SEC Narrows Broker-Dealer Exemption

The SEC has released a final rule to “narrow the exemption from Section 15(b)(8) of the Securities Exchange Act of 1934, which requires any broker or dealer registered with the Commission to become a member of a national securities association unless the broker or dealer effects transactions in securities solely on an exchange of which it is a member.” The purpose of the amendments is to improve broker-dealer oversight by the Financial Industry Regulatory Authority Inc. (FINRA), which “currently is the only registered national securities association.”

The final rule’s effective date is 60 days, and its compliance date is 365 days, after the date of the rule’s publication in the Federal Register. For more information about the amendments, see the press release and fact sheet — as well as statements by SEC Chair Gary Gensler and Commissioners Caroline Crenshaw, Jaime Lizárraga, Hester M. Peirce, and Mark Uyeda — on the SEC’s Web site.