SEC Form 19b-4

What Is SEC Form 19b-4?

SEC Form 19b-4 is a form that is utilized to inform the Securities and Exchange Commission (SEC) of a proposed rule change by a self-regulatory organization (SRO) compliant with Rule 19b-4 under the Securities Exchange Act of 1934.

A SRO is a non-governmental body that exercises some degree of regulatory authority over an industry or calling. Instances of SROs in the financial industry would incorporate stock exchanges, for example, the New York Stock Exchange (NYSE) or Nasdaq, registered clearing agencies, for example, the Depository Trust and Clearing Corporation (DTCC), and the Municipal Securities Rulemaking Board.

How SEC Form 19b-4 Works

Self-regulatory organizations (SROs) are required to file SEC Form 19b-4 with the SEC before rolling out any improvements to its rules, explicitly concerning trading rules. In the filing, the SRO must legitimize the new rules to SEC staff, clarifying that the rule change supports fair trading markets, and gives investor protections and essential oversight procedures.

All 19b-4 filings are made accessible on the SEC's Electronic Document Gathering, Analysis and Retrieval (EDGAR) system. When the form is authoritatively filed, the SEC survey and endorsement or denial can require 90 days. The SEC staff will dismiss 19b-4 filings assuming that any of the required information is excluded from the last filing.

The SEC likewise welcomes the public to give their opinion. A public comment period follows each 19b-4 filing by which different exchanges and the public can voice support or resistance to the proposed rule change. During this time, intrigued people are welcome to submit recorded as a hard copy their perspectives and contentions, including whether the rule being proposed is steady with the Securities Exchange Act of 1934.

The SEC posts all comments concerning rule changes proposed in SEC Form 19b-4 on its website.

Special Considerations

Figuring out Self-Regulatory Organizations (SROs)

In spite of the fact that SROs are private organizations, they are as yet subject to government-forced regulation to a degree. The government assigns a parts of the industry oversight to SROs. Any applicable laws or governmental regulations will apply and be primary while those set by the SRO become supplemental.

Since the SRO has some regulatory influence over an industry or calling, it can frequently act as a guard dog to prepare for fraud or amateurish practices. The ability of a SRO to exercise regulatory authority, in any case, doesn't stem from a grant of power from the government.

All things considered, SROs frequently achieve control through internal instruments that direct the flow of business operations. The authority may likewise come from an outer agreement between like businesses. The purpose of these organizations is to oversee from inside while keeping away from connections to a nation's governance.

Instances of Self-Regulatory Organizations (SROs)

A few instances of SROs that would probably file a Form 19b-4 include:

• The New York Stock Exchange (NYSE)
• The Financial Planning Association (FPA)
• The Chicago Board of Trade (CBOT)
• The American Council of Life Insurers (ACLI)
• The Financial Industry Regulatory Authority (FINRA)
• The Fixed Income Clearing Corporation (FICC)
• The Options Clearing Corporation (OCC)
• The American Institute of Certified Public Accounts (AICPA)

Features

• Many stock exchanges and financial regulatory bodies are SROs, thus their bylaws, rules, and regulations must be filed with the SEC for public recordkeeping.
• SEC Form 19b-4 is utilized by covered self-regulatory organizations (SROs) to record a rule change with the SEC.
• This form, including significant exhibits, is planned to inspire information vital for the public to give significant comment on the proposed rule change.