83 FR 35696 - Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Schedule of Fees and Rebates To Adopt Two New Adding Tiers and Regulatory Fees in Connection With Use of the Central Registration Depository
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 145 (July 27, 2018)
Federal Register Volume 83, Issue 145 (July 27, 2018)
| Page Range | 35696-35698 | |
| FR Document | 2018-16023 |
[Federal Register Volume 83, Number 145 (Friday, July 27, 2018)] [Notices] [Pages 35696-35698] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-16023] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83687; File No. SR-NYSENAT-2018-16] Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Schedule of Fees and Rebates To Adopt Two New Adding Tiers and Regulatory Fees in Connection With Use of the Central Registration Depository July 23, 2018. 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 July 9, 2018, NYSE National, Inc. (``Exchange'' or ``NYSE National'') filed with the Securities and Exchange Commission (``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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its Schedule of Fees and Rebates to adopt (1) two new adding tiers, and (2) regulatory fees in connection with use of the Central Registration Depository (``CRD'') by Exchange ETP Holders that are not also members of the Financial Industry Regulatory Authority, Inc. (``FINRA''). The Exchange proposes to implement the rule change on July 9, 2018.\4\ The proposed rule change is available on the Exchange's website at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. --------------------------------------------------------------------------- \4\ The Exchange originally filed to amend the Fee Schedule on June 27, 2018 (SR-NYSENAT-2018-14) and withdrew such filing on July 9, 2018. This filing replaces SR-NYSENAT-2018-14 in its entirety. --------------------------------------------------------------------------- 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 its Schedule of Fees and Rebates to adopt (1) two new adding tiers, and (2) regulatory fees in connection with use of CRD. The Exchange proposes to implement the rule change on July 9, 2018. Proposed Adding Tiers The Exchange proposes two new adding tiers for displayed and non- displayed orders in securities priced at or above $1.00, as follows. Current Adding Tier would be re-named ``Adding Tier 1.'' Adding Tier 2 Under proposed Adding Tier 2, the Exchange would offer the following fees for transactions in stocks with a per share price of $1.00 or more when adding liquidity to the Exchange if the ETP Holder quotes at least 5% of the NBBO \5\ in 1,000 or more symbols on an average daily basis, calculated monthly: --------------------------------------------------------------------------- \5\ The Exchange would explain the proposed 5% requirement in a new footnote **. As proposed, ETP Holders would have to maintain a bid or an offer at the NBB or the NBO for at least 5% of the trading day in round lots in a security for that security to count toward the tier requirement. The terms ``NBB,'' ``NBO,'' ``NBBO,'' and ``BBO'' are defined in NYSE National Rule 1.1. The Exchange believes that the proposed 5% threshold is appropriate for a market of NYSE National's size and trading volume. ---------------------------------------------------------------------------$0.0005 per share for adding displayed orders; $0.0005 per share for orders that set a new Exchange BBO; $0.0007 per share for adding non-displayed orders; and $0.0005 per share for MPL orders. For example, in a given month, if an ETP Holder quotes at least 5% of the NBBO in 800 symbols in round lots on the first day of the month and 1,400 symbols on the second day of the month, the ETP Holder would have 1,100 securities on average daily basis that meet the 5% NBBO requirement after the second day, and would qualify for the proposed Adding Tier 2 after the second day. Further, in a given symbol on a given day, if the ETP Holder maintains a bid at the NBB for 4% of the trading day and an offer at the NBO for 8% of the trading day, that would result in the ETP Holder quoting 6% of the NBBO in that symbol for that day and that symbol meeting the 5% NBBO requirement for that day. Adding Tier 3 Under proposed Adding Tier 3, the Exchange would offer the following fees for transactions in stocks with a per share price of $1.00 or more when adding liquidity to the Exchange if the ETP Holder quotes at least 5% of the NBBO \6\ in 600 or more symbols on an average daily basis, calculated monthly: --------------------------------------------------------------------------- \6\ See note 5, supra. --------------------------------------------------------------------------- $0.0012 per share for adding displayed orders; $0.0012 per share for orders that set a new Exchange BBO; $0.0014 per share for adding non-displayed orders; and $0.0005 per share for MPL orders. Finally, as reflected in footnote * of the Schedule of Fees and Rebates, the volume requirements for the current [[Page 35697]] Adding Tier and the Taking Tier are waived until July 1, 2018. The Exchange proposes to extend the volume requirements [sic] for these tiers indefinitely. To effect this change, the Exchange would delete ``until July 1, 2018'' from footnote *. As noted, the current Adding Tier would be re-named ``Adding Tier 1,'' which will also be reflected in footnote *. CRD Fees The Exchange proposes to adopt regulatory fees related to CRD that would be collected by FINRA.