Notice2023-01274
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Options Fee Schedule
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
January 24, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 15 (Tuesday, January 24, 2023)</title>
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[Federal Register Volume 88, Number 15 (Tuesday, January 24, 2023)]
[Notices]
[Pages 4260-4262]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-01274]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96698; File No. SR-NYSEARCA-2023-03]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Options Fee Schedule
January 18, 2023.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on January 3, 2023, NYSE Arca, Inc. (``NYSE Arca'' or the
``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 self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 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 its NYSE Arca Options Fees and
Charges (the ``Fee Schedule'') with respect to certain regulatory fees
related to the Central Registration Depository (``CRD'' or ``CRD
system''), which are collected by the Financial Industry Regulatory
Authority, Inc. (``FINRA''). The Exchange proposes to implement the fee
change on January 3, 2023. The proposed rule change is available on the
Exchange's website at <a href="http://www.nyse.com">www.nyse.com</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 self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule with respect to
certain regulatory fees collected by FINRA for use of CRD.\4\ The
Exchange proposes to implement the fee changes effective January 3,
2023.
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\4\ CRD is the central licensing and registration system for the
U.S. securities industry. The CRD system enables individuals and
firms seeking registration with multiple states and self-regulatory
organizations to do so by submitting a single form, fingerprint
card, and a combined payment of fees to FINRA. Through the CRD
system, FINRA maintains the qualification, employment, and
disciplinary histories of registered associated persons of broker-
dealers.
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FINRA collects and retains certain regulatory fees via CRD for the
registration of associated persons of Exchange OTP Holders and OTP
Firms that are not FINRA members (``Non-
[[Page 4261]]
FINRA OTP Holders'').\5\ 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 OTP Holder.
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\5\ The Exchange originally adopted fees for use of the CRD
system in 2005 and amended those fees in 2013 and 2022. See
Securities Exchange Act Release No. 51641 (May 2, 2005), 70 FR 24155
(May 6, 2005) (SR-PCX-2005-49); Securities Exchange Act Release
No.68590 (January 4, 2013), 78 FR 2470 (January 11, 2013) (SR-
NYSEArca-2012-145); Securities Exchange Act Release No. 93899
(January 5, 2022), 87 FR 1455 (January 11, 2022) (SR-NYSEArca-2021-
106). While the Exchange lists these fees in its Fee Schedule, it
does not collect or retain these fees.
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FINRA recently amended two of the fees assessed for use of the CRD
system.\6\ Accordingly, the Exchange proposes to amend the Fee Schedule
to mirror the fees assessed by FINRA, which will be implemented
concurrently with the amended FINRA fee as of January 2023.\7\
Specifically, the Exchange proposes to amend the Fee Schedule to modify
the fee charged to Non-FINRA OTP Holders for additional processing of
each initial or amended Form U4, Form U5 or Form BD that includes the
initial reporting, amendment, or certification of one or more
disclosure events or proceedings from $110 to $155 \8\ and the fee for
processing and posting to the CRD system each set of fingerprints
submitted electronically to FINRA, plus any other charge that may be
imposed by the U.S. Department of Justice for processing each set of
fingerprints, from $15 to $20.\9\
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\6\ See Securities Exchange Act Release No. 90176 (October 14,
2020), 85 FR 66592 (October 20, 2020) (SR-FINRA-2020-032).
\7\ The Exchange notes that it has only adopted the CRD system
fees charged by FINRA to Non-FINRA OTP Holders when such fees are
applicable. In this regard, certain FINRA CRD system fees and
requirements are specific to FINRA members, but do not apply to NYSE
Arca-only OTP Holders. Non-FINRA OTP Holders have been charged CRD
system fees since 2005. See note 5, supra. OTP Holders that are also
FINRA members are charged CRD system fees according to Section 4 of
Schedule A to the FINRA By-Laws.
\8\ See Section (4)(b)(3) of Schedule A to the FINRA By-laws.
\9\ See Section (4)(b)(4) of Schedule A to the FINRA By-laws.
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The Exchange notes that the proposed change is not otherwise
intended to address any other issues surrounding regulatory fees, and
the Exchange is not aware of any problems that OTP Holders would have
in complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\10\ in general, and furthers the
objectives of Section 6(b)(4) \11\ of the Act, in particular, in that
it is designed to provide for the equitable allocation of reasonable
dues, fees, and other charges. The Exchange also believes that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\12\
in that it is designed to promote just and equitable principles of
trade, to foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in securities, to remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
\12\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed fee change is reasonable
because the fee will be identical to that adopted by FINRA for use of
the CRD system to submit an initial or amended Form U4, Form U5 or Form
BD that includes the initial reporting, amendment, or certification of
one or more disclosure events or proceedings and the posting to CRD
each set of fingerprints submitted electronically to FINRA. The costs
of operating and improving the CRD system are similarly borne by FINRA
when a Non-FINRA OTP Holder uses the CRD system; accordingly, the fees
collected for such use should, as proposed by the Exchange, mirror the
fees assessed to FINRA members. In addition, as FINRA noted in amending
its fees, it believes that its proposed pricing structure is reasonable
and correlates fees with the components that drive its regulatory costs
to the extent feasible. The Exchange further believes that the change
is reasonable because it will provide greater specificity regarding the
CRD system fees that are applicable to Non-FINRA OTP Holders. All
similarly situated OTP Holders are subject to the same fee structure,
and every OTP Holder must use the CRD system for registration and
disclosure. Accordingly, the Exchange believes that the fees collected
for such use should likewise increase in lockstep with the fees
assessed to FINRA members, as is proposed by the Exchange.
The Exchange also believes that the proposed fee change provides
for the equitable allocation of reasonable fees and other charges, and
does not unfairly discriminate between customers, issuers, brokers, and
dealers. The fee applies equally to all individuals and firms required
to report information the CRD system, and the proposed change will
result in the same regulatory fees being charged to all OTP Holders
required to report information to CRD and for services performed by
FINRA regardless of whether such OTP Holders are FINRA members.
Accordingly, the Exchange believes that the fee collected for such use
should increase in lockstep with the fee adopted by FINRA as of January
2023, as is proposed by the Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\13\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Specifically, the Exchange believes that the
proposed change will reflect fees that will be assessed by FINRA as of
January 2023 and will thus result in the same regulatory fees being
charged to all OTP Holders required to report information to the CRD
system and for services performed by FINRA, regardless of whether or
not such OTP Holders are FINRA members.
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\13\ See 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \14\ of the Act and subparagraph (f)(2) of Rule
19b-4 \15\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed
rule
[[Page 4262]]
change should be approved or disapproved.
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\16\ 15 U.S.C. 78s(b)(2)(B).
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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#384a4d545d155b5755555d564c4b784b5d5b165f574e"><span class="__cf_email__" data-cfemail="542621383179373b3939313a2027142731377a333b22">[email protected]</span></a>. Please include
File Number SR-NYSEARCA-2023-03 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-NYSEARCA-2023-03. 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-NYSEARCA-2023-03, and should be
submitted on or before February 14, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-01274 Filed 1-23-23; 8:45 am]
BILLING CODE 8011-01-P
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