Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Notices 84053 

27 15 U.S.C. 78q–1(b)(3)(F). 

28 15 U.S.C. 78s(b)(2). 

29 In approving this Proposed Rule Change, the 

Commission has considered the proposed rules’ 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

30 15 U.S.C. 78s(b)(2). 

31 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Exchange Act Release No. 90227 (Oct. 20, 2020), 

85 FR 67794 (Oct. 26, 2020) (File No. SR–FINRA– 

2020–035 (‘‘Notice’’). 

4Letter from the Steven B. Caruso, Maddox 

Hargett Caruso, P.C., dated October 20, 2020 

(‘‘Caruso Letter’’), available at https://www.sec.gov/ 

comments/sr-finra-2020-035/srfinra2020035- 

7927147-224628.htm. 

5See letter from Mignon McLemore, Assistant 

General Counsel, Office of General Counsel, FINRA, 

to Lourdes Gonzalez, Assistant Chief Counsel, 

Division of Trading and Markets, Commission, 

dated December 9, 2020. 

6A ‘‘hearing session’’ is any meeting between the 

parties and arbitrator(s) of four hours or less, 

including a hearing or a prehearing conference. See 

FINRA Rules 12100(p) and 13100(p). 

7For example, during a typical arbitration, the 

Chair oversees the discovery process, conducts the 

initial prehearing conference (‘‘IPHC’’) and 

subsequent prehearing conferences as needed, 

drafts rulings and orders, and manages efficient 

hearings. See Notice at note 4. 

8See FINRA Rule 12214(a)(2). The term 

‘‘hearing’’ means the hearing on the merits of an 

arbitration under FINRA Rules 12600 and 13600. 

See FINRA Rules 12100(o) and 13100(o). 

9A typical day has two hearing sessions. See 

Notice at note 3. 

10See FINRA Rules 12500(c) and 13500(c). 

improves the efficiency of the filing 

process by obviating the need for OCC 

to propose another change to its rules to 

resolve the error in the future while not 

changing the purpose of or basis for the 

Proposed Rule Change. Updating the list 

of vendor agreements as part of the 

immediate proposal would similarly 

reduce the need for future filings 

without changing the purpose of or 

basis for the Proposed Rule Change. 

For similar reasons as discussed 

above, the Commission finds that Partial 

Amendment No. 1 is consistent with the 

requirement that OCC’s rules be 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions and assure the 

safeguarding of securities and funds 

which are in the custody or control of 

the clearing agency or for which it is 

responsible under Section 17A(b)(3)(F) 

of the Exchange Act.27 Accordingly, the 

Commission finds good cause for 

approving the proposed rule change, as 

modified by Partial Amendment No. 1, 

on an accelerated basis, pursuant to 

Section 19(b)(2) of the Exchange Act.28

VI. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Exchange Act, and 

in particular, the requirements of 

Section 17A of the Exchange Act 29 and 

the rules and regulations thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,30

that the Proposed Rule Change (SR– 

OCC–2020–013), as modified by Partial 

Amendment No. 1, be, and hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28317 Filed 12–22–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90705; File No. SR–FINRA– 

2020–035] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change To Amend the 

FINRA Codes of Arbitration Procedure 

To Increase Arbitrator Chairperson 

Honoraria and Certain Arbitration Fees 

December 17, 2020. 

I. Introduction 

On October 16, 2020, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend the Code of Arbitration 

Procedure for Customer Disputes 

(‘‘Customer Code’’) and the Code of 

Arbitration Procedure for Industry 

Disputes (‘‘Industry Code’’) (together, 

‘‘Codes’’) to increase arbitrator 

chairperson (‘‘Chair’’) honoraria. 

Specifically, the proposed rule change 

would: (1) Increase the additional 

hearing day honorarium Chairs receive 

for each hearing on the merits from $125 

to $250 and (2) create a new $125 Chair 

honorarium for each prehearing 

conference in which the Chair 

participates. Under the proposed rule 

change, these increases would be 

funded primarily by certain increases to 

the member surcharge and process fees 

for claims of more than $250,000 or 

claims for non-monetary or unspecified 

damages. The proposed rule change 

would also increase filing fees and 

hearing session fees for customers, 

associated persons and members 

bringing claims of more than $500,000 

or claims for non-monetary or 

unspecified damage. 

