[Federal Register Volume 90, Number 121 (Thursday, June 26, 2025)]
[Notices]
[Pages 27356-27362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-11733]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103295; File No. 4-858]
Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Notice of Filing of Proposed Plan for the Allocation of
Regulatory Responsibilities Between the Financial Industry Regulatory
Authority, Inc. and Green Impact Exchange, LLC
June 23, 2025.
Pursuant to Section 17(d) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 17d-2 thereunder,\2\ notice is hereby given that
on June 10, 2025, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') and Green Impact Exchange, LLC (``GIX'') (together with
FINRA, the ``Parties'') filed with the Securities and Exchange
Commission (``Commission'' or ``SEC'') a plan for the allocation of
regulatory responsibilities, dated June 10, 2025 (``17d-2 Plan'' or the
``Plan''). The Commission is publishing this notice to solicit comments
on the 17d-2 Plan from interested persons.
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\1\ 15 U.S.C. 78q(d).
\2\ 17 CFR 240.17d-2.
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I. Introduction
Section 19(g)(1) of the Act,\3\ among other things, requires every
self-regulatory organization (``SRO'') registered as either a national
securities exchange or national securities association to examine for,
and enforce compliance by, its members and persons associated with its
members with the Act, the rules and regulations thereunder, and the
SRO's own rules, unless the SRO is relieved of this responsibility
pursuant to Section 17(d) or Section 19(g)(2) of the Act.\4\ Without
this relief, the statutory obligation of each individual SRO could
result in a pattern of multiple examinations of broker-dealers that
maintain memberships in more than one SRO (``common members''). Such
regulatory duplication would add unnecessary expenses for common
members and their SROs.
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\3\ 15 U.S.C. 78s(g)(1).
\4\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
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Section 17(d)(1) of the Act \5\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\6\ With
respect to a common member, Section 17(d)(1) authorizes the Commission,
by rule or
[[Page 27357]]
order, to relieve an SRO of the responsibility to receive regulatory
reports, to examine for and enforce compliance with applicable
statutes, rules, and regulations, or to perform other specified
regulatory functions.
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\5\ 15 U.S.C. 78q(d)(1).
\6\ See Securities Act Amendments of 1975, Report of the Senate
Committee on Banking, Housing, and Urban Affairs to Accompany S.
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
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To implement Section 17(d)(1), the Commission adopted two rules:
Rule 17d-1 and Rule 17d-2 under the Act.\7\ Rule 17d-1 authorizes the
Commission to name a single SRO as the designated examining authority
(``DEA'') to examine common members for compliance with the financial
responsibility requirements imposed by the Act, or by Commission or SRO
rules.\8\ When an SRO has been named as a common member's DEA, all
other SROs to which the common member belongs are relieved of the
responsibility to examine the firm for compliance with the applicable
financial responsibility rules. On its face, Rule 17d-1 deals only with
an SRO's obligations to enforce member compliance with financial
responsibility requirements. Rule 17d-1 does not relieve an SRO from
its obligation to examine a common member for compliance with its own
rules and provisions of the federal securities laws governing matters
other than financial responsibility, including sales practices and
trading activities and practices.
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\7\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\8\ See Securities Exchange Act Release No. 12352 (April 20,
1976), 41 FR 18808 (May 7, 1976).
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To address regulatory duplication in these and other areas, the
Commission adopted Rule 17d-2 under the Act.\9\ Rule 17d-2 permits SROs
to propose joint plans for the allocation of regulatory
responsibilities with respect to their common members. Under paragraph
(c) of Rule 17d-2, the Commission may declare such a plan effective if,
after providing for appropriate notice and comment, it determines that
the plan is necessary or appropriate in the public interest and for the
protection of investors; to foster cooperation and coordination among
the SROs; to remove impediments to, and foster the development of, a
national market system and a national clearance and settlement system;
and is in conformity with the factors set forth in Section 17(d) of the
Act. Commission approval of a plan filed pursuant to Rule 17d-2
relieves an SRO of those regulatory responsibilities allocated by the
plan to another SRO.
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\9\ See Securities Exchange Act Release No. 12935 (October 28,
1976), 41 FR 49091 (November 8, 1976).
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II. Proposed Plan
The proposed 17d-2 Plan is intended to reduce regulatory
duplication for firms that are common members of both GIX and
FINRA.\10\ Pursuant to the proposed 17d-2 Plan, FINRA would assume
certain examination and enforcement responsibilities for common members
with respect to certain applicable laws, rules, and regulations.
