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

CourtSecurities And Exchange Commission
Citation86 FR 73830
Record Number2021-28109
Publication Date28 December 2021
73830
Federal Register / Vol. 86, No. 246 / Tuesday, December 28, 2021 / Notices
1
15 U.S.C. 78s(b)(1).
2
15 U.S.C. 78a.
3
17 CFR 240.19b–4.
4
15 U.S.C. 78s(b)(3)(A)(ii).
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.
9
See Securities Exchange Act Release No. 90176
(October 14, 2020), 85 FR 66592 (October 20, 2020)
(SR–FINRA–2020–032) (‘‘FINRA Fee Filing’’).
10
15 U.S.C. 78f(b).
11
15 U.S.C. 78f(b)(4) and (5).
12
See supra note 9.
13
See supra note 9.
14
See supra note 9.
15
See supra note 9.
16
See supra note 9.
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.
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
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.
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.
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.
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
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
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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73831
Federal Register / Vol. 86, No. 246 / Tuesday, December 28, 2021 / Notices
17
15 U.S.C. 78s(b)(3)(A)(ii).
18
15 U.S.C. 78s(b)(2)(B).
19
17 CFR 200.30–3(a)(12).
1
15 U.S.C. 78s(b)(1).
2
17 CFR 240.19b–4.
3
See Securities Exchange Act Release No. 93514
(November 3, 2021), 86 FR 62229 (‘‘Transfer
Notice’’).
4
15 U.S.C. 78s(b)(1).
5
17 CFR 240.19b–4.
6
See Securities Exchange Act Release No. 93513
(November 3, 2021), 86 FR 62222 (‘‘Merger
Notice’’).
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.
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.
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 rule-comments@
sec.gov. 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
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–28109 Filed 12–27–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93848; File Nos. SR–BX–
2021–050; SR–BX–2021–051]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Order Approving Proposed
Rule Changes Regarding the Transfer
of Ownership of Nasdaq BX Equities
LLC and the Merger of Nasdaq BX
Equities LLC With and Into the
Exchange
December 21, 2021.
I. Introduction
On October 22, 2021, Nasdaq BX, Inc.
(‘‘BX’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’)
1
and Rule 19b–4
thereunder,
2
a proposed rule change
regarding the transfer of Nasdaq, Inc.’s
(‘‘Nasdaq HoldCo’’) entire ownership
interest in Nasdaq BX Equities LLC
(‘‘BX Equities’’) to the Exchange
(‘‘Transfer Proposal’’). The Transfer
Proposal was published for comment in
the Federal Register on November 9,
2021.
3
Also on October 22, 2021, the
Exchange filed with the Commission,
pursuant to Section 19(b)(1) of the Act
4
and Rule 19b–4 thereunder,
5
a proposed
rule change regarding the merger of BX
Equities with and into the Exchange
(‘‘Merger Proposal’’). The Merger
Proposal was published for comment in
the Federal Register on November 9,
2021.
6
The Commission received no
comment letters on the proposed rule
changes. This order approves the
proposed rule changes.
II. Description of the Proposals
The Exchange proposes, through the
Transfer Proposal and the Merger
Proposal, a two-step process that will
first allow the Exchange to become the
100% direct owner and sole LLC
member of BX Equities, and
subsequently allow the merger of BX
Equities with and into the Exchange
(‘‘Transactions’’).
A. Transfer Proposal
BX Equities was acquired by Nasdaq
HoldCo in 2008, and was established as
a facility of and controlled subsidiary
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