SEC Splits Watchdog Duties: Less Double-Regulation for Firms
Published Date: 7/23/2025
Notice
Summary
The SEC just gave the green light to a new plan that splits up who watches over certain financial companies between FINRA and GIX National Exchange. This means fewer double-checks for companies that belong to both groups, saving time and money. The change kicks in right away, making regulation smoother and less costly for those involved.
Analyzed Economic Effects
5 provisions identified: 3 benefits, 1 costs, 1 mixed.
Fewer Duplicate Exams, Lower Costs
If your firm is a member of both GIX and FINRA (a "Dual Member"), the SEC-approved plan reduces duplicate examinations by allocating certain exams to FINRA. The Commission said the Plan should reduce unnecessary regulatory duplication and promote efficiency by reducing costs to common members; the Plan was declared effective on July 18, 2025.
FINRA Will Conduct Many Exams
Under the Plan, FINRA will assume examination and enforcement responsibility for Dual Members with respect to GIX rules that are substantially similar to FINRA rules and for certain federal securities laws and rules listed in the Plan's Certification. The Certification will be reviewed at least annually (or more often if rules change).
Plan Aims to Protect Investors
The Commission found the Plan should foster cooperation among SROs and promote investor protection by coordinating regulatory functions between FINRA and GIX. The Commission approved the Plan under Section 17(d) and Rule 17d-2(c) as being in the public interest and for the protection of investors.
GIX Keeps Trading Oversight
GIX will retain full responsibility for surveillance, examination, investigation, and enforcement relating to trading activities on its marketplace and for GIX rules that are not listed as Common Rules. The Plan also acknowledges GIX may, at its discretion, exercise concurrent jurisdiction for investigations related to transactions on GIX.
Plan Effective Immediately; Members Will Be Notified
The SEC approved and declared the 17d-2 Plan effective as ordered on July 18, 2025, and ordered that GIX is relieved of responsibilities allocated to FINRA under the Plan. The Parties must notify all members affected by the Plan of their rights and obligations under the Plan.
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