Notice2021-25350
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend FINRA Fees
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 22, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 222 (Monday, November 22, 2021)</title>
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[Federal Register Volume 86, Number 222 (Monday, November 22, 2021)]
[Notices]
[Pages 66356-66358]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-25350]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93583; File No. SR-GEMX-2021-10]
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend FINRA Fees
November 16, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\, and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 5, 2021, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'')
filed with the Securities and Exchange Commission (the ``Commission'')
the proposed rule change as described in Items I, II, and III below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend GEMX's Pricing Schedule at Options
7, Section 5, Legal and Regulatory, to reflect adjustments to FINRA
Registration Fees. Additionally, this rule change amends the Continuing
Education Fees.
While the changes proposed herein are effective upon filing, the
Exchange has designated the amendments become operative on January 2,
2022.\3\
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\3\ See Securities Exchange Act Release No. 90176 (October 14,
2020), 85 FR 66592 (October 20, 2020) (SR-FINRA-2020-032) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Adjust FINRA Fees To Provide Sustainable Funding for FINRA's
Regulatory Mission).
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The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/gemx/rules">https://listingcenter.nasdaq.com/rulebook/gemx/rules</a>, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of
[[Page 66357]]
the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
This proposal amends GEMX's Pricing Schedule at Options 7, Section
5, Legal and Regulatory, to reflect adjustments to FINRA Registration
Fees.\4\ Additionally, this rule change amends the Continuing Education
Fees. The FINRA fees are collected and retained by FINRA via Web CRD
for the registration of employees of GEMX members that are not FINRA
members (``Non-FINRA members''). The Exchange is merely listing these
fees on its Pricing Schedule. The Exchange does not collect or retain
these fees.
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\4\ FINRA operates Web CRD, the central licensing and
registration system for the U.S. securities industry. FINRA uses Web
CRD to maintain the qualification, employment and disciplinary
histories of registered associated persons of broker-dealers.
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Today, GEMX Options 7, Section 5B, provides a list of FINRA Web CRD
Fees, Fingerprint Processing Fees, and Continuing Education Fees. The
Exchange proposes to amend the introductory paragraph to add a sentence
to make clear that FINRA collects the fees listed within Options 7,
Section 5B on behalf of the Exchange. The fees listed within Options 7,
Section 5B reflect fees set by FINRA.
Specifically, with respect to the General Registration Fees, the
Exchange proposes to increase the $100 fee to $125 for each initial
Form U4 filed for the registration of a representative or principal.
This amendment is made in accordance with a recent FINRA rule change to
adjust to its fees.\5\
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\5\ Id. FINRA noted in its rule change that it was adjusting its
fees to provide sustainable funding for FINRA's regulatory mission.
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The Exchange also proposes to amend the Continuing Education Fees
to update those fees to reflect current fees assessed by FINRA. The
Exchange proposes to provide an introductory paragraph which states,
``The Continuing Education Fee will be assessed as to each individual
who is required to complete the Regulatory Element of the Continuing
Education Requirements pursuant to Exchange General 4, Section 1240.
This fee is paid directly to FINRA.'' Additionally, the Exchange
proposes to replace the current rule text \6\ with the following rule
text, ``$100.00 ($55.00 if the Continuing Education is Web-based) for
each individual who is required to complete the S101 or S201.'' This
proposed rule text reflects a rule change previously made by FINRA \7\
which discontinued the S501 Regulatory Element. Since the time the S501
fee was discontinued, FINRA has been collecting the appropriate
registration fees for the S101 and S201 registrations. This amendment
will make clear the current Continuing Education Fees that FINRA
assesses today.
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\6\ The current rule text provides, ``$60-S501. Assessed to each
individual who is solely registered as a Proprietary Trader required
to complete the Regulatory Element of the Continuing Education
Requirements pursuant to Nasdaq GEMX Rule 1240.''
