Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Order Approving and Declaring Effective an Amended Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc., MEMX LLC, and MX2 LLC
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The SEC approved an amended 17d-2 Plan that adds MX2 LLC as a new participant alongside MEMX LLC and FINRA. The plan allocates to FINRA the responsibility to examine and enforce compliance for common member firms with respect to rules that are substantially similar between FINRA and the two exchanges. This eliminates duplicative examinations and reduces regulatory costs for broker-dealers that are members of both FINRA and MEMX or MX2. The amended plan also updates procedures for handling statutory disqualifications and requires FINRA to provide notice before charging the exchanges for regulatory services. The Certification of Common Rules will be reviewed at least annually and can be updated without filing a new plan unless the similarity status of a rule changes.
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Key Changes
- Addition of MX2 LLC as a new participant to the existing FINRA-MEMX 17d-2 Plan
- Allocation of examination and enforcement responsibilities to FINRA for common members of MEMX, MX2 and FINRA
- Annual review requirement (at least once per year) of the Certification of Common Rules by MEMX and MX2
+ 3 more changes with Pro
Obligations
What this law requires
FINRA must examine and enforce compliance for common members with respect to rules that are substantially similar between FINRA and MEMX/MX2, as listed in the Certification of Common Rules
MEMX and MX2 must review the Certification of Common Rules at least annually to determine if rules remain substantially similar to FINRA rules
MEMX and MX2 must submit updated lists to FINRA identifying Common Rules to be added, deleted, or confirmed based on substantial similarity to FINRA rules
FINRA must provide notice to MEMX and MX2 before charging them for performing regulatory responsibilities under the Amended Plan
FINRA must follow updated procedures regarding statutory disqualifications as specified in the Amended Plan