The proposed rule change was 

published for comment in the Federal 

Register on October 26, 2020.3 The 

public comment period closed on 

November 16, 2020. The Commission 

received one comment letter in response 

to the Notice.4 On December 9, 2020, 

FINRA consented to an extension of the 

time period in which the Commission 

must approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to approve or disapprove the 

proposed rule change to December 31, 

2020.5 This order approves the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

FINRA makes arbitrator honoraria 

payments to its arbitrators for the 

services they provide to FINRA’s 

dispute resolution forum. Currently, 

under FINRA Rule 12214(a)(1), 

arbitrators receive $300 for each hearing 

session in which the arbitrator 

participates.6 In recognition of their 

increased experience and the extra 

responsibilities they must perform 

during an arbitration,7 Chairs currently 

receive an additional $125 for serving as 

Chair during a hearing (‘‘hearing day 

honorarium’’).8 The Chair receives the 

additional honorarium for each hearing 

day, regardless of the number of hearing 

sessions held per day.9 Currently, 

Chairs do not receive an additional 

honorarium for prehearing conferences, 

which they are required to lead and for 

which they are required to perform 

additional tasks, such as setting 

discovery, briefing, and motion 

deadlines, scheduling subsequent 

hearing sessions, and drafting 

prehearing orders.10

A. Proposed Increases to Arbitrator 

Chair Honoraria 

The proposed rule change would 

amend FINRA Rules 12214 and 13214 to 

increase the arbitrator Chair honoraria. 

Specifically, the proposed rule change 

would increase the hearing day 

honorarium from $125 to $250 to better 

compensate the Chair for the additional 

training and responsibilities required of 

the position. In addition, the proposed 

rule change would establish a new 


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84054 Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Notices 

11See FINRA Rules 12500(a) and 13500(a). 

12See Notice at 67796. The member surcharge is 

the responsibility of the member party and cannot 

be allocated to any other party (‘‘non-allocable’’). 

See FINRA Rules 12901(a)(6) and 13901(f). 

13See Notice at 67796. 

14 Id. 

15 Id. 

16See FINRA Rules 12900(a)(1) and 13900(a)(1). 

17See Notice at 67797. 

honorarium to pay a Chair an additional 

$125 for each prehearing conference in 

which he or she participates. Under the 

proposed rule change, Chairs would 

receive the additional prehearing 

conference compensation even if an 

arbitration case closes without a 

hearing. For example, if the Chair 

participates in a prehearing 

conference,11 but the parties settle the 

case, the Chair would still receive some 

compensation for serving as Chair. 

B. Proposed Increases to Arbitration 

Fees 

To fund increases in the arbitrator 

Chair honoraria, the proposed rule 

change would also increase the member 

surcharge, member process fees, filing 

fees, and hearing session fees that the 

forum assesses the parties during the 

course of an arbitration case. 

1. Proposed Increases to Member 

Surcharge 

Under FINRA Rules 12901 and 13901, 

FINRA assesses a surcharge against each 

member that: (1) Files a claim, 

counterclaim, cross claim, or third party 

claim under the Codes; (2) is named as 

a respondent in a claim, counterclaim, 

cross claim, or third party claim filed 

and served under the Codes; or (3) 

employed, at the time the dispute arose, 

an associated person who is named as 

a respondent in a claim, counterclaim, 

cross claim, or third party claim filed 

and served under the Codes. Member 

surcharges are intended to allocate the 

costs of administering the arbitration 

case to the firms that are involved in 

those cases.12 Because the cost of 

administering an arbitration case 

generally is proportional to the 

aggregate claim amount,13 the member 

surcharge increases with the size of the 

claim amount.14 Proposed FINRA Rules 

12901 and 13901 would increase the 

member surcharge for claims of more 

than $250,000 and claims for nonmonetary or unspecified damages. Table 

1 illustrates the proposed dollar and 

percentage changes for each tier.15

MEMBER SURCHARGE SCHEDULE—TABLE 1 

Amount of claim 

(exclusive of interest and expenses) 

Current 

surcharge Proposed fee Change 

Percentage 

change 

(%) 

$.01 to $5,000 .................................................................................................. $150 $150 $0 0 

$5,000.01–$10,000 .......................................................................................... 325 325 0 0 

$10,000.01–$25,000 ........................................................................................ 450 450 0 0 

$25,000.01–$50,000 ........................................................................................ 750 750 0 0 

$50,000.01–$100,000 ...................................................................................... 1,100 1,100 0 0 

$100,000.01–$250,000 .................................................................................... 1,700 1,700 0 0 

$250,000.01–$500,000 .................................................................................... 1,900 2,025 125 7 

$500,000.01–$1,000,000 ................................................................................. 2,475 2,625 150 6 

$1,000,000.01–$5,000,000 .............................................................................. 3,025 3,200 175 6 

$5,000,000.01–$10,000,000 ............................................................................ 3,600 3,850 250 7 

Over $10,000,000 ............................................................................................ 4,025 4,325 300 7 

Non-Monetary/Not Specified ............................................................................ 1,900 2,000 100 5 

