TechFlow news: The U.S. Securities and Exchange Commission (SEC) has announced it is considering final amendments to rules relating to broker-dealer registration with national securities associations, aiming to clarify which broker-dealers must register with a national securities association such as the Financial Industry Regulatory Authority (FINRA).
The SEC's revisions pertain to Rule 15b9-1, originally established in the 1960s and expanded in 1976, which was designed to allow a limited number of exchange members to operate without becoming members of the National Association of Securities Dealers (NASD), FINRA’s predecessor. However, with the rise of high-frequency trading, many broker-dealers now conduct substantial activities across exchanges or over-the-counter (OTC). Some continue to rely on outdated exemptions from registration with national securities associations, creating a regulatory gap.
As a result, these amendments modernize and narrow the circumstances under which broker-dealers may avoid registration with a national securities association. Membership in such associations will help strengthen robust and consistent oversight, particularly for cross-market and OTC trading activities.
The SEC stated that this will benefit investors and promote fair, orderly, and efficient markets.
