[Federal Register Volume 78, Number 8 (Friday, January 11, 2013)]
[Notices]
[Pages 2465-2467]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-00353]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68589; File No. SR-NYSEMKT-2012-89]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Amending the NYSE Amex
Options Fee Schedule With Respect to Regulatory Fees Related to the
Central Registration Depository, Which Are Collected by the Financial
Industry Regulatory Authority, Inc.
January 4, 2013.
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 21, 2012, NYSE MKT LLC (the ``Exchange'' or
``NYSE MKT'') 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
The Exchange proposes to amend the NYSE Amex Options Fee Schedule
(the ``Fee Schedule'') with respect to regulatory fees related to the
Central Registration Depository (``CRD system''), which are collected
by the Financial Industry Regulatory Authority, Inc. (``FINRA''). The
Exchange proposes to implement the fee changes on January 2, 2013. The
text of the proposed rule change is available on the Exchange's Web
site at www.nyse.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 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
regulatory fees related to the CRD system, which are collected by
FINRA.\4\ The Exchange proposes to implement the fee changes on January
2, 2013.
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\4\ 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.
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Certain of the regulatory fees provided in the Fee Schedule are
collected and retained by FINRA via the CRD system for the registration
of associated persons of ATP Holders that are not FINRA members (``Non-
FINRA ATP Holders''). The Exchange originally adopted fees for use of
the CRD system in 2003.\5\ FINRA recently amended certain of the fees
assessed for use of the CRD system, and those amendments will become
effective January 2, 2013.\6\
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\5\ See Securities Exchange Act Release No. 48066 (June 19,
2003), 68 FR 38409 (June 27, 2003) (SR-Amex-2003-49).
\6\ See Securities Exchange Act Release No. 67247 (June 25,
2012), 77 FR 38866 (June 29, 2012) (SR-FINRA-2012-030).
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The CRD system 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
ATP Holder. Accordingly, the Exchange is proposing to amend the fees in
the Fee Schedule to mirror those assessed by FINRA, which will be
implemented concurrently with the amended FINRA fees on January 2,
2013.\7\ The proposed changes are as follows: \8\
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\7\ The Exchange notes that it has only adopted the CRD system
fees charged by FINRA to Non-FINRA ATP 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
Amex Options-only ATP Holders.
\8\ The Exchange is proposing to delete the current fees and
descriptions in their entirety and replace them with the updated
fees and descriptions in a separate table that will include all the
fees applicable to Non-FINRA ATP Holders, as discussed further below
(corresponding footnotes in the Fee Schedule would also be
designated as ``reserved''). In this regard, the Exchange is
proposing a new subheading in the ``Regulatory Fees'' section of the
Fee Schedule to differentiate between those fees that are applicable
to all ATP Holders and those fees that are applicable only to Non-
FINRA ATP Holders. The Exchange notes that ATP Holders 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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[[Page 2466]]
Increasing the disclosure processing fee from $95 to $110;
\9\ and
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\9\ See Section (4)(b)(3) of Schedule A to the FINRA By-laws
effective on January 2, 2013. The updated description in the Fee
Schedule for this fee would be ``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.'' As noted below, this would
incorporate the applicability of the fee to Form BD processing.
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Increasing the manual fingerprint processing fee from $13
to $30.\10\
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\10\ See Section (4)(b)(6) of Schedule A to the FINRA By-laws
effective on January 2, 2013. The updated description in the Fee
Schedule for this fee would be ``processing and posting to the CRD
system each set of fingerprint results and identifying information
that have been processed through another self-regulatory
organization and submitted to FINRA.'' The Exchange also proposes to
permanently remove the current $35 fee in the Fee Schedule for
fingerprint processing. The fee for fingerprint processing by FINRA
is addressed via the other fingerprint processing fees described
herein and in the proposed changes to the Fee Schedule.
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In addition to increasing the existing CRD system fees, FINRA
adopted a new fee for the additional processing of each initial or
amended Form BD that includes the initial reporting, amendment, or
certification of one or more disclosure events or proceedings.\11\
Broker-dealers use Form BD to, among other things, report disclosure
matters in which they or a control affiliate have been involved. Prior
to the adoption of the new fee, FINRA did not have a fee designed to
cover the costs associated with the review of Form BD, notwithstanding
that the review is similar to that performed of broker-dealers' Forms
U4 and U5. Such reviews include confirming that the matter is properly
reported, reviewing any documentation submitted and determining whether
additional documentation is required, conducting any necessary
independent research and, depending on the matter reported, analyzing
whether the event or proceeding subjects the individual or firm to a
statutory disqualification pursuant to Section 3(a)(39) of the Act.\12\
FINRA adopted a $110 fee for the review of a Form BD, which mirrors the
increased fee adopted for the review of Forms U4 and U5. As such, the
Exchange is adopting the identical fee for FINRA's review of a Form BD
submitted by Non-FINRA ATP Holders.\13\
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\11\ See Section (4)(b)(3) of Schedule A to the FINRA By-laws
effective on January 2, 2013.
