The New York Stock Exchange LLC (“NYSE”) proposes to amend Rule 2 to remove the FINRA or other national securities exchange membership requirement for member organizations. Rule 2 was previously amended in 2007 to require FINRA membership as part of the transition plan for the consolidation of NYSE Regulation, Inc. and the National Association of Securities Dealers (“NASD”). During this transition period, FINRA provided regulatory surveillance and enforcement services to NYSE, including with respect to NYSE rules, while the harmonization of NYSE and NASD rules was completed. The proposed rule change reflects the end of the transition period and related regulatory outsourcing as NYSE resumed direct performance of certain previously outsourced regulatory functions on January 1, 2016. Going forward, common members will continue to be regulated pursuant to the current allocation plan between FINRA and NYSE, and FINRA will continue to perform certain regulatory services under the oversight of NYSE’s regulatory unit pursuant to the existing Regulatory Services Agreement. The full notice may be found here and the full text of the proposed revisions may be found here.
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