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\10\ The proposed 17d-2 Plan refers to these common members as
``Dual Members.'' See Paragraph 1(c) of the proposed 17d-2 Plan.
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The text of the Plan delineates the proposed regulatory
responsibilities with respect to the Parties. Included in the proposed
Plan is an exhibit (the ``GIX Certification of Common Rules,'' referred
to herein as the ``Certification'') that lists every GIX rule, and
select federal securities laws, rules, and regulations, for which FINRA
would bear responsibility under the Plan for overseeing and enforcing
with respect to GIX members that are also members of FINRA and the
associated persons therewith (``Dual Members'').
Specifically, under the 17d-2 Plan, FINRA would assume examination
and enforcement responsibility relating to compliance by Dual Members
with the rules of GIX that are substantially similar to the applicable
rules of FINRA,\11\ as well as any provisions of the federal securities
laws and the rules and regulations thereunder delineated in the
Certification (``Common Rules''). In the event that a Dual Member is
the subject of an investigation relating to a transaction on GIX, the
plan acknowledges that GIX may, in its discretion, exercise concurrent
jurisdiction and responsibility for such matter.\12\
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\11\ See paragraph 1(b) of the proposed 17d-2 Plan (defining
Common Rules). See also paragraph 1(f) of the proposed 17d-2 Plan
(defining Regulatory Responsibilities). Paragraph 2 of the Plan
provides that annually, or more frequently as required by changes in
either GIX rules or FINRA rules, the parties shall review and
update, if necessary, the list of Common Rules.
\12\ See paragraph 5 of the proposed 17d-2 Plan.
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Under the Plan, GIX would retain full responsibility for
surveillance and enforcement with respect to trading activities or
practices involving GIX's own marketplace, including, without
limitation, registration pursuant to its applicable rules of associated
persons (i.e., registration rules that are not Common Rules); its
duties as a DEA pursuant to Rule 17d-1 under the Act; and any GIX rules
that are not Common Rules.\13\
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\13\ See paragraph 2 of the proposed 17d-2 Plan.
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The text of the proposed 17d-2 Plan is as follows:
Agreement Between Financial Industry Regulatory Authority, Inc. and
Green Impact Exchange, LLC Pursuant to Rule 17d-2 Under the Securities
Exchange Act of 1934
This Agreement, by and between the Financial Industry Regulatory
Authority, Inc. (``FINRA'') and Green Impact Exchange, LLC (``GIX''),
is made this 10th day of June, 2024 (the ``Agreement''), pursuant to
Section 17(d) of the Securities Exchange Act of 1934 (the ``Exchange
Act'') and Rule 17d-2 thereunder, which permits agreements between
self-regulatory organizations to allocate regulatory responsibility to
eliminate regulatory duplication. FINRA and GIX may be referred to
individually as a ``party'' and together as the ``parties.''
Whereas, the parties desire to reduce duplication in the
examination, surveillance and investigation of their Dual Members (as
defined herein) and in the filing and processing of certain
registration and membership records; and
Whereas, the parties desire to execute an agreement covering such
subjects pursuant to the provisions of Rule 17d-2 under the Exchange
Act and to file such agreement with the U.S. Securities and Exchange
Commission (the ``SEC'' or ``Commission'') for its approval.
Now, Therefore, in consideration of the mutual covenants contained
hereinafter, the parties hereby agree as follows:
1. Definitions
Unless otherwise defined in this Agreement or the context otherwise
requires, the terms used in this Agreement shall have the same meaning
as they have under the Exchange Act and the rules and regulations
thereunder. As used in this Agreement, the following terms shall have
the following meanings:
(a) ``GIX Rules'' or ``FINRA Rules'' shall mean the rules of GIX or
FINRA, respectively, as the rules of an exchange or association are
defined in Exchange Act Section 3(a)(27).
(b) ``Common Rules'' shall mean the GIX Rules that are
substantially similar to the applicable FINRA Rules and certain
provisions of the Exchange Act and SEC rules set forth on Exhibit 1 in
that examination, surveillance or investigation for compliance with
such provisions and rules would not require FINRA to develop one or
more new examination, surveillance or investigation standards, modules,
procedures, or criteria in order to analyze the application of the
rule, or a Dual Member's activity, conduct, or
[[Page 27358]]
output in relation to such provision or rule; provided, however, Common
Rules shall not include the application of the SEC, GIX or FINRA rules
as they pertain to violations of insider trading activities, which is
covered by a separate 17d-2 Agreement by and among Cboe BZX Exchange,
Inc., Cboe BYX Exchange, Inc., Chicago Stock Exchange, Inc., Cboe EDGA
Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry Regulatory
Authority, Inc., MEMX LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq
PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York
Stock Exchange LLC, NYSE American LLC, NYSE Arca Inc., Investors'
Exchange LLC and Long-Term Stock Exchange, Inc. approved by the
Commission on September 23, 2020, as may be amended from time to time.