\12\ 15 U.S.C. 78c(a)(39).
\13\ See supra note 9.
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The Exchange also proposes to include in its Fee Schedule certain
other fees that are charged by FINRA to FINRA members as well as Non-
FINRA ATP Holders. These fees are as follows: \14\
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\14\ Non-FINRA ATP Holders have been charged CRD system fees
since 2003. See supra note 5.
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$100 for each initial Form U4 filed for the registration
of a representative or principal; \15\
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\15\ See Section (4)(b)(1) of Schedule A to the FINRA By-laws
effective on January 2, 2013. This fee is assessed when a Non-FINRA
ATP Holder submits its first Initial, Transfer, Relicense, or Dual
Registration Form U4 filing on behalf of a registered person. The
current applicable fee is $85.
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$15 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; \16\
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\16\ See Section (4)(b)(4) of Schedule A to the FINRA By-laws
effective on January 2, 2013. The current applicable fee is $13.
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$30 for processing and posting to the CRD system each set
of fingerprint cards submitted in non-electronic format to FINRA, plus
any other charge that may be imposed by the U.S. Department of Justice
for processing each set of fingerprints; \17\ and
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\17\ See Section (4)(b)(5) of Schedule A to the FINRA By-laws
effective on January 2, 2013. The current applicable fee is $13.
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$45 annually for system processing for each registered
representative and principal.\18\
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\18\ See Section (4)(b)(7) of Schedule A to the FINRA By-laws
effective on January 2, 2013. The current applicable fee is $30. The
proposed system processing fee would become effective for the 2013
Renewal Program. In this regard, as part of FINRA's 2013 Renewal
Program, Preliminary Renewal Statements reflecting the proposed $45
system processing fee will be made available in the fourth quarter
of 2012.
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The Exchange notes that the proposed change is not otherwise
intended to address any other issues surrounding regulatory fees and
that the Exchange is not aware of any problems that ATP 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,\19\ in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\20\ 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.
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\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the change is reasonable because the
proposed fees are identical to those adopted by FINRA for use of the
CRD system for disclosure and the registration of FINRA members and
their associated persons. As FINRA noted in amending its fees, it
believed that the fees are reasonable based on the increased costs
associated with operating and maintaining the CRD system, and listed a
number of enhancements made 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; and
(4) increases in the number and types of reports available through the
CRD system. These increased costs are similarly borne by FINRA when a
Non-FINRA ATP Holder uses the CRD system. 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
very important because the Securities and Exchange Commission
(``Commission''), FINRA, other self-regulatory organizations and state
securities regulators use the CRD system to make licensing and
registration decisions, among other things.
The Exchange also believes that the change is reasonable because it
will provide greater specificity regarding the CRD system fees that are
applicable to Non-FINRA ATP Holders. All similarly situated ATP Holders
are subject to the same fee structure, and every ATP 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 proposed change, like FINRA's proposal,
is equitable and not unfairly discriminatory because it will result in
the same regulatory fees being charged to all ATP Holders required to
report information to the CRD system and for services performed by
FINRA, regardless of whether or not such ATP Holders are FINRA members.
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 that is not necessary or appropriate
in furtherance of the purposes of the Act. Specifically, the Exchange
believes that the proposed change will result in the same regulatory
fees being charged to all ATP Holders required to report information to
the CRD system and for services performed by FINRA, regardless of
[[Page 2467]]
whether or not such ATP Holders are FINRA members.
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) \21\ of the Act and subparagraph (f)(2) of Rule
19b-4 \22\ thereunder, because it establishes a due, fee, or other
charge imposed by NYSE MKT.
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\21\ 15 U.S.C. 78s(b)(3)(A).
\22\ 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.
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-NYSEMKT-2012-89 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEMKT-2012-89. 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 Web site (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 Web site 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 such filing also will be available
for inspection and copying at NYSE's principal office or on the Web
site at www.nyse.com. 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-NYSEMKT-2012-89, and should be submitted on or before February 1,
2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00353 Filed 1-10-13; 8:45 am]
BILLING CODE 8011-01-P