covered entities must perform ongoing audits and risk assessments. This includes evaluating IT governance services performed by specific entities. Material changes to any “SCI system” – whether existing or planned – must be reported on a quarterly basis. If any covered entity does not implement compliant controls or neglects to report failures to the SEC they could be subject to legal action.

Beyond testing requirements built into business continuity and disaster recovery standards, Regulation SCI also mandates industry-wide coordinated testing to ensure systems-wide functionality and safety. While testing has already begun, the industry has until November 2016 to get processes in place.

Market disruptions have resulted in extreme volatility, fractured investor confidence, catastrophic losses and unprecedented fines for compliance violations. Intelligence across the entire application delivery chain is essential for all covered entities to comply with Regulation SCI.

Conclusion

In the software-defined economy application performance and user experience are critical differentiators to drive business and risk management objectives. The risks of poor application performance and user experience include business interruption, eroding employee engagement and customer satisfaction, regulatory noncompliance and reputational damage.

The underbelly of modern distributed computing environments is growing regulatory oversight pertaining to systems efficacy and security. While regulations are nuanced to specific industries, the connectivity and interdependencies of systems are similar across all sectors. Regulators are increasingly focused on these relationships – and the underlying systems and applications – that comprise application delivery chains.

More companies are incorporating cloud, mobile and social into computing architectures, business plans and processes. With the growth of containers and microservices, coupled with the emerging Internet of Things (IoT), it is imperative for IT teams and senior management to embrace the strategic importance of user experience and application performance to achieve ROI and risk management objectives.

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According to Auvik's 2025 IT Trends Report, 60% of IT professionals feel at least moderately burned out on the job, with 43% stating that their workload is contributing to work stress. At the same time, many IT professionals are naming AI and machine learning as key areas they'd most like to upskill ...

Businesses that face downtime or outages risk financial and reputational damage, as well as reducing partner, shareholder, and customer trust. One of the major challenges that enterprises face is implementing a robust business continuity plan. What's the solution? The answer may lie in disaster recovery tactics such as truly immutable storage and regular disaster recovery testing ...

IT spending is expected to jump nearly 10% in 2025, and organizations are now facing pressure to manage costs without slowing down critical functions like observability. To meet the challenge, leaders are turning to smarter, more cost effective business strategies. Enter stage right: OpenTelemetry, the missing piece of the puzzle that is no longer just an option but rather a strategic advantage ...

Amidst the threat of cyberhacks and data breaches, companies install several security measures to keep their business safely afloat. These measures aim to protect businesses, employees, and crucial data. Yet, employees perceive them as burdensome. Frustrated with complex logins, slow access, and constant security checks, workers decide to completely bypass all security set-ups ...

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In high-traffic environments, the sheer volume and unpredictable nature of network incidents can quickly overwhelm even the most skilled teams, hindering their ability to react swiftly and effectively, potentially impacting service availability and overall business performance. This is where closed-loop remediation comes into the picture: an IT management concept designed to address the escalating complexity of modern networks ...

In 2025, enterprise workflows are undergoing a seismic shift. Propelled by breakthroughs in generative AI (GenAI), large language models (LLMs), and natural language processing (NLP), a new paradigm is emerging — agentic AI. This technology is not just automating tasks; it's reimagining how organizations make decisions, engage customers, and operate at scale ...

In the early days of the cloud revolution, business leaders perceived cloud services as a means of sidelining IT organizations. IT was too slow, too expensive, or incapable of supporting new technologies. With a team of developers, line of business managers could deploy new applications and services in the cloud. IT has been fighting to retake control ever since. Today, IT is back in the driver's seat, according to new research by Enterprise Management Associates (EMA) ...

In today's fast-paced and increasingly complex network environments, Network Operations Centers (NOCs) are the backbone of ensuring continuous uptime, smooth service delivery, and rapid issue resolution. However, the challenges faced by NOC teams are only growing. In a recent study, 78% state network complexity has grown significantly over the last few years while 84% regularly learn about network issues from users. It is imperative we adopt a new approach to managing today's network experiences ...

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From growing reliance on FinOps teams to the increasing attention on artificial intelligence (AI), and software licensing, the Flexera 2025 State of the Cloud Report digs into how organizations are improving cloud spend efficiency, while tackling the complexities of emerging technologies ...

The PADS Framework for Compliance and Security - Part 2

Gabriel Lowy

Start with The PADS Framework for Compliance and Security - Part 1

Below we highlight new regulations in the global securities industry that underscore the risks companies face when they don’t have a good handle on user experience or application performance across the application delivery chain.

Capital Markets: Pressure to Avoid Market Disruption

Global securities markets have become increasingly reliant on technology and automated systems that operate at light speed. But in recent years, these systems have suffered both minor glitches and major outages. They have also been susceptible to cyberattacks, further underscoring their vulnerability.

To ensure the integrity and resilience of IT systems and reduce the severity and frequency of these disruptions, the Securities and Exchange Commission (SEC) adopted Regulation Systems Compliance and Integrity (Regulation SCI) in November 2015. The regulation applies to so-called SCI entities, including national securities exchanges, certain high-volume alternative trading systems, clearing agencies, plan processors and self-regulatory agencies such as the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board (MSRB).

