FINRA and Exchange Team Up to Skip Double Regulation Hassles
Published Date: 5/8/2025
Notice
Summary
FINRA and 24X National Exchange teamed up to split up who watches over their shared members, so these companies won’t get double-checked and pay extra fees. This new plan, filed with the SEC, aims to make regulation smoother and less costly starting soon. The SEC wants to hear what people think before giving the green light.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 1 costs, 1 mixed.
Cuts duplicate exams for dual members
If your firm is a member of both 24X and FINRA (a “Dual Member”), the plan would reduce regulatory duplication so your firm would not face multiple examinations by both SROs. The plan is filed April 24, 2025 and the SEC may declare it effective after May 23, 2025 if approved.
FINRA becomes primary examiner for common rules
Under the proposed Agreement, FINRA would assume examination, surveillance, investigation, and enforcement responsibilities for rules 24X certifies as "Common Rules" for Dual Members, and would process applications, branch office filings, customer complaints, and advertising filings for those Dual Members. The Agreement is dated April 17, 2025 and becomes effective on the date the SEC approves it.
24X keeps trading surveillance and DEA duties
24X would retain full responsibility for surveillance, examination, investigation and enforcement related to trading activities on 24X's marketplace, its duties as a Designated Examining Authority under Rule 17d-1, and any 24X rules that are not listed as Common Rules. This allocation is part of the April 17, 2025 Agreement filed with the SEC on April 24, 2025.
FINRA initially performs services at no charge
The Agreement states FINRA will not charge 24X for performing the allocated regulatory responsibilities, but FINRA may later impose charges if it gives 90 days' advance written notice; if FINRA imposes a charge, 24X may terminate the Agreement at that time (while FINRA's responsibilities continue until SEC approval of termination).
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