\7\ As proposed, FINRA would collect and retain certain regulatory fees via CRD for the registration of persons associated with an Exchange ETP Holder that is not also a FINRA member. The CRD fees are use-based and there is no distinction in the cost incurred by FINRA if the user is a FINRA member or a member of an exchange but not a FINRA member. Accordingly, the Exchange proposes to adopt the following fees to mirror those assessed by FINRA pursuant to Section (4) of Schedule A to the FINRA By-Laws: \8\ --------------------------------------------------------------------------- \7\ 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 CRD, FINRA maintains the qualification, employment and disciplinary histories of registered associated persons of broker dealers. \8\ The proposed CRD fees are those charged by FINRA to non- FINRA members when such fees are applicable. The Exchange notes that there are certain FINRA CRD fees and requirements that are specific to FINRA members but do not apply to Exchange ETP Holders that are not also FINRA members. Exchange ETP Holders that are also FINRA members would be charged CRD fees according to Section (4) of Schedule A to the FINRA By-Laws. --------------------------------------------------------------------------- (1) $100 for each initial Form U4 filed for the registration of a representative or principal; (2) $110 for the 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; (3) $15 for processing and posting to the CRD system each set of fingerprint cards 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; (4) $30 for processing and posting to the CRD system each set of fingerprint cards submitted in non-electronic format 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 results and identifying information that has been processed through another self-regulatory organization and submitted to FINRA; and (6) $45 annually for system processing for each registered representative and principal. * * * * * The proposed changes are not otherwise intended to address any other issues, and the Exchange is not aware of any problems that ETP 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,\9\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\10\ in particular, because it provides for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b). \10\ 15 U.S.C. 78f(b)(4) & (5). --------------------------------------------------------------------------- New Adding Tiers The Exchange believes that the proposed Adding Tier 2 and Adding Tier 3 fees for ETP Holder with at least 5% of the NBBO in 1,000 or more symbols on an average daily basis, calculated monthly or 600 or more symbols on an average daily basis, calculated monthly, respectively, who maintain a bid or an offer at the NBB or NBO in each assigned security in round lots averaging at least 5% of the trading day on an average daily basis, calculated monthly, in securities with a per share price of $1.00 or more when adding liquidity are reasonable because the proposed tiers would further contribute to incentivizing ETP Holders to provide increased displayed liquidity on the Exchange, benefiting all ETP Holders. In addition, the Exchange believes that the proposed Adding Tier 2 and Adding Tier 3 fees are equitable and not unfairly discriminatory as all similarly situated market participants will be subject to the same fees on an equal and non-discriminatory basis. The Exchange further believes that providing the same fee for adding displayed orders as that for orders that set a new Exchange BBO under Adding Tier 2 and Adding Tier 3 is reasonable because the $0.0005 and $0.0012 fee per share in Adding Tier 2 and Adding Tier 3, respectively, are sufficient incentive for providing liquidity. Finally, the Exchange believes it is reasonable to indefinitely waive the Adding Tier (which would be re-named Adding Tier 1) and Taking Tier volume requirements because the waiver will enable the Exchange to continue to improve its overall competitiveness and strengthen its market quality for all market participants. The proposed waiver is not unfairly discriminatory because it will apply equally to all similarly situated ETP Holders. CRD Fees The proposed CRD fees are reasonable because they are identical to those adopted by FINRA for use of the CRD system for disclosure and the registration of associated persons of FINRA members.\11\ As FINRA noted in its filing adopting its existing fees, FINRA believes the fees are reasonable based on the increased costs associated with operating and maintaining the CRD system, and listed a number of enhancements made to the CRD system since the last fee increase, including: (1) Incorporation of various uniform registration form changes; (2) electronic fingerprint processing; (3) Web EFTTM, which allows subscribing firms to submit batch filings to the CRD system; (4) increases in the number and types of reports available through the CRD system; and (5) significant changes to BrokerCheck, including making BrokerCheck easier to use and expanding the amount of information made available through the system.\12\ These increased costs are similarly borne by FINRA when an Exchange ETP Holder that is not a FINRA member uses the CRD system, so the fees collected for such use should, as proposed by the Exchange, mirror the fees assessed on FINRA members. FINRA further noted 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.