Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend References to FINRA Continuing Education Fees
| Published date | 28 January 2022 |
| Citation | 87 FR 4680 |
| Record Number | 2022-01703 |
| Section | Notices |
| Court | Securities And Exchange Commission |
Federal Register, Volume 87 Issue 19 (Friday, January 28, 2022)
[Federal Register Volume 87, Number 19 (Friday, January 28, 2022)]
[Notices]
[Pages 4680-4683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01703]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94040; File No. SR-GEMX-2022-02]
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend References
to FINRA Continuing Education Fees
January 24, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 11, 2022, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``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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[[Page 4681]]
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 & Regulatory, to reflect adjustments to FINRA
Continuing Education Fees.
While the changes proposed herein are effective upon filing, the
Exchange has designated the new Maintaining Qualifications Program
(``MQP'') Fee, elimination of the $100 Continuing Education Session
Fee, and technical amendments to become operative on January 31, 2022.
Additionally, the Exchange designates an $18 Continuing Education
Regulatory Element Session Fee to become operative on January 1,
2023.\3\
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\3\ See Securities Exchange Act Release No. 93928 (January 7,
2022) (SR-FINRA-2021-034).
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The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/gemx/rules, 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 GEMX's Pricing Schedule at Options 7, Section
5, Legal & Regulatory, to reflect adjustments to FINRA Continuing
Education Fees.\4\ 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 Continuing Education Fees within Options
7, Section 5B on behalf of the Exchange. The fees listed within Options
7, Section 5B reflect fees set by FINRA.
Specifically, the Exchange proposes to decrease the $55 Continuing
Education Web-based Fee to $18. This amendment is made in accordance
with a recent FINRA rule change to adjust to its fees.\5\ FINRA
currently charges a fee of $55 to each individual who completes the
Regulatory Element of the Continuing Education Requirements pursuant to
Exchange General 4, Section 1240. In conjunction with the amendments to
transition to an annual Regulatory Element requirement, FINRA amended
the Continuing Education Regulatory Element Session Fee from $55 to
$18.\6\ FINRA indicated in the Continuing Education Fee Filing that it
would begin assessing the $18 Continuing Education Regulatory Element
Session Fee as of January 1, 2023 to coincide with the effective date
of the transition to an annual Regulatory Element requirement.\7\
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\5\ See note 3 above. On September 21, 2021, the SEC approved
amendments to FINRA Rules 1210 (Registration Requirements) and 1240
(Continuing Education Requirements) to, among other things, require
registered persons to complete the Regulatory Element of CE annually
by December 31 of each year, rather than every three years, and to
complete Regulatory Element content for each representative or
principal registration category that they hold. See Securities
Exchange Act Release No. 93097 (September 21, 2021), 86 FR 53358
(September 27, 2021) (Order Approving File No. SR-FINRA-2021-015).
The Regulatory Element is administered by FINRA and focuses on
regulatory requirements and industry standards. The proposed rule
change also included amendments to the Firm Element training, which
is provided by each firm annually to its registered persons and
focuses on securities products, services and strategies the firm
offers, firm policies and industry trends.
\6\ FINRA notes that the proposed $18 annual fee is comparable
to the current $55 fee over a three-year period. Moreover, the
proposed fee for the annual Regulatory Element would be the same for
all registered persons, regardless of the amount of annual content
that they would be required to complete (that is, an individual who
holds multiple registrations would be subject to the same proposed
$18 annual fee as an individual who holds a single registration).
See note 3 above.
\7\ The Exchange would file to remove the rule text concerning
the $55 fee once the $18 fee becomes operative.
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The Exchange proposes to eliminate the $100.00 continuing education
fee for each individual who is required to complete the S101 or S201.
This fee applied to continuing education programs administered at test
centers. In 2015, FINRA filed to end test center delivery of the
Regulatory Element.\8\ Effective October 1, 2015, Web-based delivery
has been available for the Regulatory Element. The revised fee of $18
is a Web-based delivery. The Exchange proposes to remove the outdated
continuing education fee of $100 from its Pricing Schedule related to
test center delivery.
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\8\ 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). FINRA phased out the test center delivery
as of July 1, 2016. See FINRA Information Notice dated May 16, 2016
(https://www.finra.org/rules-guidance/notices/information-notice-051616).
