"Naked" Sponsored Access

OCT 2009 Source: GOLDMAN SACHS

Our take on current and proposed US equity market structure

Naked sponsored access is the practice of a non-broker-dealer client using the exchange membership of a broker-dealer without any pre-trade validations.

We support regulation that would require pre-trade, during trade, and post-trade risk monitoring for sponsored access.

We share concerns about market participants accessing exchanges directly without pre-trade risk assessment. We believe that naked sponsored access introduces the potential for significant systemic risks due to the lack of appropriate pre/intra/post trade risk controls. Goldman Sachs does not allow any customer to access the exchanges without first using our pre-trade risk management systems.

>> Goldman Sachs Letter to the SEC, Re: Re: Proposed Rule 15c3-5, Risk Management Controls for Brokers or Dealers with Market Access, File No. S7-03-10, March 30, 2010 [PDF 4.6 MB]