Common Rules shall not include any provisions regarding (i) notice,
reporting or any other filings made directly to or from GIX, (ii)
incorporation by reference of other GIX Rules that are not Common
Rules, (iii) exercise of discretion in a manner that differs from
FINRA's exercise of discretion including, but not limited to exercise
of exemptive authority, by GIX, (iv) prior written approval of GIX and
(v) payment of fees or fines to GIX.
(c) ``Dual Members'' shall mean those GIX members that are also
members of FINRA and the associated persons therewith.
(d) ``Effective Date'' shall be the date this Agreement is approved
by the Commission.
(e) ``Enforcement Responsibilities'' shall mean the conduct of
appropriate proceedings, in accordance with the FINRA Code of Procedure
(the Rule 9000 Series) and other applicable FINRA procedural rules, to
determine whether violations of Common Rules have occurred, and if such
violations are deemed to have occurred, the imposition of appropriate
sanctions as specified under the FINRA Code of Procedure and FINRA's
sanction guidelines.
(f) ``Regulatory Responsibilities'' shall mean the examination,
surveillance and investigation responsibilities and Enforcement
Responsibilities relating to compliance by the Dual Members with the
Common Rules and the provisions of the Exchange Act and the rules and
regulations thereunder, and other applicable laws, rules and
regulations, each as set forth on Exhibit 1 attached hereto.
2. Regulatory Responsibilities
FINRA shall assume Regulatory Responsibilities for Dual Members.
Attached as Exhibit 1 to this Agreement and made part hereof, GIX
furnished FINRA with a current list of Common Rules and certified to
FINRA that such rules are substantially similar to the corresponding
FINRA Rules (the ``Certification''). FINRA hereby agrees that the rules
listed in the Certification are Common Rules as defined in this
Agreement. Each year following the Effective Date of this Agreement, or
more frequently if required by changes in either GIX Rules or FINRA
Rules, GIX shall submit an updated list of Common Rules to FINRA for
review which shall add GIX Rules not included in the current list of
Common Rules that qualify as Common Rules as defined in this Agreement;
delete GIX Rules included in the current list of Common Rules that no
longer qualify as Common Rules as defined in this Agreement; and
confirm that the remaining rules on the current list of Common Rules
continue to be GIX Rules that qualify as Common Rules as defined in
this Agreement. Within 30 days of receipt of such updated list, FINRA
shall confirm in writing whether the rules listed in any updated list
are Common Rules as defined in this Agreement. Notwithstanding anything
herein to the contrary, it is explicitly understood that the term
``Regulatory Responsibilities'' does not include, and GIX shall retain
full responsibility for (unless otherwise addressed by separate
agreement or rule) the following (collectively, the ``Retained
Responsibilities''):
(a) surveillance, examination, investigation and enforcement with
respect to trading activities or practices involving GIX's own
marketplace except as otherwise specified in the list of Common Rules
in Exhibit 1;
(b) registration pursuant to its applicable rules of associated
persons (i.e., registration rules that are not Common Rules);
(c) discharge of its duties and obligations as a Designated
Examining Authority pursuant to Rule 17d-1 under the Exchange Act; and
(d) any GIX Rules that are not Common Rules, except for GIX Rules
for any GIX member that operates a facility (as defined in Section
3(a)(2) of the Exchange Act), acts as an outbound router for GIX and is
a member of FINRA (``Router Member'') as provided in paragraph 5.
3. No Charge
There shall be no charge to GIX by FINRA for performing the
Regulatory Responsibilities and Enforcement Responsibilities under this
Agreement except as hereinafter provided. FINRA shall provide GIX with
ninety (90) days advance written notice in the event FINRA decides to
impose any changes to GIX for performing the Regulatory
Responsibilities under this Agreement. If FINRA determines to impose a
charge, GIX shall have the right at the time of imposition of such
charge to terminate this Agreement; provided, however, that FINRA's
Regulatory Responsibilities under this Agreement shall continue until
the Commission approves the termination of this Agreement.
4. Applicability of Certain Laws, Rules, Regulations or Orders
Notwithstanding any provision hereof, this Agreement shall be
subject to any statute, or any rule or order of the Commission. To the
extent such statute, rule or order is inconsistent with this Agreement,
the statute, rule or order shall supersede the provision(s) hereof to
the extent necessary for them to be properly effectuated and the
provision(s) hereof in that respect shall be null and void.
