Self-Regulatory Organizations; Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the FINRA Registration Fees on the Fee Schedule
| Citation | 86 FR 73830 |
| Record Number | 2021-28109 |
| Published date | 28 December 2021 |
| Section | Notices |
| Court | Securities And Exchange Commission |
Federal Register, Volume 86 Issue 246 (Tuesday, December 28, 2021)
[Federal Register Volume 86, Number 246 (Tuesday, December 28, 2021)]
[Notices]
[Pages 73830-73831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28109]
[[Page 73830]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93841; File No. SR-IEX-2021-18]
Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
FINRA Registration Fees on the Fee Schedule
December 21, 2021.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on December 20, 2021, the Investors Exchange LLC (``IEX''
or the ``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 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
Pursuant to the provisions of Section 19(b)(1) under the Act, and
Rule 19b-4 thereunder, IEX is filing with the Commission a proposed
rule change pursuant to IEX Rule 15.110(a) to amend its Fee Schedule to
reflect adjustments to FINRA's Registration Fees related to the Central
Registration Depository (``CRD system''), which will be collected by
the Financial Industry Regulatory Authority, Inc. (``FINRA'') pursuant
to IEX Rule 15.110(a). The Exchange has designated this proposal as
establishing or changing a due, fee, or other charge imposed by the
self-regulatory organization, whether or not the person is a member of
the self-regulatory organization, which renders the proposed rule
change effective upon filing, pursuant to Section 19(b)(3(A)(ii) of the
Act.\4\
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\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
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The text of the proposed rule change is available at the Exchange's
website at www.iextrading.com, 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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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
IEX is proposing, pursuant to IEX Rule 15.110(a), to amend its Fee
Schedule \5\ to reflect adjustments to FINRA's Registration Fees
related to the CRD system.\6\ FINRA charges a single fee to register
any representative or principal of a member firm in the CRD system
irrespective of if the member firm is also a member of FINRA. Because
FINRA separately collects the CRD system fee for any IEX Member \7\
that is also a FINRA member,\8\ this fee filing only applies to IEX
Members who are not FINRA members.
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\5\ See https://exchange.iex.io/resources/trading/fee-schedule/.
\6\ The CRD system 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.
\7\ See IEX Rule 1.160(s).
\8\ IEX Members that are also FINRA members are charged CRD
system fees according to Section (4) of Schedule A to the FINRA By-
Laws.
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Effective January 3, 2022, FINRA is increasing the fee it charges
for each initial Form U4 filed for the registration of a representative
or principal of any firm registered in the CRD system from $100 to
$125.\9\ Accordingly, IEX is proposing to update its Fee Schedule to
reflect the new $125 CRD system fee that will take effect starting
January 3, 2022. Because these costs are borne by FINRA when a non-
FINRA member uses the CRD system, FINRA will continue to collect and
retain these fees for the registration of associated persons of IEX
Members that are not also FINRA members.
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\9\ See Securities Exchange Act Release No. 90176 (October 14,
2020), 85 FR 66592 (October 20, 2020) (SR-FINRA-2020-032) (``FINRA
Fee Filing'').
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2. Statutory Basis
IEX believes that the proposed rule change is consistent with the
provisions of Section 6(b) of the Act,\10\ of the Act in general, and
furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\11\
in particular, in that it provides for the equitable allocation of
reasonable fees and other charges among its members, and does not
unfairly discriminate between customers, issuers, brokers and dealers.
All similarly situated Members are subject to the same fee structure,
and every Member firm must use the CRD system for registration and
disclosure.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4) and (5).
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The proposed fee is reasonable because it is identical to the fee
adopted by FINRA for use of the CRD system for disclosure and the
registration of associated persons of FINRA members.\12\ Thus, the
Exchange's Fee Schedule will reflect the current registration rate that
will be assessed by FINRA as of January 3, 2022 for any IEX Members
that are not also FINRA members. IEX also believes the proposed fee
change is reasonable, because, as noted in the FINRA Fee Filing, FINRA
is increasing the CRD system fees to provide enough revenue to support
its regulatory mission.\13\ Notably, FINRA has not increased CRD system
fees since 2012.\14\
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\12\ See supra note 9.
\13\ See supra note 9.
\14\ See supra note 9.
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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
because the equivalent fees will be charged by FINRA of all users of
the CRD system, whether or not they are FINRA members. Therefore, all
users of the CRD system will equally bear the cost of maintaining the
system.\15\
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\15\ See supra note 9.
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FINRA further noted its belief that the proposed fees are
reasonable because they help to ensure the integrity of the information
in the CRD system, which is important because the Commission, FINRA,
other self-regulatory organizations and state securities regulators use
the CRD system to make licensing and registration decisions, among
other things.\16\
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\16\ See supra note 9.
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[[Page 73831]]
B. Self-Regulatory Organization's Statement on Burden on Competition
IEX does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. Specifically, the
Exchange believes that the proposed fees will result in the same
regulatory fees being charged to all Members required to report
information to the CRD system and for services performed by FINRA,
regardless of whether or not such Members are FINRA members.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor 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) \17\ of the Act.
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\17\ 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 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) \18\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\18\ 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
Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-IEX-2021-18 on the subject line.
Paper Comments
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-IEX-2021-18. 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 (http://www.sec.gov/rules/sro.shtml).
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 will also be available for inspection
and copying at the IEX's principal office and on its internet website
at www.iextrading.com. 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-IEX-2021-18
and should be submitted on or before January 18, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-28109 Filed 12-27-21; 8:45 am]
BILLING CODE 8011-01-P
