SEC Approves Amended Plan for Regulatory Responsibilities

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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

A Notice by the Securities and Exchange Commission on 03/25/2026

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• Document Details Published Content - Document Details Agency Securities and Exchange Commission Agency/Docket Numbers Release No. 34-105055 File No. 4-762 Document Citation 91 FR 14609 Document Number 2026-05757 Document Type Notice Pages 14609-14610
  (2 pages) Publication Date 03/25/2026 Published Content - Document Details

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• Document Details Published Content - Document Details Agency Securities and Exchange Commission Agency/Docket Numbers Release No. 34-105055 File No. 4-762 Document Citation 91 FR 14609 Document Number 2026-05757 Document Type Notice Pages 14609-14610
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| File No. 4-762
(5 Documents) | | | |
| --- | | | |
| Date | | Action | Title |
| | 2026-03-25 | | 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 |
| | 2026-02-26 | | Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing of Proposed Amended Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc., MEMX LLC, and MX2 LLC |
| | 2022-10-24 | | Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amended Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and MEMX LLC |
| | 2020-06-23 | | Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Order Approving and Declaring Effective a Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and MEMX LLC |
| | 2020-05-27 | | 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 MEMX LLC |

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Securities and Exchange Commission

1. [Release No. 34-105055; File No. 4-762] March 20, 2026. On February 3, 2026, the Financial Industry Regulatory Authority, Inc. (“FINRA”), MEMX LLC (“MEMX”), and MX2 LLC (“MX2”) (together, the “Parties”) filed with the Securities and Exchange Commission (“Commission” or “SEC”) a plan for the allocation of regulatory responsibilities, dated January 20, 2026 (“17d-2 Plan” or the “Plan”). The Plan was published for comment on February 26, 2026. [1 ] The Commission received no comments on the Plan. This order approves and declares effective the Plan.

I. Introduction

Section 19(g)(1) of the Securities Exchange Act of 1934 (“Act”), [2 ] 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. [3 ] 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.

Section 17(d)(1) of the Act [4 ] was intended, in part, to eliminate unnecessary multiple examinations and regulatory duplication. [5 ] With respect to a common member, Section 17(d)(1) authorizes the Commission, by rule or 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.

To implement Section 17(d)(1), the Commission adopted two rules: Rule 17d-1 and Rule 17d-2 under the Act. [6 ] 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. [7 ] 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.

To address regulatory duplication in these and other areas, the Commission adopted Rule 17d-2 under the Act. [8 ] 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.

II. Proposed Amended Plan

On June 17, 2020, the Commission declared effective the Plan entered into between FINRA and MEMX for allocating regulatory responsibility pursuant to Rule 17d-2. [9 ] The Plan is intended to reduce regulatory duplication for firms that are common members of FINRA and MEMX by allocating regulatory responsibility with respect to certain applicable laws, rules, and regulations that are common among them. Included in the Plan is an exhibit that lists every MEMX rule for which FINRA bears responsibility under the Plan for overseeing and enforcing with respect to MEMX members that are also members of FINRA and the associated persons therewith (“Certification”). On October 6, 2022, the parties submitted an amendment to the Plan to add Securities Exchange Act Rule 14e-4(a)(1)(ii)(D) to the Certification and to reflect updated rule citations. [10 ] On February 3, 2026, the parties submitted a proposed amendment to the Plan (“Amended Plan”). The primary purpose of the Amended Plan is to add MX2 as a Participant to the Plan, to ( printed page 14610) amend the procedures regarding statutory disqualifications, and to specify the notice that FINRA would be required to give if it proposed to charge MEMX and MX2 for performing the Regulatory Responsibilities under the Agreement.

III. Discussion

The Commission finds that the proposed Amended Plan is consistent with the factors set forth in Section 17(d) of the Act [11 ] and Rule 17d-2(c) thereunder [12 ] in that the proposed Amended Plan is necessary or appropriate in the public interest and for the protection of investors, fosters cooperation and coordination among SROs, and removes impediments to and fosters the development of the national market system. In particular, the Commission believes that the proposed Amended Plan should reduce unnecessary regulatory duplication by allocating to FINRA certain examination and enforcement responsibilities for common members that would otherwise be performed by MEMX, MX2, and FINRA. Accordingly, the proposed Amended Plan promotes efficiency by reducing costs to common members. Furthermore, because MEMX, MX2, and FINRA will coordinate their regulatory functions in accordance with the Amended Plan, the proposed Amended Plan should promote investor protection.

The Commission notes that, under the proposed Amended Plan, MEMX, MX2, and FINRA have allocated regulatory responsibility for those MEMX and MX2 rules, set forth in the Certification, that are substantially similar to the applicable FINRA rules in that examination for compliance with such provisions and rules would not require FINRA to develop one or more new examination standards, modules, procedures, or criteria in order to analyze the application of the rule, or a common member's activity, conduct, or output in relation to such rule. In addition, under the proposed Amended Plan, FINRA would assume regulatory responsibility for certain provisions of the federal securities laws and the rules and regulations thereunder that are set forth in the Certification. The Common Rules covered by the proposed Amended Plan are specifically listed in the Certification, as may be amended by the Parties from time to time.