5. Notification of Violations
(a) In the event that FINRA becomes aware of apparent violations of
any GIX Rules, which are not listed as Common Rules, discovered
pursuant to the performance of the Regulatory Responsibilities assumed
hereunder, FINRA shall notify GIX of those apparent violations for such
response as GIX deems appropriate. With respect to apparent violations
of any GIX Rules by any Router Member, FINRA shall not make referrals
to GIX pursuant to this paragraph 5. Such apparent violations shall be
processed by, and enforcement proceedings in respect thereto will be
conducted by, FINRA as provided in this Agreement.
(b) In the event that GIX becomes aware of apparent violations of
any Common Rules, discovered pursuant to the performance of the
Retained Responsibilities, GIX shall notify FINRA of those apparent
violations and such matters shall be handled by FINRA consistent with
the provisions in this Agreement.
(c) Apparent violations of Common Rules shall be processed by, and
enforcement proceedings in respect thereto shall be conducted by FINRA
as provided hereinbefore; provided, however, that in the event a Dual
Member is the subject of an investigation relating to a transaction on
GIX, GIX may in its discretion assume concurrent jurisdiction and
responsibility.
(d) Each party agrees to make available promptly all files, records
and witnesses necessary to assist the other in its investigation or
proceedings.
[[Page 27359]]
6. Continued Assistance
(a) FINRA shall make available to GIX all information obtained by
FINRA in the performance by it of the Regulatory Responsibilities
hereunder with respect to the Dual Members subject to this Agreement.
In particular, and not in limitation of the foregoing, FINRA shall
furnish GIX any information it obtains about Dual Members which
reflects adversely on their financial condition. GIX shall make
available to FINRA any information coming to its attention that
reflects adversely on the financial condition of Dual Members or
indicates possible violations of applicable laws, rules or regulations
by such firms.
(b) The parties agree that documents or information shared shall be
held in confidence, and used only for the purposes of carrying out
their respective regulatory obligations. Neither party shall assert
regulatory or other privileges as against the other with respect to
documents or information that is required to be shared pursuant to this
Agreement.
(c) The sharing of documents or information between the parties
pursuant to this Agreement shall not be deemed a waiver as against
third parties of regulatory or other privileges relating to the
discovery of documents or information.
7. Dual Member Applications
(a) Dual Members subject to this Agreement shall be required to
submit, and FINRA shall be responsible for processing and acting upon
all applications submitted on behalf of partners, officers, registered
personnel and any other person required to be approved by the GIX Rules
and FINRA Rules or associated with Dual Members thereof. Upon request,
FINRA shall advise GIX of any changes of allied members, partners,
officers, registered personnel and other persons required to be
approved by the GIX Rules and FINRA Rules.
(b) Dual Members shall be required to send to FINRA all letters,
termination notices or other material respecting the individuals listed
in paragraph 7(a).
(c) When as a result of processing such submissions FINRA becomes
aware of a statutory disqualification as defined in the Exchange Act
with respect to a Dual Member, FINRA shall determine pursuant to
Sections 15A(g) and/or Section 6(c) of the Exchange Act the
acceptability or continued applicability of the person to whom such
disqualification applies and keep GIX advised of its actions in this
regard for such subsequent proceedings as GIX may initiate.
(d) Notwithstanding the foregoing, FINRA shall not review the
membership application, reports, filings, fingerprint cards, notices,
or other writings filed to determine if such documentation submitted by
a broker or dealer, or an associated person therewith or other persons
required to register or qualify by examination meets the GIX
requirements for general membership or for specified categories of
membership or participation in GIX. FINRA shall not review applications
or other documentation filed to request a change in the rights or
status described in this paragraph 7(d), including termination or
limitation on activities, of a member or a participant of GIX, or a
person associated with, or requesting association with, a member or
participant of GIX.
8. Branch Office Information
FINRA shall also be responsible for processing and, if required,
acting upon all requests for the opening, address changes, and
terminations of branch offices by Dual Members and any other
applications required of Dual Members with respect to the Common Rules
as they may be amended from time to time. Upon request, FINRA shall
advise GIX of the opening, address change and termination of branch and
main offices of Dual Members and the names of such branch office
managers.
9. Customer Complaints
GIX shall forward to FINRA copies of all customer complaints
involving Dual Members received by GIX relating to FINRA's Regulatory
Responsibilities under this Agreement. It shall be FINRA's
responsibility to review and take appropriate action in respect to such
complaints.
