Notice2021-25353
Self-Regulatory Organizations; Nasdaq BX, Inc.; 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 66375-66377]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-25353]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93587; File No. SR-BX-2021-052]
Self-Regulatory Organizations; Nasdaq BX, Inc.; 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 8, 2021, Nasdaq BX, Inc. (``BX'' or ``Exchange'')
filed with the Securities and Exchange Commission (the ``Commission'')
the proposed rule change as described in Items I and II 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 BX's Pricing Schedule at Equity 7,
Section 30, Regulatory, Registration and Processing Fees, to reflect
adjustments to FINRA Registration Fees, Fingerprinting Fees, and
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/bx/rules">https://listingcenter.nasdaq.com/rulebook/bx/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 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 BX's Pricing Schedule at Equity 7, Section 30,
Regulatory, Registration and Processing Fees, to reflect adjustments to
FINRA Registration Fees, Fingerprinting Fees, and Continuing Education
Fees.\4\ The FINRA fees are collected and retained by FINRA via Web CRD
for the registration of employees of BX 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, BX Equity 7, Section 30, provides a list of FINRA Fees. The
Exchange proposes to amend the introductory paragraph to: (1) Indicate
``CRD'' is the ``Central Registration Depository'' or ``CRD''; (2) add
a sentence to make clear that FINRA collects the fees listed within
Equity 7, Section 30 on behalf of the Exchange; (3) add the title
``General Registration Fees:''; and (4) remove the numbering from (1)
to (3).
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\ The Exchange also proposes to amend the
description of the $45 registration fee from ``annually for each of the
member's registered representatives and principals for system
processing'' to ``FINRA Annual System Processing Fee Assessed only
during Renewals.'' The proposed new title is more precise.
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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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With respect to the fingerprint processing fees, the Exchange notes
that the current fees do not reflect the fees assessed by FINRA today.
The Exchange proposes to amend the current fees to reflect the current
fees that are assessed by FINRA. The proposed new rule text, with the
title, ``Fingerprint Processing Fees:'' added, would provide,
Fingerprint Processing Fees:
$29.50--Initial Submission (Electronic)
$44.50--Initial Submission (Paper)
$15.00--Second Submission (Electronic)
$30.00--Second Submission (Paper)
$29.50--Third Submission (Electronic)
$44.50--Third Submission (Paper)
$30.00-FINRA Processing Fee for Fingerprint Results Submitted by
Self-Regulatory Organizations other than FINRA.
In 2012, FINRA only offered one set of fees ($27.50 for the initial
submission, $13.00 for the second submission, and $27.50 for the third
submission). In 2013, FINRA amended its fingerprint fees and offered
two sets of fees. For fingerprints submitted on paper card, the fees
are $44.50 per initial submission, $30.00 per second submission, and
$44.50 per third submission. For fingerprints submitted electronically,
the fees are $29.50 per initial submission, $15.00 per second
submission, and $29.50 per third submission.\6\ By updating the
fingerprinting fees, the Exchange would properly reflect the fees
assessed today by FINRA.\7\
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\6\ See Securities Exchange Act Release No. 67247 (June 25,
2012) 77 FR 38866 (June 29, 2012) (SR-FINRA-2012-030) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Sections 4 and 6 of Schedule A to the FINRA By-Laws Regarding Fees
Relating to the Central Registration Depository). FINRA notes in
this rule change that it is proposing a two-tiered fingerprint
processing fee structure in part to reflect that the costs
associated with processing fingerprints submitted via a hard copy
fingerprint card are much higher than those that are submitted
electronically. Specifically, fingerprints submitted by a hard copy
card require additional processing by FINRA, including adding a
barcode, if necessary, to the card for tracking purposes; scanning
the fingerprints and converting them to a digital image for
submission to the FBI; and, for first-time registrants, entering the
individual's personal and demographic information into the CRD
system. FINRA noted that members will be able to choose how they
submit their associated persons' fingerprints and therefore will
have some control over the fees they incur for fingerprint
processing. FINRA also noted an FBI Fee of $11.25 is assessed as
well.
\7\ See <a href="https://www.finra.org/registration-exams-ce/classic-crd/fingerprints/fingerprint-fees">https://www.finra.org/registration-exams-ce/classic-crd/fingerprints/fingerprint-fees</a>.
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The Exchange is deleting the fees noted within current Equity 7,
Section 9C [sic] at (4)-(6) and (8).\8\ These
[[Page 66376]]
fingerprint fees, which are proposed to be deleted, were superseded by
the FINRA fingerprinting fees which were adopted in 2013.
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\8\ The Exchange proposes to delete the following rule text:
(4) $15 for processing and posting to the CRD system each set of
fingerprints submitted electronically by the member, plus a pass-
through of any other charge imposed by the United States Department
of Justice for processing each set of fingerprints;
(5) $30 for processing and posting to the CRD system each set of
fingerprint cards submitted in non-electronic format by the member
to FINRA, plus any other charge that may be imposed by the United
States Department of Justice for processing each set of
fingerprints;
(6) $30 for processing and posting to the CRD system each set of
fingerprint results and identifying information that has been
processed through a self-regulatory organization other than FINRA;
and
(8) $110 for the additional processing of each initial or
amended Form BD that includes the initial reporting, amendment, or
certification of one or more disclosure events or proceedings.
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Finally, the Exchange proposes to add a new title, ``Continuing
Education Fee:'' and proposes to provide an introductory paragraph to
those fees that 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.'' The
incorrect citation to Rule 1120 is being removed from the current rule
text.
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,\9\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\10\ 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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\9\ 15 U.S.C. 78f(b).
\10\ 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.\11\
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.
Amending the title of the $45 fee to be more precise will provide
greater transparency to this fee. Updating FINRA's fingerprint
processing fees to reflect the current charges will bring greater
transparency to these charges that are currently assessed and collected
by FINRA. Also, 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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\11\ 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.
Amending the title of the $45 fee to be more precise will provide
greater transparency to this fee. Updating the fingerprint processing
fees to reflect the current fees is equitable and not unfairly
discriminatory as FINRA currently assesses these rates to all members.
Finally, making clear that FINRA, on behalf of the Exchange, will bill
and collect these fees and referencing the rule which governs 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
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 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 does not impose
an undue burden on competition 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. Amending the title of the $45
fee to be more precise will provide greater transparency to this fee.
Updating the fingerprint processing fees to reflect the current fees
does not impose an undue burden on competition as FINRA currently
assesses these rates to all members. Finally, making clear that FINRA,
on behalf of the Exchange, will bill and collect these fees and
referencing the rule which governs 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.\12\
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\12\ 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#3e4c4b525b135d5153535b504a4d7e4d5b5d10595148"><span class="__cf_email__" data-cfemail="ee9c9b828bc38d8183838b809a9dae9d8b8dc0898198">[email protected]</span></a>. Please include
File Number SR-BX-2021-052 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.
[[Page 66377]]
All submissions should refer to File Number SR-BX-2021-052. 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-BX-2021-052, and should be submitted on
or before December 13, 2021.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25353 Filed 11-19-21; 8:45 am]
BILLING CODE 8011-01-P
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