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The Exchange also proposes to adopt a new Maintaining
Qualifications Program (``MQP'') Fee of $100 fee for each individual
electing to participate in the continuing education program, following
the termination of a registration category, under FINRA Rule 1240(c)
for each year that such individual is participating in the program.
Individuals who elect to participate in the MQP within two years from
the termination of a registration would also be assessed any accrued
annual fee. The proposed annual fee would be assessed at the time an
eligible individual elects to participate in the continuing education
program under FINRA Rule 1240(c) and thereafter annually each year that
the individual continues in the program. This fee is paid directly to
FINRA. FINRA indicated in the Continuing Education Fee Filing that it
would begin assessing the $100 MQP fee as of January 31, 2022.
With respect to the rule text, the current $55 Continuing Education
Fee is being reworded to reflect the elimination of the $100 fee and
renamed the ``Continuing Education Regulatory Element Session Fee.''
The $55 will remain in effect until January 1, 2023 so it is being
retained in the Pricing Scheduled with a note that ``This fee will be
amended on January 1, 2023 as noted below.''
The FINRA 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.
Technical Amendment
The Exchange also proposes to make a technical amendment within the
FINRA Web CRD Fees to the following sentence, ``$110--For the
additional processing of each initial or amended
[[Page 4682]]
Form U4, Form U5 or Form BD that includes the initial reporting,
amendment or certification of one of more disclosure events or
proceedings.'' The Exchange proposes to change the word ``of'' to
``or.''
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 decrease the $55
Continuing Education Regulatory Element Session Fee for all
Registrations to $18 in accordance with an adjustment to FINRA's
fees.\11\ The Exchange's rule text will reflect the current rates for
continuing education that will be assessed by FINRA as of January 1,
2023. The proposed fee is identical to a fee adopted by FINRA related
to its continuing education. The costs are borne by FINRA when a Non-
FINRA member engages in continuing education.
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\11\ See note 3 above.
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The Exchange believes eliminating the outdated $100 fee for
continuing education is reasonable as test center delivery of the
Regulatory Element was phased out in 2016 and the continuing education
programs are no longer offered at testing centers.\12\
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\12\ See note 8 above.
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The Exchange believes that it is reasonable to adopt a new MQP Fee
of $100 for each individual electing to participate in the continuing
education program under FINRA Rule 1240(c) for each year that such
individual is participating in the program. Individuals who elect to
participate in the program within two years from the termination of a
registration would also be assessed any accrued annual fee. The
proposed fee is identical to a fee adopted by FINRA related to its
continuing education. The costs are borne by FINRA when a Non-FINRA
member engages in continuing education.
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.
Technical Amendment
The Exchange's proposal to make a technical amendment within the
FINRA Web CRD Fees is reasonable, equitable and not unfairly
discriminatory as it is a non-substantive amendment.
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.
Specifically, the Exchange does not believe that this proposal creates
an unnecessary or inappropriate intra-market burden on competition as
the decreased Continuing Education Regulatory Element Session Fee for
all Registrations of $18 will be assessed by FINRA to all Members who
are required to complete the Regulatory Element of the Continuing
Education Requirements pursuant to Exchange General 4, Section 1240.
Likewise, with respect to the $100 MQP Fee, the Exchange does not
believe that this proposal creates an unnecessary or inappropriate
intra-market burden on competition because the fee will be assessed by
FINRA to all individuals electing to participate in the continuing
education program under FINRA Rule 1240(c) for each year that such
individual is participating in the program. Finally, eliminating the
outdated $100 fee for continuing education does not create an
unnecessary or inappropriate intra-market burden on competition as test
center delivery of the Regulatory Element was phased out and the
continuing education programs are no longer offered at testing
centers.\13\ 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.
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\13\ See note 8 above.
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Technical Amendment
The Exchange's proposal to make a technical amendment within the
FINRA Web CRD Fees does not impose an undue burden on competition as it
is a non-substantive amendment.
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.\14\
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\14\ 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
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-GEMX-2022-02 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-GEMX-2022-02. 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
[[Page 4683]]
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; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly.
All submissions should refer to File Number SR-GEMX-2022-02 and
should be submitted on or before February 18, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01703 Filed 1-27-22; 8:45 am]
BILLING CODE 8011-01-P
