Plan by FINRA and CHX to Re-Allocate Regulatory Tasks Approved by SEC

The Securities and Exchange Commission has approved the Financial Industry Regulatory Authority and Chicago Stock Exchange Inc. proposed agreement to re-allocate certain regulatory duties that deal with firms that belong to the two self-regulatory organizations.

Under the plan, FINRA is to assume specific enforcement and examination functions for common members when the applicable CHX rules and FINRA rules involved are “substantially similar.” Also, with respect to certain federal securities laws and rules and regulations and as specified by the agreement, FINRA is to take regulatory responsibility for common members.

The SEC says the plan will cut down “unnecessary regulatory duplication” when common members are involved. While FINRA will take charge of certain responsibilities that the two SROs would otherwise have both performed, CHX will remain in charge of examination, surveillance, investigation, and enforcement when it comes to trading practices and activities in its marketplace. The latest agreement supercedes the one from 1977. It has no impact on CHX’s operations or its market oversight functions.

However, according to Securities Fraud Attorney William Shepherd, “Considering the abysmal job that these self-regulatory organizations (SRO’S) have done in regulating, for example, the lack of regulation of the Madoff securities firm, perhaps a little duplication would be perfectly acceptable!”

Related Web Resources:
SEC Approves Plan by FINRA, CHX To Re-Allocate Certain Regulatory Duties, BNA Securities Law Daily, September 13, 2010

Chicago Stock Exchange


Unfortunately, there are broker-dealers that commit securities fraud, which usually results in financial losses for investors. Our investment fraud law firm is here to help our clients recoup their losses.