Covered entities must design, develop, test, maintain and monitor their operational systems according to Regulation SCI's standards and best practices. These policies apply to nine IT and security domains:


Source: SEC, Tech-Tonics Advisors

Regulation SCI requires new reporting and disclosure of disruptions, intrusions and other adverse events – with special emphasis on customer personal information. There are also new requirements to notify affected customers and plan participants if the events are "major" or involve "critical SCI systems."

Covered entities must perform ongoing audits and risk assessments. This includes evaluating IT governance services performed by specific entities. Material changes to any “SCI system” – whether existing or planned – must be reported on a quarterly basis. If any covered entity does not implement compliant controls or neglects to report failures to the SEC they could be subject to legal action.

Beyond testing requirements built into business continuity and disaster recovery standards, Regulation SCI also mandates industry-wide coordinated testing to ensure systems-wide functionality and safety. While testing has already begun, the industry has until November 2016 to get processes in place.

Market disruptions have resulted in extreme volatility, fractured investor confidence, catastrophic losses and unprecedented fines for compliance violations. Intelligence across the entire application delivery chain is essential for all covered entities to comply with Regulation SCI.

Conclusion

In the software-defined economy application performance and user experience are critical differentiators to drive business and risk management objectives. The risks of poor application performance and user experience include business interruption, eroding employee engagement and customer satisfaction, regulatory noncompliance and reputational damage.

The underbelly of modern distributed computing environments is growing regulatory oversight pertaining to systems efficacy and security. While regulations are nuanced to specific industries, the connectivity and interdependencies of systems are similar across all sectors. Regulators are increasingly focused on these relationships – and the underlying systems and applications – that comprise application delivery chains.

More companies are incorporating cloud, mobile and social into computing architectures, business plans and processes. With the growth of containers and microservices, coupled with the emerging Internet of Things (IoT), it is imperative for IT teams and senior management to embrace the strategic importance of user experience and application performance to achieve ROI and risk management objectives.

Hot Topics

The Latest

According to Auvik's 2025 IT Trends Report, 60% of IT professionals feel at least moderately burned out on the job, with 43% stating that their workload is contributing to work stress. At the same time, many IT professionals are naming AI and machine learning as key areas they'd most like to upskill ...

Businesses that face downtime or outages risk financial and reputational damage, as well as reducing partner, shareholder, and customer trust. One of the major challenges that enterprises face is implementing a robust business continuity plan. What's the solution? The answer may lie in disaster recovery tactics such as truly immutable storage and regular disaster recovery testing ...

IT spending is expected to jump nearly 10% in 2025, and organizations are now facing pressure to manage costs without slowing down critical functions like observability. To meet the challenge, leaders are turning to smarter, more cost effective business strategies. Enter stage right: OpenTelemetry, the missing piece of the puzzle that is no longer just an option but rather a strategic advantage ...

Amidst the threat of cyberhacks and data breaches, companies install several security measures to keep their business safely afloat. These measures aim to protect businesses, employees, and crucial data. Yet, employees perceive them as burdensome. Frustrated with complex logins, slow access, and constant security checks, workers decide to completely bypass all security set-ups ...

Image
Cloudbrink's Personal SASE services provide last-mile acceleration and reduction in latency

In MEAN TIME TO INSIGHT Episode 13, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses hybrid multi-cloud networking strategy ... 

In high-traffic environments, the sheer volume and unpredictable nature of network incidents can quickly overwhelm even the most skilled teams, hindering their ability to react swiftly and effectively, potentially impacting service availability and overall business performance. This is where closed-loop remediation comes into the picture: an IT management concept designed to address the escalating complexity of modern networks ...

In 2025, enterprise workflows are undergoing a seismic shift. Propelled by breakthroughs in generative AI (GenAI), large language models (LLMs), and natural language processing (NLP), a new paradigm is emerging — agentic AI. This technology is not just automating tasks; it's reimagining how organizations make decisions, engage customers, and operate at scale ...

In the early days of the cloud revolution, business leaders perceived cloud services as a means of sidelining IT organizations. IT was too slow, too expensive, or incapable of supporting new technologies. With a team of developers, line of business managers could deploy new applications and services in the cloud. IT has been fighting to retake control ever since. Today, IT is back in the driver's seat, according to new research by Enterprise Management Associates (EMA) ...

In today's fast-paced and increasingly complex network environments, Network Operations Centers (NOCs) are the backbone of ensuring continuous uptime, smooth service delivery, and rapid issue resolution. However, the challenges faced by NOC teams are only growing. In a recent study, 78% state network complexity has grown significantly over the last few years while 84% regularly learn about network issues from users. It is imperative we adopt a new approach to managing today's network experiences ...

Image
Broadcom

From growing reliance on FinOps teams to the increasing attention on artificial intelligence (AI), and software licensing, the Flexera 2025 State of the Cloud Report digs into how organizations are improving cloud spend efficiency, while tackling the complexities of emerging technologies ...