\13\ --------------------------------------------------------------------------- \11\ See Securities Exchange Act Release No. 67247 (June 25, 2012), 77 FR 38866 (June 29, 2012) (SR-FINRA-2012-30). \12\ See id., 77 FR at 38868. \13\ Id. --------------------------------------------------------------------------- The Exchange similarly believes that the proposed fees, like FINRA's fees, are consistent with an equitable allocation of fees because the fees will apply equally to all individuals and firms required to report information to the [[Page 35698]] CRD system. Thus, those members that register more individuals or submit more filings through the CRD system will generally pay more in fees than those that use the CRD system to a lesser extent. In addition, the proposed fees, like FINRA's fees, are equitable and not unfairly discriminatory because they will result in the same regulatory fees being charged to all ETP Holders required to report information to the CRD system and for services performed by FINRA, regardless of whether or not such ETP Holder is a FINRA member. Further, the Exchange believes the proposed CRD fees provide for the equitable allocation of reasonable fees and other charges among its permit holders, and does not unfairly discriminate between customers, issuers, brokers and dealers. All similarly situated ETP Holders are subject to the same fee structure, and every Member firm must use the CRD system for registration and disclosure. Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange's statement regarding the burden on competition. For the foregoing reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\14\ 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. Instead, the Exchange believes that the proposed changes would encourage the submission of additional liquidity to a public exchange, thereby promoting price discovery and transparency and enhancing order execution opportunities for ETP Holders. The Exchange believes that this could promote competition between the Exchange and other execution venues, including those that currently offer similar order types and comparable transaction pricing, by encouraging additional orders to be sent to the Exchange for execution. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees and rebates to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees and credits in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. As a result of all of these considerations, the Exchange does not believe that the proposed changes will impair the ability of ETP Holders or competing order execution venues to maintain their competitive standing in the financial markets. 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) \15\ of the Act and subparagraph (f)(2) of Rule 19b-4 \16\ thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(3)(A). \16\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- 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) \17\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- 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-NYSENAT-2018-16 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSENAT-2018-16. 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 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-NYSENAT-2018-16 and should be submitted on or before August 17, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\18\ --------------------------------------------------------------------------- \18\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-16023 Filed 7-26-18; 8:45 am] BILLING CODE 8011-01-P
![35696 Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices
be implemented without undue delay. (‘‘Commission’’) the proposed rule Adding Tier would be re-named
The Commission notes that the prior change as described in Items I, II, and ‘‘Adding Tier 1.’’
version of this plan immediately prior to III below, which Items have been
Adding Tier 2
this proposed amendment was prepared by the self-regulatory
published for comment and the organization. The Commission is Under proposed Adding Tier 2, the
Commission did not receive any publishing this notice to solicit Exchange would offer the following fees
comments thereon.19 Furthermore, the comments on the proposed rule change for transactions in stocks with a per
Commission does not believe that the from interested persons. share price of $1.00 or more when
amendment to the plan raises any new adding liquidity to the Exchange if the
I. Self-Regulatory Organization’s ETP Holder quotes at least 5% of the
regulatory issues that the Commission
Statement of the Terms of Substance of NBBO 5 in 1,000 or more symbols on an
has not previously considered.
the Proposed Rule Change average daily basis, calculated monthly:
VI. Conclusion The Exchange proposes to amend its • $0.0005 per share for adding
This order gives effect to the Schedule of Fees and Rebates to adopt displayed orders;
Amended Plan filed with the (1) two new adding tiers, and (2) • $0.0005 per share for orders that set
Commission in File No. 4–678. The regulatory fees in connection with use a new Exchange BBO;
parties shall notify all members affected of the Central Registration Depository • $0.0007 per share for adding non-
by the Amended Plan of their rights and (‘‘CRD’’) by Exchange ETP Holders that displayed orders; and
obligations under the Amended Plan. are not also members of the Financial • $0.0005 per share for MPL orders.