10. Advertising
FINRA shall assume responsibility to review the advertising of Dual
Members subject to the Agreement, provided that such material is filed
with FINRA in accordance with FINRA's filing procedures and is
accompanied with any applicable filing fees set forth in FINRA Rules.
11. No Restrictions on Regulatory Action
Notwithstanding anything else herein and to the contrary, except
for paragraph 5(a), nothing contained in this Agreement shall restrict
or in any way encumber the right of either party to conduct its own
independent or concurrent investigation, examination or enforcement
proceeding of or against Dual Members, as either party, in its sole
discretion, shall deem appropriate or necessary.
12. Termination
This Agreement may be terminated by GIX or FINRA at any time upon
the approval of the Commission after one (1) year's written notice to
the other party, except as provided in paragraph 3.
13. Arbitration
In the event of a dispute between the parties as to the operation
of this Agreement, GIX and FINRA hereby agree that any such dispute
shall be settled by arbitration in Washington, DC in accordance with
the rules of the American Arbitration Association then in effect, or
such other procedures as the parties may mutually agree upon. Judgment
on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction. Each party acknowledges that the timely and
complete performance of its obligations pursuant to this Agreement is
critical to the business and operations of the other party. In the
event of a dispute between the parties, the parties shall continue to
perform their respective obligations under this Agreement in good faith
during the resolution of such dispute unless and until this Agreement
is terminated in accordance with its provisions. Nothing in this
paragraph 13 shall interfere with a party's right to terminate this
Agreement as set forth herein.
14. Amendment
This Agreement may be amended in writing duly approved by each
party. All such amendments must be filed with and approved by the
Commission before they become effective.
15. Limitation of Liability
Neither FINRA nor GIX nor any of their respective directors,
governors, officers or employees shall be liable to the other party to
this Agreement for any liability, loss or damage resulting from or
claimed to have resulted from any delays, inaccuracies, errors or
omissions with respect to the provision of Regulatory Responsibilities
as provided hereby or for the failure to provide any such
responsibility, except with respect to such liability, loss or damages
as shall have been suffered by one or the other of FINRA or GIX and
caused by the willful misconduct of the other party or their respective
directors, governors, officers or employees. No warranties, express or
implied, are made by FINRA or GIX with respect to any of the
responsibilities to be performed by them hereunder.
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16. Relief From Responsibility
Pursuant to Sections 17(d)(1)(A) and 19(g) of the Exchange Act and
Rule 17d-2 thereunder, the parties join in requesting the Commission,
upon its approval of this Agreement or any part thereof, to relieve GIX
of any and all responsibilities with respect to matters allocated to
FINRA pursuant to this Agreement; provided, however, that this
Agreement shall not be effective until the Effective Date.
17. Severability
Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms and
provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in
any other jurisdiction.
18. Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and such counterparts together shall
constitute one and the same instrument.
[Remainder of page intentionally left blank.]
* * * * *
Exhibit 1
GIX Certification of Common Rules
GIX hereby certifies that the requirements contained in the rules
listed below for GIX are identical to, or substantially similar to, the
comparable FINRA Rules, Exchange Act provision or Securities Exchange
Act Rule (SEA) rule identified (``Common Rules'').
# Common Rules shall not include any provisions regarding (i)
notice, reporting or any other filings made directly to or from GIX,
(ii) incorporation by reference of GIX Rules that are not Common Rules,
(iii) exercise of discretion in a manner that differs from FINRA's
exercise of discretion including, but not limited to exercise of
exemptive authority, by GIX, (iv) prior written approval of GIX and (v)
payment of fees or fines to GIX.
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FINRA rule, exchange act
GIX rule provision, SEA rule
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Rule 2.140 Prohibited Conditions FINRA Rule 2081 Prohibited
Relating to Expungement of Customer Conditions Relating to
Dispute. Expungement of Customer
Dispute.
Rule 2.150 (b) and (g) Application FINRA Rule 1010(c) and (e)
Procedures for Membership or to become Electronic Requirements for
an Associated Person of a Member #. Uniform Forms; and FINRA By-
Laws, Art. V, Sec 3
Notification by Member to the
Corporation and Associated
Person of Termination;
Amendments to Notification.
Rule 2.154 Continuing Education #...... FINRA Rule 1240 Continuing
Education.
Rule 2.160(q) and (r) Registration FINRA Rule 1010(c) and (e)
Requirements and Restrictions on Electronic Requirements for
Membership. Uniform Forms; and FINRA By-
Laws, Art. V, Sec 3
Notification by Member to the
Corporation and Associated
Person of Termination;
Amendments to Notification.
