SEC to hold an OPEN Meeting Wednesday, August 23, 2023 at 10:00 a.m. They appear to be considering eliminating conditions under which broker-dealers can bypass the requirement to join a national security association

r/Superstonk - SEC Alert! SEC to hold an OPEN Meeting Wednesday, August 23, 2023 at 10:00 a.m. They appear to be considering eliminating conditions under which broker-dealers can bypass the requirement to join a national security association (like FINRA) if they make trades outside where they're … — https://public-inspection.federalregister.gov/2023-17996.pdf

Wut mean?:

SEC is thinking about reducing or eliminating certain conditions under which broker-dealers can bypass the requirement to join a national securities association (like FINRA) if they make securities trades outside of the specific exchanges where they are registered members.

They are also going to consider introducing new regulations and making changes to existing rules related to the Investment Advisers Act of 1940--specifically targeting advisors of private investment funds.

Also, they will consider updating the rules that dictate compliance requirements under the Advisers Act
If adopted, broker-dealers could have fewer exemptions available and might need to join a national securities association even if they conduct off-exchange transactions.

Why might a broker-dealer prefer not to join a national securities association (like FINRA)?:

Regulatory Oversight: Membership entails compliance with a host of rules and regulations that are imposed by the association.
Operational Restrictions: National securities associations probably have rules that restrict or dictate certain business practices or operational procedures.
Examinations and Audits: Being a member often means being subjected to routine examinations and audits...

TLDRS:

SEC to hold an OPEN Meeting Wednesday, August 23, 2023 at 10:00 a.m.
They appear to be considering eliminating conditions under which broker-dealers can bypass the requirement to join a national security association (like FINRA) if they make trades outside where they're registered.
They are also going to consider introducing new regulations and making changes to existing rules related to the Investment Advisers Act of 1940--specifically targeting advisors of private investment funds.
Also, they will consider updating the rules that dictate compliance requirements under the Advisers Act
If adopted, broker-dealers could have fewer exemptions available and might need to join a national securities association even if they conduct off-exchange transactions.
This is likely a good thing if exemptions limited/removed.