It is therefore ordered, pursuant to Industry Regulatory Authority, Inc. For example, in a given month, if an
Section 17(d) of the Act, that the (‘‘FINRA’’). The Exchange proposes to ETP Holder quotes at least 5% of the
Amended Plan in File No. 4–678, implement the rule change on July 9, NBBO in 800 symbols in round lots on
between the FINRA, MIAX, and MIAX 2018.4 The proposed rule change is the first day of the month and 1,400
PEARL, filed pursuant to Rule 17d–2 available on the Exchange’s website at symbols on the second day of the
under the Act, hereby is approved and www.nyse.com, at the principal office of month, the ETP Holder would have
declared effective. the Exchange, and at the Commission’s 1,100 securities on average daily basis
It is further ordered that MIAX and Public Reference Room. that meet the 5% NBBO requirement
MIAX PEARL are each relieved of those after the second day, and would qualify
responsibilities allocated to FINRA II. Self-Regulatory Organization’s for the proposed Adding Tier 2 after the
under the Amended Plan in File No. 4– Statement of the Purpose of, and second day. Further, in a given symbol
678. Statutory Basis for, the Proposed Rule on a given day, if the ETP Holder
Change maintains a bid at the NBB for 4% of the
For the Commission, by the Division of
Trading and Markets, pursuant to delegated In its filing with the Commission, the trading day and an offer at the NBO for
authority.20 self-regulatory organization included 8% of the trading day, that would result
Eduardo A. Aleman, statements concerning the purpose of, in the ETP Holder quoting 6% of the
Assistant Secretary. and basis for, the proposed rule change NBBO in that symbol for that day and
and discussed any comments it received that symbol meeting the 5% NBBO
[FR Doc. 2018–16110 Filed 7–26–18; 8:45 am]
on the proposed rule change. The text requirement for that day.
BILLING CODE 8011–01–P
of those statements may be examined at Adding Tier 3
the places specified in Item IV below.
The Exchange has prepared summaries, Under proposed Adding Tier 3, the
SECURITIES AND EXCHANGE
set forth in sections A, B, and C below, Exchange would offer the following fees
COMMISSION
of the most significant parts of such for transactions in stocks with a per
[Release No. 34–83687; File No. SR– statements. share price of $1.00 or more when
NYSENAT–2018–16] adding liquidity to the Exchange if the
A. Self-Regulatory Organization’s ETP Holder quotes at least 5% of the
Self-Regulatory Organizations; NYSE Statement of the Purpose of, and the NBBO 6 in 600 or more symbols on an
National, Inc.; Notice of Filing and Statutory Basis for, the Proposed Rule average daily basis, calculated monthly:
Immediate Effectiveness of Proposed Change • $0.0012 per share for adding
Rule Change To Amend Its Schedule of displayed orders;
1. Purpose
Fees and Rebates To Adopt Two New • $0.0012 per share for orders that set
Adding Tiers and Regulatory Fees in The Exchange proposes to amend its a new Exchange BBO;
Connection With Use of the Central Schedule of Fees and Rebates to adopt • $0.0014 per share for adding non-
Registration Depository (1) two new adding tiers, and (2) displayed orders; and
July 23, 2018.
regulatory fees in connection with use • $0.0005 per share for MPL orders.
of CRD. Finally, as reflected in footnote * of
Pursuant to Section 19(b)(1) 1 of the The Exchange proposes to implement the Schedule of Fees and Rebates, the
Securities Exchange Act of 1934 (the the rule change on July 9, 2018. volume requirements for the current
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on July 9, Proposed Adding Tiers 5 The Exchange would explain the proposed 5%
2018, NYSE National, Inc. (‘‘Exchange’’ The Exchange proposes two new requirement in a new footnote **. As proposed,
or ‘‘NYSE National’’) filed with the adding tiers for displayed and non- ETP Holders would have to maintain a bid or an
amozie on DSK3GDR082PROD with NOTICES1
Securities and Exchange Commission offer at the NBB or the NBO for at least 5% of the
displayed orders in securities priced at trading day in round lots in a security for that
or above $1.00, as follows. Current security to count toward the tier requirement. The
19 See supra note 12 (citing to Securities
terms ‘‘NBB,’’ ‘‘NBO,’’ ‘‘NBBO,’’ and ‘‘BBO’’ are
Exchange Act Release No. 79974). 4 The Exchange originally filed to amend the Fee defined in NYSE National Rule 1.1. The Exchange
20 17 CFR 200.30–3(a)(34).