Rule 2.160(m) Registration Requirements FINRA Rule 1230 Associated
and Restrictions on Membership. Persons Exempt from
Registration.
Rule 2.240 Fidelity Bonds #............ FINRA Rule 4360 Fidelity Bonds.
Rule 3.110 Business Conduct of Members FINRA Rule 2010 Standards of
\**\. Commercial Honor and
Principles of Trade.
Rule 3.120 Violations Prohibited \**\, FINRA Rule 2010 Standards of
#. Commercial Honor and
Principles of Trade.
Rule 3.130 Use of Fraudulent Devices FINRA Rule 2020 Use of
\**\. Manipulative, Deceptive or
Other Fraudulent Devices.
Rule 3.150 Know Your Customer.......... FINRA Rule 2090 Know Your
Customer.
Rule 3.160 Fair Dealing with Customers FINRA Rule 2020 Use of
\*\ \1\. Manipulative, Deceptive or
Other Fraudulent Devices,
FINRA Rule 2010 Standards of
Commercial Honor and
Principles of Trade, FINRA
Rule 2111(a) and SM .06
Suitability, FINRA Rule
2150(a) Improper Use of
Customers' Securities or
Funds; Prohibition Against
Guarantees and Sharing in
Accounts, and FINRA Rule
3240(a) Borrowing From or
Lending to Customers.
Rule 3.170 Suitability................. FINRA Rule 2111 Suitability.
Rule 3.180(a) The Prompt Receipt and FINRA Rule 11860 COD Orders.
Delivery of Securities.
Rule 3.180(b) The Prompt Receipt and SEA Regulation SHO.
Delivery of Securities.
Rule 3.190 Charges for Services FINRA Rule 2122 Charges for
Performed. Services Performed.
Rule 3.200 Use of Information Obtained FINRA Rule 2060 Use of
in Fiduciary Capacity \**\. Information Obtained in
Fiduciary Capacity.
Rule 3.210 Publication of Transactions FINRA Rule 5210 Publication of
and Quotations # \**\. Transactions and Quotations.
Rule 3.220 Offers at Stated Prices \**\ FINRA Rule 5220 Offers at
Stated Prices.
Rule 3.230 Payments Involving FINRA Rule 5230 Payments
Publications that Influence the Market Involving Publications that
Price of a Security. Influence the Market Price of
a Security.
Rule 3.240 Customer Confirmations...... FINRA Rule 2232(a) Customer
Confirmations and SEC Rule 10b-
10 Confirmation of
Transactions.
Rule 3.250 Disclosure of Control FINRA Rule 2262 Disclosure of
Relationship with Issuer. Control Relationship with
Issuer.
Rule 3.260 Discretionary Accounts...... FINRA Rule 3260 Discretionary
Accounts.
Rule 3.270 Improper Use of Customers' FINRA Rule 2150(a)-(c) and SM
Securities or Funds; Prohibition .03 Improper Use of Customers'
Against Guarantees and Sharing in Securities or Funds;
Accounts. Prohibition Against Guarantees
and Sharing in Accounts.
Rule 3.280 Communications with FINRA Rule 2210 Communications
Customers and the Public. with the Public.
Rule 3.290 Customer Disclosures........ FINRA Rule 2265 Extended Hours
Trading Risk Disclosure.
Rule 3.291 Influencing or Rewarding FINRA Rule 3220 Influencing or
Employees of Others; Gratuities. Rewarding Employees of Others.
Rule 3.292 Telemarketing............... FINRA Rule 3230 Telemarketing.
Rule 4.511 General Requirements # \2\.. FINRA Rule 4511 General
Requirements.
Rule 4.512 Customer Account Information FINRA Rule 4512 Customer
Account Information.
Rule 4.513 Record of Written Customer FINRA Rule 4513 Record of
Complaints. Written Customer Complaints.
Rule 4.550 Disclosure of Financial FINRA Rule 2261 Disclosure of
Condition. Financial Condition.
Rule 5.110 Supervision \**,\ \3\....... FINRA Rule 3110 Supervision.
Rule 5.120 Supervisory Control System # FINRA Rule 3120 Supervisory
\**\. Control System.
Rule 5.130 Annual Certification of FINRA Rule 3130 Annual
Compliance and Supervisory Processes #. Certification of Compliance
and Supervisory Processes.
Rule 5.150. Prevention of the Misuse of FINRA Rule 3110 Supervision
Material, Non-Public Information. (b)(1),(d).
