FINRA and Green Exchange Split Watchdog Duties: SEC Seeks Input
Published Date: 6/26/2025
Notice
Summary
FINRA and Green Impact Exchange (GIX) teamed up to decide who watches over which rules for their shared members, so companies don’t get checked twice for the same thing. This new plan, filed with the SEC, aims to cut down on extra work and costs for brokers who belong to both groups. The SEC is now asking for public feedback before making it official, with no immediate money changes but smoother future checks.
Analyzed Economic Effects
4 provisions identified: 1 benefits, 1 costs, 2 mixed.
FINRA Will Do Exams for Dual Members
If your firm is a GIX member and also a FINRA member (a “Dual Member”), FINRA would assume examination, surveillance, and enforcement responsibility for a listed set of GIX rules and certain federal securities rules (the "Common Rules"). The plan was filed June 10, 2025 and the SEC may declare it effective after July 17, 2025.
Operational Changes: Registrations, Branches, Complaints, Ads
Under the Agreement, Dual Members must submit partner/officer/registered‑person applications and branch office openings/changes/terminations to FINRA, GIX will forward customer complaints to FINRA, and FINRA will review advertising submitted to FINRA (subject to applicable FINRA filing fees). These processes are effective if the SEC approves the plan (the SEC may act after July 17, 2025).
No Immediate Fee; 90-Day Notice for Future Charges
The Agreement says FINRA will not charge GIX for performing the allocated regulatory responsibilities, but FINRA may impose charges in the future if it gives GIX 90 days' advance written notice. If FINRA imposes a charge, GIX can terminate the Agreement at the time the charge is imposed; FINRA's responsibilities continue until the SEC approves termination.
GIX Keeps Trading Surveillance and DEA Duties
The Agreement expressly leaves to GIX the surveillance, examination, investigation, and enforcement for trading activities in GIX's own marketplace, GIX's duties as a Designated Examining Authority under Rule 17d-1, and GIX rules that are not listed as Common Rules. The SEC may approve the Agreement after July 17, 2025.
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