Schedule on June 27, 2018 (SR–NYSENAT–2018– believes that the proposed 5% threshold is
1 15 U.S.C. 78s(b)(1).
14) and withdrew such filing on July 9, 2018. This appropriate for a market of NYSE National’s size
2 15 U.S.C. 78a. and trading volume.
filing replaces SR–NYSENAT–2018–14 in its
3 17 CFR 240.19b–4. entirety. 6 See note 5, supra.
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![Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices 35697
Adding Tier and the Taking Tier are (5) $30 for processing and posting to sufficient incentive for providing
waived until July 1, 2018. The Exchange the CRD system each set of fingerprint liquidity.
proposes to extend the volume results and identifying information that Finally, the Exchange believes it is
requirements [sic] for these tiers has been processed through another reasonable to indefinitely waive the
indefinitely. To effect this change, the self-regulatory organization and Adding Tier (which would be re-named
Exchange would delete ‘‘until July 1, submitted to FINRA; and Adding Tier 1) and Taking Tier volume
2018’’ from footnote *. As noted, the (6) $45 annually for system processing requirements because the waiver will
current Adding Tier would be re-named for each registered representative and enable the Exchange to continue to
‘‘Adding Tier 1,’’ which will also be principal. improve its overall competitiveness and
reflected in footnote *. * * * * * strengthen its market quality for all
CRD Fees The proposed changes are not market participants. The proposed
otherwise intended to address any other waiver is not unfairly discriminatory
The Exchange proposes to adopt because it will apply equally to all
regulatory fees related to CRD that issues, and the Exchange is not aware of
any problems that ETP Holders would similarly situated ETP Holders.
would be collected by FINRA.7 As
proposed, FINRA would collect and have in complying with the proposed CRD Fees
retain certain regulatory fees via CRD for change.
The proposed CRD fees are reasonable
the registration of persons associated 2. Statutory Basis because they are identical to those
with an Exchange ETP Holder that is not adopted by FINRA for use of the CRD
also a FINRA member. The CRD fees are The Exchange believes that the
proposed rule change is consistent with system for disclosure and the
use-based and there is no distinction in registration of associated persons of
the cost incurred by FINRA if the user Section 6(b) of the Act,9 in general, and
furthers the objectives of Sections FINRA members.11 As FINRA noted in
is a FINRA member or a member of an its filing adopting its existing fees,
exchange but not a FINRA member. 6(b)(4) and 6(b)(5) of the Act,10 in
particular, because it provides for the FINRA believes the fees are reasonable
Accordingly, the Exchange proposes to based on the increased costs associated
adopt the following fees to mirror those equitable allocation of reasonable dues,
fees, and other charges among its with operating and maintaining the CRD
assessed by FINRA pursuant to Section system, and listed a number of
(4) of Schedule A to the FINRA By- members, issuers and other persons
using its facilities and does not unfairly enhancements made to the CRD system
Laws: 8 since the last fee increase, including: (1)
(1) $100 for each initial Form U4 filed discriminate between customers,
issuers, brokers or dealers. Incorporation of various uniform
for the registration of a representative or registration form changes; (2) electronic
principal; New Adding Tiers fingerprint processing; (3) Web EFTTM,
(2) $110 for the additional processing
The Exchange believes that the which allows subscribing firms to
of each initial or amended Form U4,
Form U5 or Form BD that includes the proposed Adding Tier 2 and Adding submit batch filings to the CRD system;
initial reporting, amendment, or Tier 3 fees for ETP Holder with at least (4) increases in the number and types of
certification of one or more disclosure 5% of the NBBO in 1,000 or more reports available through the CRD
events or proceedings; symbols on an average daily basis, system; and (5) significant changes to
(3) $15 for processing and posting to calculated monthly or 600 or more BrokerCheck, including making
the CRD system each set of fingerprint symbols on an average daily basis, BrokerCheck easier to use and
cards submitted electronically by the calculated monthly, respectively, who expanding the amount of information
Member, plus a pass-through of any maintain a bid or an offer at the NBB or made available through the system.12
other charge imposed by the United NBO in each assigned security in round These increased costs are similarly