Rule 5.160 Anti-Money Laundering FINRA Rule 3310 Anti-Money
Compliance Program #. Laundering Compliance Program.
Rule 5.170 Transactions for or by FINRA Rule 3210 Accounts At
Associated Persons. Other Broker-Dealers and
Financial Institutions.
Rule 6.120 Failure to Deliver and Regulation SHO Rules 200 and
Failure to Receive. 203.
Rule 6.130(a), (b), (d) and (e) FINRA Rule 2251 Processing and
Forwarding of Proxy and Other Issuer- Forwarding of Proxy and Other
Related Materials; Proxy Voting. Issuer-Related Materials.
Rule 10.110 Market Manipulation........ FINRA Rule 6140 Other Trading
Practices.
Rule 10.120 Fictitious Transactions.... FINRA Rule 6140 Other Trading
Practices and FINRA Rule 5210
Supplementary Material .02
Self-Trades.
Rule 10.130 Excessive Sales by a Member FINRA Rule 6140(c) Other
Trading Practices.
[[Page 27361]]
Rule 10.140 Manipulative Transactions.. FINRA Rule 6140 Other Trading
Practices.
Rule 10.150 Dissemination of False FINRA Rule 6140(e) Other
Information. Trading Practices.
Rule 10.160 Prohibition Against Trading FINRA Rule 5320 Prohibition
Ahead of Customer Orders # \**\. Against Trading Ahead of
Customer Orders.
Rule 10.180 Influencing the FINRA Rule 6140(a) Other
Consolidated Tape. Trading Practices and FINRA
Rule 5210 Publication of
Transactions and Quotations.
Rule 10.190 Trade Shredding............ FINRA Rule 5290 Order Entry and
Execution Practices.
Rule 10.220 Best Execution and FINRA Rule 5310 Best Execution
Interpositioning \**\. and Interpositioning.
Rule 10.240 Trading Ahead of Research FINRA Rule 5280 Trading Ahead
Reports. of Research Reports.
Rule 10.260 Front Running of Block FINRA Rule 5270 Front Running
Transactions \**\. of Block Transactions.
Rule 11.151(f) Market Maker Obligations FINRA Rule 6240(a)-(c), (d)(1)
\**\. and (2) Prohibition from
Locking or Crossing Quotations
in NMS Stocks.
Rule 11.281(a)(3) & (4) Limit Up-Limit FINRA Rule 6190(a) and (b)
Down Mechanism. Compliance with Regulation NMS
Plan to Address Extraordinary
Market Volatility.
Rule 11.160 Distributions of Listed FINRA Rule 5190 Notification
Securities Subject to Regulation M. Requirements for Offering
Participants.\-\
Rule 11.310 Locking or Crossing FINRA Rule 6240 Prohibition
Quotations in NMS Stocks \**\. from Locking or Crossing
Quotations in NMS Stocks.
Rule 12.110(c) Arbitration............. FINRA Rule 2268 Requirements
When Using Predispute
Arbitration Agreements for
Customer Accounts.
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\1\ FINRA shall not have Regulatory Responsibilities regarding .01 of
GIX Rule 3.16.
\2\ FINRA shall not have Regulatory Responsibilities regarding
requirements to keep records ``in conformity with . . . Exchange
Rules;'' responsibility for such requirement remains with GIX.
\3\ FINRA Rule 3110.18 permits certain FINRA Members to participate in a
three-year remote inspections pilot program under specified
conditions. FINRA Rule 3110.19 provides an exemption from branch
office registration for members that conduct specified supervisory
activities from a residential location. No such standards currently
exist in the rules of GIX. As a result, FINRA shall not have
Regulatory Responsibilities for GIX 5.110 as it concerns Dual Members
that have elected to participate in the FINRA Rule 3110.18 pilot
program or have availed themselves of the exemption from branch office
registration in FINRA Rule 3110.19.
