SEC staff seek comment on exchanges that own affiliated broker-dealers

Staff in the US Securities and Exchange Commission’s Division of Trading and Markets published a statement on 30 September 2026 inviting public comment on national securities exchanges that are affiliated with broker-dealers active on those same exchanges.

Why now

The staff say the statement responds to changing market conditions and growing market interest in listing novel products. The SEC recently received four Form 1-N filings from firms seeking notice registration as security futures product exchanges under Section 6(g) of the Exchange Act. The statement’s footnotes name them as Coinbase Derivatives, KalshiEX, Bitnomial Exchange and North American Derivatives Exchange.

According to the statement, each of the four discloses an affiliation with a futures commission merchant that will act as an introducing broker, extend margin to customers, hold client funds and property, and be a member of the exchange for trading security futures. None disclosed an affiliate that will trade security futures as principal. Some have also filed proposed rule changes to set margin and listing standards for products they plan to list.

The conflict the SEC has flagged before

The statement recalls earlier Commission positions on exchange-broker affiliations. The Commission has said an exchange’s financial interests may conflict with its job as a self-regulatory organisation overseeing an affiliated broker, for example if it gave that affiliate better access to information, faster execution or enhanced operational capabilities not offered to other members. It has also questioned whether an affiliated introducing broker should be treated as a facility of the exchange.

The staff point to a recent Commodity Futures Trading Commission proposal on affiliations among CFTC-regulated entities, which would add disclosure requirements and conflict-of-interest rules for designated contract markets with affiliated futures commission merchants and principal trading firms.

What it means for traders

The question is how an exchange that also owns the broker giving customers access, margin and custody should be structured and supervised. The statement is the view of SEC staff only. It is not a rule or Commission guidance and has no legal force.

What happens next

The staff invite comment on exchange affiliations, including with firms that act for customers on the exchange or trade there as principal. Submissions should refer to File Number 4-936 and will be posted on the SEC’s website. The statement gives no closing date.