Nasdaq BX, Inc., a self-regulatory organization operating as an exchange, filed a proposed rule change with the Securities and Exchange Commission on December 31, 2025, to amend its Pricing Schedule under Equity 7, Section 30. The amendments adjust fees related to the Financial Industry Regulatory Authority's registration and continuing education requirements, specifically for BX members that are not FINRA members. Published in the Federal Register on January 20, 2026, this notice solicits public comments and takes immediate effect, with the changes becoming operative on January 1, 2026. The proposal mirrors fee adjustments recently adopted by FINRA, aiming to maintain parity in costs for using the Web Central Registration Depository system and fulfilling continuing education obligations. This development underscores ongoing efforts to standardize regulatory fees across the securities industry, potentially affecting broker-dealers registered with BX.
Background and Purpose of the Rule Change
Nasdaq BX operates as a national securities exchange and is required under the Securities Exchange Act of 1934 to regulate its members and ensure compliance with federal securities laws. The exchange's Pricing Schedule outlines various fees, including those collected on behalf of FINRA for services like registration and continuing education. FINRA manages the Web CRD system, which handles the qualification, employment, and disciplinary histories of registered persons in the securities industry. BX members who are not FINRA members still rely on this system, and BX passes through the associated fees without retaining them.
The proposed changes stem from FINRA's own rule filing, SR-FINRA-2024-019, which adjusted fees for the CRD system and continuing education to support sustainable funding for its regulatory mission. As noted in the Federal Register notice, BX's amendments apply to members trading equity and options products, since all BX Options Participants must be BX members. The exchange seeks to align its fees with FINRA's to avoid discrepancies, ensuring that non-FINRA members pay the same rates as FINRA members for identical services.
Key Components of the Proposed Amendments
The rule change targets two main areas in Equity 7, Section 30: the FINRA Annual System Processing Fee and the Continuing Education Regulatory Element Session Fee.
For the Annual System Processing Fee, BX proposes replacing the flat $70 fee with a tiered structure based on the number of securities regulators with which a registered person is registered, excluding investment adviser representatives. The new tiers are: $70 for 1-5 regulators, $95 for 6-20, $110 for 21-40, and $125 for 41 or more. This adjustment directly reflects FINRA's updates under Section 4(b)(7) of its By-Laws, as detailed in SR-FINRA-2024-019. FINRA justified these changes by linking fees more closely to regulatory costs, such as system maintenance and oversight.
Additionally, BX plans to increase the Continuing Education Regulatory Element Session Fee from $18 to $25 per individual required to complete the Regulatory Element under Exchange General 4, Section 1240. This fee supports mandatory training to keep registered persons updated on rules and ethical standards. The notice also includes a proposal to remove outdated rule text referencing pre-2023 fees, streamlining the Pricing Schedule for clarity.
These fees are user-based, with no distinction between FINRA and non-FINRA members in terms of costs incurred by FINRA. As BX states in its filing, 'The FINRA Web CRD Fees are user-based and there is no distinction in the cost incurred by FINRA if the user is a FINRA member or a Non-FINRA member.'
Statutory Basis and SEC Oversight
The proposal invokes Section 19(b)(3)(A)(ii) of the Securities Exchange Act, allowing immediate effectiveness upon filing as it pertains to fees. BX argues the changes are consistent with Section 6(b) of the Act, promoting equitable allocation of reasonable fees and preventing unfair discrimination. Specifically, Sections 6(b)(4) and 6(b)(5) are cited to emphasize that the fees apply uniformly to all members using the CRD system and continuing education programs.
The SEC's role includes publishing the notice for public comment, with a 60-day window to potentially suspend the rule if it deems necessary for public interest or investor protection. This process reflects established precedents, such as prior fee adjustments by exchanges like NYSE and Cboe, which have similarly mirrored FINRA changes without significant opposition. For instance, in 2024, FINRA's fee hike was approved after demonstrating a need for funding to enhance system capabilities amid growing regulatory demands.
Perspectives and Implications
Stakeholders in the securities industry offer varied views on such fee adjustments. Broker-dealers and registered representatives may see the tiered structure as a fairer approach, tying costs to the complexity of multi-jurisdictional registrations. As FINRA noted in its filing, this correlates fees with components driving regulatory expenses, potentially easing burdens on smaller firms with fewer registrations.
Conversely, some industry groups, like the Securities Industry and Financial Markets Association, have historically critiqued fee increases for adding to operational costs without proportional benefits. Larger firms with extensive registrations could face higher fees under the new tiers, prompting concerns about competitiveness. Regulators, including the SEC, emphasize the need for sustainable funding to maintain robust oversight, especially as cyber threats and market complexities evolve.
Short-term implications include administrative updates for BX members, who must adjust compliance processes by January 1, 2026. Long-term, the changes could influence how exchanges structure pass-through fees, setting a model for consistency across SROs. They also highlight broader political forces, such as congressional oversight of SEC budgeting and calls for regulatory efficiency.
In summary, Nasdaq BX's proposed rule change aligns its fees with FINRA's adjustments, ensuring equitable treatment for non-FINRA members. This development maintains the integrity of registration and education systems critical to market oversight.