\7\ See Securities Exchange Act Release No. 75581 (July 31,
2015), 80 FR 47018 (August 6, 2015) (SR-FINRA-2015-015) (Order
Approving a Proposed Rule Change to Provide a Web-based Delivery
Method for Completing the Regulatory Element of the Continuing
Education Requirements).
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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. Accordingly, the proposed fees mirror those currently
assessed by FINRA.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\9\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility, and is
not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes it is reasonable to increase the $100 fee for
each initial Form U4 filed for the registration of a representative or
principal to $125 in accordance with an adjustment to FINRA's fees.\10\
The Exchange's rule text will reflect the current registration rate
that will be assessed by FINRA as of January 2, 2022. Additionally,
making clear that FINRA, on behalf of the Exchange, will bill and
collect these fees will bring greater transparency to its fees. Also,
amending the Continuing Education Fees to properly reflect the current
fee of $100.00 for each individual who is required to complete the S101
or S201 and $55.00 if the Continuing Education is Web-based will bring
greater transparency to the Continuing Education fees currently
assessed by FINRA. Finally, referencing the rule which governs the
Regulatory Element of the Continuing Education Requirements and, noting
that the fee is paid directly to FINRA, will provide more information
to Members regarding the fees for Continuing Education. The proposed
fees are identical to those adopted by FINRA for use of Web CRD for
disclosure and the registration of FINRA members and their associated
persons. These costs are borne by FINRA when a Non-FINRA member uses
Web CRD.
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\10\ See note 3 above.
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The Exchange believes that its proposal to increase the $100 fee
for each initial Form U4 filed for the registration of a representative
or principal to $125 is equitable and not unfairly discriminatory as
the amendment will reflect the current fee that will be assessed by
FINRA to all Members who require Form U4 filings as of January 2, 2022.
Additionally, reflecting the current Continuing Education Fees for the
S101 or S201 and removing outdated language is equitable and not
unfairly discriminatory as FINRA currently assesses these rates to all
Members that are required to have those registrations. Finally, making
clear that FINRA, on behalf of the Exchange, will bill and collect
these fees and referencing the rule which governs the Regulatory
Element of the Continuing Education Requirements will bring greater
transparency to FINRA's fees. Further, the proposal is also equitable
and not unfairly discriminatory because the Exchange will not be
collecting or retaining these fees, therefore, the Exchange will not be
in a position to apply them in an inequitable or unfairly
discriminatory manner.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
that this proposal creates an unnecessary or inappropriate inter-market
burden on competition as FINRA's fees apply to all market participants.
Additionally, the Exchange does not believe that this proposal creates
an unnecessary or inappropriate intra-market burden on competition as
the increased fee for each initial Form U4 filed for the registration
of a representative or principal will be assessed by FINRA to all
Members who require Form U4 filings as of January 2, 2022. Also,
reflecting the current Continuing Education Fees for the S101 or S201
and removing outdated language does not impose an undue burden on
competition as FINRA currently assesses these rates to all Members that
[[Page 66358]]
are required to have those registrations. Finally, making clear that
FINRA, on behalf of the Exchange, will bill and collect these fees and
referencing the rule which governs the Regulatory Element of the
Continuing Education Requirements will bring greater transparency to
FINRA's fees. Further, the proposal does not impose an undue burden on
competition because the Exchange will not be collecting or retaining
these fees, therefore, the Exchange will not be in a position to apply
them in an inequitable or unfairly discriminatory manner.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\11\
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#d3a1a6bfb6feb0bcbebeb6bda7a093a0b6b0fdb4bca5"><span class="__cf_email__" data-cfemail="a9dbdcc5cc84cac6c4c4ccc7dddae9daccca87cec6df">[email protected]</span></a>. Please include
File Number SR-GEMX-2021-10 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-GEMX-2021-10. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-GEMX-2021-10, and should be submitted on
or before December 13, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25350 Filed 11-19-21; 8:45 am]
BILLING CODE 8011-01-P
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