In addition, the following provisions shall be part of this 17d-2
Agreement:
SEA Rule 200 of Regulation SHO--Definition of Short Sales
and Marking Requirements \**\
SEA Rule 201 of Regulation SHO--Circuit Breaker \**\
SEA Rule 203 of Regulation SHO--Borrowing and Delivery
Requirements \**\
SEA Rule 204 of Regulation SHO--Close-Out Requirement \**\
SEA Rule 101 of Regulation M--Activities by Distribution
Participants \**\
SEA Rule 102 of Regulation M--Activities by Issuers and
Selling Security Holders During a Distribution \**\
SEA Rule 103 of Regulation M--Nasdaq Passive Market Making
\**\
SEA Rule 104 of Regulation M--Stabilizing and Other
Activities in Connection with an Offering \**\
SEA Rule 105 of Regulation M--Short Selling in Connection
With a Public Offering \**\
SEA Rule 604 of Regulation NMS--Display of Customer Limit
Orders \**\
SEA Rule 606 of Regulation NMS--Disclosure of Routing
Information [caret]
SEA Rule 610(d) of Regulation NMS--Locking or Crossing
Quotations \**\
SEA Rule 611 of Regulation NMS--Order Protection Rule
[caret]
SEA Rule 10b-5 Employment of Manipulative and Deceptive
Devices [caret]
SEA Rule 17a-3--Records to Be Made by Certain Exchange
Members, Brokers and Dealers,\-\ and SEA Rule 17a-4--Records to Be
Preserved by Certain Exchange Members, Brokers, and Dealers [caret]
\**\ In addition to performing examinations and Enforcement
Responsibilities as provided in this Agreement for the double star
rules, FINRA shall also perform the surveillance and investigation
responsibilities for the double star rules. These rules may be cited by
FINRA in both the context of this Agreement and the Regulatory Services
Agreement between FINRA and GIX.
\*\ FINRA shall not have any Regulatory Responsibilities for these
rules as they pertain to violations of insider trading activities,
which is covered by a separate 17d-2 Agreement by and among Cboe BZX
Exchange, Inc., Cboe BYX Exchange, Inc., NYSE Chicago, Inc., Cboe EDGA
Exchange Inc., Cboe EDGX Exchange Inc., Financial Industry Regulatory
Authority, Inc., MEMX, LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq
PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York
Stock Exchange, LLC, NYSE American LLC, NYSE Arca Inc., Investors'
Exchange LLC, and the Long-Term Stock Exchange, Inc. as approved by the
SEC on September 23, 2020, as may be amended from time to time.
[supcaret] FINRA shall perform the surveillance and investigation
responsibilities for these rules. The examination responsibility for
these rules is covered by a separate 17d-2 Agreement by and among Cboe
BZX Exchange, Inc., Cboe BYX Exchange, Inc., BOX Exchange LLC, Cboe
Exchange, Inc., Cboe C2 Exchange, Inc., NYSE Chicago, Inc., Cboe EDGA
Exchange, Inc., Cboe EDGX Exchange, Inc., Financial Industry Regulatory
Authority, Inc., MEMX LLC, Nasdaq ISE, LLC, Nasdaq GEMX, LLC, Nasdaq
MRX, LLC, Investors Exchange LLC, Miami International Securities
Exchange, LLC, MIAX PEARL, LLC, MIAX Emerald, LLC, MIAX Sapphire, LLC,
The Nasdaq Stock Market LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, NYSE
National, Inc., New York Stock Exchange LLC, NYSE American LLC, NYSE
Arca, Inc. and Long-Term Stock Exchange, Inc. as approved by the SEC on
August 1, 2024 concerning covered Regulation NMS and Consolidated Audit
Trail Rules, as may be amended from time to time.
III. Date of Effectiveness of the Proposed Plan and Timing for
Commission Action
Pursuant to Section 17(d)(1) of the Act \14\ and Rule 17d-2
thereunder,\15\ after July 17, 2025, the Commission may, by written
notice, declare the plan submitted by GIX and FINRA, File No. 4-858, to
be effective if the Commission finds that the plan is necessary or
appropriate in the public interest and for the protection of investors,
to foster cooperation and coordination among self-regulatory
organizations, or to remove impediments to and foster the development
of the national market system and a national system for the clearance
and settlement of securities transactions and in conformity with the
factors set forth in Section 17(d) of the Act.
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\14\ 15 U.S.C. 78q(d)(1).
\15\ 17 CFR 240.17d-2.
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IV. Solicitation of Comments
In order to assist the Commission in determining whether to approve
the proposed 17d-2 Plan and to relieve GIX of the responsibilities
which would be assigned to FINRA, interested persons are invited to
submit written data, views, and arguments concerning the
[[Page 27362]]
foregoing. Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/other.shtml); or
Send an email to [email protected]. Please include
File Number 4-858 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, Station Place, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number 4-858. This file number
should be included on the subject line if email is used. To help the
Commission process and review your comments more efficiently, please
use only one method. The Commission will post all comments on the
Commission's internet website (https://www.sec.gov/rules/other.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the plan also will be available for inspection and
copying at the principal offices of GIX and FINRA. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to File Number 4-858 and should be submitted on or before
July 17, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(34).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-11733 Filed 6-25-25; 8:45 am]
BILLING CODE 8011-01-P