According to the proposed Amended Plan, MEMX and MX2 will review the Certification, at least annually, or more frequently if required by changes in either the rules of MEMX, MX2, or FINRA, and, if necessary, submit to FINRA an updated list of Common Rules to add MEMX and MX2 rules not included on the then-current list of Common Rules that are substantially similar to FINRA rules; delete MEMX and MX2 rules included in the then-current list of Common Rules that are no longer substantially similar to FINRA rules; and confirm that the remaining rules on the list of Common Rules continue to be MEMX and MX2 rules that are substantially similar to FINRA rules. [13 ] FINRA will then confirm in writing whether the rules listed in any updated list are Common Rules as defined in the Amended Plan. The proposed Amended Plan also clarifies the procedures regarding statutory disqualifications with respect to Common Members and requires FINRA to give adequate notice to MEMX and MX2 in the event FINRA decides to impose any charges to MEMX and MX2 for performing the Regulatory Responsibilities under the proposed Amended Plan. The Commission believes that these provisions are designed to provide for continuing communication between the Parties to ensure the continued accuracy of the scope of the proposed allocation of regulatory responsibility.

The Commission is hereby declaring effective an Amended Plan that, among other things, allocates regulatory responsibility to FINRA for the oversight and enforcement of all MEMX and MX2 rules that are substantially similar to the rules of FINRA for common members of MEMX and FINRA, and MX2 and FINRA. Therefore, modifications to the Certification need not be filed with the Commission as an amendment to the Amended Plan, provided that the Parties are only adding to, deleting from, or confirming changes to MEMX or MX2 rules in the Certification in conformance with the definition of Common Rules provided in the proposed Amended Plan. However, should the Parties decide to add a MEMX or MX2 rule to the Certification that is not substantially similar to a FINRA rule; delete a MEMX or MX2 rule from the Certification that is substantially similar to a FINRA rule; or leave on the Certification a MEMX or MX2 rule that is no longer substantially similar to a FINRA rule, then such a change would constitute an amendment to the Amended Plan, which must be filed with the Commission pursuant to Rule 17d-2 under the Act. [14 ]

IV. Conclusion

This Order gives effect to the Amended Plan filed with the Commission in File No. 4-762. The Parties shall notify all members affected by the Plan of their rights and obligations under the Plan.

It is therefore ordered, pursuant to Section 17(d) of the Act, that the Plan in File No. 4-762, between FINRA, MEMX, and MX2, filed pursuant to Rule 17d-2 under the Act, is approved and declared effective.

It is further ordered that MEMX and MX2 are relieved of those responsibilities allocated to FINRA under the Plan in File No. 4-762.

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. [15 ]

J. Matthew DeLesDernier,

Deputy Secretary.

Footnotes

1.

                     
                    See 
                     Securities Exchange Act Release No. 104883 (February 24, 2026), [91 FR 9663](https://www.federalregister.gov/citation/91-FR-9663).

Back to Citation 2. 15 U.S.C. 78s(g)(1).

Back to Citation 3. 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.

Back to Citation 4. 15 U.S.C. 78q(d)(1).

Back to Citation 5.

                     
                    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).

Back to Citation 6. 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.

Back to Citation 7.

                     
                    See 
                     Securities Exchange Act Release No. 12352 (April 20, 1976), [41 FR 18808](https://www.federalregister.gov/citation/41-FR-18808) (May 7, 1976).

Back to Citation 8.

                     
                    See 
                     Securities Exchange Act Release No. 12935 (October 28, 1976), [41 FR 49091](https://www.federalregister.gov/citation/41-FR-49091) (November 8, 1976).

Back to Citation 9.

                     
                    See 
                     Securities Exchange Act Release No. 89084 (June 17, 2020), [85 FR 37701](https://www.federalregister.gov/citation/85-FR-37701) (June 23, 2020).

Back to Citation 10.

                     
                    See 
                     Securities Exchange Act Release No. 96101 (October 18, 2022), [87 FR 64280](https://www.federalregister.gov/citation/87-FR-64280) (October 24, 2022).

Back to Citation 11. 15 U.S.C. 78q(d).

Back to Citation 12. 17 CFR 240.17d-2(c).

Back to Citation 13.

                     
                    See 
                     paragraph 2 of the Amended Plan.

Back to Citation 14.

                     The Commission also notes that the addition to or deletion from the Certification of any federal securities laws, rules, and regulations for which FINRA would bear responsibility under the Plan for examining, and enforcing compliance by, common members, also would constitute an amendment to the Plan.

Back to Citation 15. 17 CFR 200.30-3(a)(34).

Back to Citation [FR Doc. 2026-05757 Filed 3-24-26; 8:45 am]

BILLING CODE 8011-01-P

Published Document: 2026-05757 (91 FR 14609)