The SEC is considering revising broker registration rules to strengthen oversight of cross-market and over-the-counter trading

ChainCatcher News, the U.S. Securities and Exchange Commission (SEC) announced that it is considering final amendments to rules related to brokers registered with the National Association of Securities Dealers (NASD) to determine which brokers need to register with national securities associations (such as the Financial Industry Regulatory Authority, FINRA), which will strengthen cross-market and over-the-counter regulation of some of the most active participants in the capital markets.

This SEC amendment involves Rule 15b9-1, which was expanded in 1976. The rule was originally established in the 1960s to allow a limited number of exchange floor members to not become members of the National Association of Securities Dealers (NASD, the predecessor of FINRA). However, with the rapid changes in the market, especially the rise of high-frequency trading, many brokers have engaged in significant activities across exchanges or over-the-counter. Nevertheless, some brokers still rely on outdated exemptions from national securities association registration, leading to a regulatory gap.