States Department of Justice for lots averaging at least 5% of the trading borne by FINRA when an Exchange ETP
processing each set of fingerprints; day on an average daily basis, calculated Holder that is not a FINRA member uses
(4) $30 for processing and posting to monthly, in securities with a per share the CRD system, so the fees collected for
the CRD system each set of fingerprint price of $1.00 or more when adding such use should, as proposed by the
cards submitted in non-electronic liquidity are reasonable because the Exchange, mirror the fees assessed on
format by the Member, plus a pass- proposed tiers would further contribute FINRA members. FINRA further noted
through of any other charge imposed by to incentivizing ETP Holders to provide that the proposed fees are reasonable
the United States Department of Justice increased displayed liquidity on the because they help to ensure the integrity
for processing each set of fingerprints; Exchange, benefiting all ETP Holders. In of the information in the CRD system,
addition, the Exchange believes that the which is important because the
7 CRD is the central licensing and registration
proposed Adding Tier 2 and Adding Commission, FINRA, other self-
system for the U.S. securities industry. The CRD
Tier 3 fees are equitable and not unfairly regulatory organizations and state
system enables individuals and firms seeking securities regulators use the CRD system
registration with multiple states and self-regulatory discriminatory as all similarly situated
organizations to do so by submitting a single form, market participants will be subject to to make licensing and registration
fingerprint card and a combined payment of fees to the same fees on an equal and non- decisions, among other things.13
FINRA. Through CRD, FINRA maintains the The Exchange similarly believes that
qualification, employment and disciplinary discriminatory basis. The Exchange
histories of registered associated persons of broker further believes that providing the same the proposed fees, like FINRA’s fees, are
dealers. fee for adding displayed orders as that consistent with an equitable allocation
8 The proposed CRD fees are those charged by
for orders that set a new Exchange BBO of fees because the fees will apply
amozie on DSK3GDR082PROD with NOTICES1
FINRA to non-FINRA members when such fees are
under Adding Tier 2 and Adding Tier 3 equally to all individuals and firms
applicable. The Exchange notes that there are required to report information to the
certain FINRA CRD fees and requirements that are is reasonable because the $0.0005 and
specific to FINRA members but do not apply to $0.0012 fee per share in Adding Tier 2 11 See Securities Exchange Act Release No. 67247
Exchange ETP Holders that are not also FINRA and Adding Tier 3, respectively, are
members. Exchange ETP Holders that are also (June 25, 2012), 77 FR 38866 (June 29, 2012) (SR–
FINRA members would be charged CRD fees FINRA–2012–30).
9 15 U.S.C. 78f(b). 12 See id., 77 FR at 38868.
according to Section (4) of Schedule A to the FINRA
By-Laws. 10 15 U.S.C. 78f(b)(4) & (5). 13 Id.
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![35698 Federal Register / Vol. 83, No. 145 / Friday, July 27, 2018 / Notices
CRD system. Thus, those members that with other exchanges and with Electronic Comments
register more individuals or submit alternative trading systems that have
more filings through the CRD system been exempted from compliance with • Use the Commission’s internet
will generally pay more in fees than the statutory standards applicable to comment form (http://www.sec.gov/
those that use the CRD system to a lesser exchanges. Because competitors are free rules/sro.shtml); or
extent. In addition, the proposed fees, to modify their own fees and credits in • Send an email to rule-comments@
like FINRA’s fees, are equitable and not response, and because market sec.gov. Please include File Number SR–
unfairly discriminatory because they participants may readily adjust their NYSENAT–2018–16 on the subject line.
will result in the same regulatory fees order routing practices, the Exchange
being charged to all ETP Holders Paper Comments
believes that the degree to which fee
required to report information to the changes in this market may impose any
CRD system and for services performed • Send paper comments in triplicate
burden on competition is extremely to Brent J. Fields, Secretary, Securities
by FINRA, regardless of whether or not limited. As a result of all of these
such ETP Holder is a FINRA member. and Exchange Commission, 100 F Street
considerations, the Exchange does not NE, Washington, DC 20549–1090.
