SEC Considers Revising Broker Registration Rules Aiming to Strengthen Supervision of Cross-Market and OTC Trading

Odaily Planet Daily News The U.S. Securities and Exchange Commission (SEC) announced that it is considering final revisions to the rules related to the registration of brokers with national securities associations. register. The SEC's revision concerns Rule 15b9-1, which was expanded in 1976. The rule was originally enacted in the 1960s to allow a limited number of exchange members not to be members of the National Association of Securities Dealers (NASD, a predecessor to FINRA). But with the rapid changes in the market, especially the rise of high-frequency trading, many brokers have a lot of activity across exchanges or off-exchange. However, some brokers still rely on outdated exemptions from registration with national securities associations, which has created a regulatory gap. Accordingly, these amendments update and narrow the circumstances under which a broker-dealer is not required to register with a national securities association. Membership in national securities associations will help to enhance sound and consistent regulation, particularly of cross-market and over-the-counter transactions. For example, firms that join FINRA will increase transparency and strengthen oversight of the Treasury market because FINRA requires its members to report post-trade activity in these markets. This will benefit investors and a fair, orderly, and efficient market, the SEC said.