Further, the Exchange believes the
proposed CRD fees provide for the believe that the proposed changes will
impair the ability of ETP Holders or All submissions should refer to File
equitable allocation of reasonable fees Number SR–NYSENAT–2018–16. This
and other charges among its permit competing order execution venues to
maintain their competitive standing in file number should be included on the
holders, and does not unfairly
the financial markets. subject line if email is used. To help the
discriminate between customers,
issuers, brokers and dealers. All Commission process and review your
C. Self-Regulatory Organization’s comments more efficiently, please use
similarly situated ETP Holders are Statement on Comments on the
subject to the same fee structure, and only one method. The Commission will
Proposed Rule Change Received From post all comments on the Commission’s
every Member firm must use the CRD Members, Participants, or Others
system for registration and disclosure. internet website (http://www.sec.gov/
Finally, the Exchange believes that it No written comments were solicited rules/sro.shtml). Copies of the
is subject to significant competitive or received with respect to the proposed submission, all subsequent
forces, as described below in the rule change. amendments, all written statements
Exchange’s statement regarding the with respect to the proposed rule
burden on competition. III. Date of Effectiveness of the change that are filed with the
For the foregoing reasons, the Proposed Rule Change and Timing for Commission, and all written
Exchange believes that the proposal is Commission Action communications relating to the
consistent with the Act. proposed rule change between the
The foregoing rule change is effective
B. Self-Regulatory Organization’s upon filing pursuant to Section Commission and any person, other than
Statement on Burden on Competition 19(b)(3)(A) 15 of the Act and those that may be withheld from the
In accordance with Section 6(b)(8) of subparagraph (f)(2) of Rule 19b–4 16 public in accordance with the
the Act,14 the Exchange believes that the thereunder, because it establishes a due, provisions of 5 U.S.C. 552, will be
proposed rule change would not impose fee, or other charge imposed by the available for website viewing and
any burden on competition that is not Exchange. printing in the Commission’s Public
necessary or appropriate in furtherance Reference Room, 100 F Street NE,
At any time within 60 days of the
of the purposes of the Act. Instead, the Washington, DC 20549 on official
filing of such proposed rule change, the
Exchange believes that the proposed business days between the hours of
Commission summarily may
changes would encourage the 10:00 a.m. and 3:00 p.m. Copies of the
temporarily suspend such rule change if
submission of additional liquidity to a it appears to the Commission that such filing also will be available for
public exchange, thereby promoting action is necessary or appropriate in the inspection and copying at the principal
price discovery and transparency and public interest, for the protection of office of the Exchange. All comments
enhancing order execution investors, or otherwise in furtherance of received will be posted without change.
opportunities for ETP Holders. The the purposes of the Act. If the Persons submitting comments are
Exchange believes that this could Commission takes such action, the cautioned that we do not redact or edit
promote competition between the personal identifying information from
Commission shall institute proceedings
Exchange and other execution venues, comment submissions. You should
under Section 19(b)(2)(B) 17 of the Act to
including those that currently offer submit only information that you wish
determine whether the proposed rule
similar order types and comparable to make available publicly. All
change should be approved or
transaction pricing, by encouraging submissions should refer to File
additional orders to be sent to the disapproved.
Number SR–NYSENAT–2018–16 and
Exchange for execution. IV. Solicitation of Comments should be submitted on or before
Finally, the Exchange notes that it
Interested persons are invited to August 17, 2018.
operates in a highly competitive market
in which market participants can submit written data, views, and For the Commission, by the Division of
readily favor competing venues if they arguments concerning the foregoing, Trading and Markets, pursuant to delegated
deem fee levels at a particular venue to including whether the proposed rule authority.18
amozie on DSK3GDR082PROD with NOTICES1
be excessive or rebate opportunities change is consistent with the Act. Eduardo A. Aleman,
available at other venues to be more Comments may be submitted by any of Assistant Secretary.
favorable. In such an environment, the the following methods: [FR Doc. 2018–16023 Filed 7–26–18; 8:45 am]
Exchange must continually adjust its
BILLING CODE 8011–01–P
fees and rebates to remain competitive 15 15 U.S.C. 78s(b)(3)(A).
16 17 CFR 240.19b–4(f)(2).
14 15 18 17 CFR 200.30–3(a)(12).
U.S.C. 78f(b)(8). 17 15 U.S.C. 78s(b)(2)(B).
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Document Created: 2018-07-27 04:05:26
Document Modified: 2018-07-27 04:05:26
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 83 FR 35696 |
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