2. Proposed Increases to Filing Fee 

Under FINRA Rules 12900(a)(1) and 

13900(a)(1), if a customer, associated 

person or other non-member files a 

claim, counterclaim, cross claim, or 

third party claim, they must pay a filing 

fee to initiate an arbitration. As with 

member surcharges, the filing fee is 

based on the claim amount or type of 

damages requested.16 The proposed rule 

change would amend FINRA Rules 

12900 and 13900 to increase the filing 

fees for customers, associated persons or 

other non-members bringing claims of 

more than $500,000 and claims for nonmonetary or unspecified damages. Table 

2 shows the proposed dollar and 

percentage changes.17

FILING FEES FOR CUSTOMERS, ASSOCIATED PERSONS OR OTHER NON-MEMBER CLAIMANTS—TABLE 2 

Amount of claim 

(exclusive of interest and expenses) 

Current claim 

filing fee 

Proposed 

claim filing fee Change 

Percentage 

change 

(%) 

$.01 to $1,000 .................................................................................................. $50 $50 $0 0 

$1,000.01–$2,500 ............................................................................................ 75 75 0 0 

$2,500.01–$5,000 ............................................................................................ 175 175 0 0 

$5,000.01–$10,000 .......................................................................................... 325 325 0 0 

$10,000.01–$25,000 ........................................................................................ 425 425 0 0 

$25,000.01–$50,000 ........................................................................................ 600 600 0 0 

$50,000.01–$100,000 ...................................................................................... 975 975 0 0 

$100,000.01–$500,000 .................................................................................... 1,425 1,425 0 0 

$500,000.01–$1,000,000 ................................................................................. 1,725 1,740 15 1 

$1,000,000.01–$5,000,000 .............................................................................. 2,000 2,025 25 1 

Over $5,000,000 .............................................................................................. 2,250 2,300 50 2 

Non-Monetary/Not Specified ............................................................................ 1,575 1,600 25 2 


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18 Id. 

19Like the member surcharge, the process fee is 

non-allocable to other parties to the arbitration. See 

FINRA Rules 12903(d) and 13903(d). See also 

FINRA Rules 12701(b) and 13701(b). 

20See Notice at 67797. 21See supra note 8. 22The term ‘‘panel’’ means the arbitration panel, 

whether it consists of one or more arbitrators. See 

FINRA Rules 12100(u) and 13100(s). 

23See FINRA Rules 12902(a)(1) and 13902(a)(1). 

24See Notice at 67798. 

The proposed rule change would also 

amend FINRA Rules 12900(b) and 

13900(b) to increase the filing fees that 

members pay for claims of more than 

$500,000 and claims for non-monetary 

or unspecified damages. Table 3 shows 

the proposed dollar and percentage 

changes.18

FILING FEES FOR MEMBER CLAIMANT—TABLE 3 

Amount of claim 

(exclusive of interest and expenses) 

Current claim 

filing fee 

Proposed 

claim filing fee Change 

Percentage 

change 

(%) 

$.01 to $1,000 .................................................................................................. $225 $225 $0 0 

$1,000.01–$2,500 ............................................................................................ 350 350 0 0 

$2,500.01–$5,000 ............................................................................................ 525 525 0 0 

$5,000.01–$10,000 .......................................................................................... 750 750 0 0 

$10,000.01–$25,000 ........................................................................................ 1,050 1,050 0 0 

$25,000.01–$50,000 ........................................................................................ 1,450 1,450 0 0 

$50,000.01–$100,000 ...................................................................................... 1,750 1,750 0 0 

$100,000.01–$500,000 .................................................................................... 2,125 2,125 0 0 

$500,000.01–$1,000,000 ................................................................................. 2,550 2,650 100 4 

$1,000,000.01–$5,000,000 .............................................................................. 3,400 3,550 150 4 

Over $5,000,000 .............................................................................................. 4,000 4,200 200 5 

Non-Monetary/Not Specified ............................................................................ 1,700 1,800 100 6 

3. Proposed Increases to Process Fee 

Under FINRA Rules 12903 and 13903, 

each member that is a party to an 

arbitration or employed an associated 

person who is a party to an arbitration 

in which the claim amount is more than 

$25,000 must pay a process fee based on 

the amount of the claim.19 The proposed 

rule change would amend FINRA Rules 

12903 and 13903 to increase the 

member process fees for claim amounts 

larger than $250,000 and for claims for 

non-monetary or unspecified damages. 

Table 4 illustrates the proposed dollar 

and percentage changes.20

MEMBER PROCESS FEE SCHEDULE—TABLE 4 

Amount of claim 

(exclusive of interest and expenses) 

Current 

process fee Proposed fee Change 

Percentage 

change 

(%) 

$.01–$25,000 ................................................................................................... $0 $0 $0 0 

$25,000.01–$50,000 ........................................................................................ 1,750 0 0 0 

$50,000.01–$100,000 ...................................................................................... 2,250 0 0 0 

$100,000.01–$250,000 .................................................................................... 3,250 0 0 0 

$250,000.01–$500,000 .................................................................................... 3,750 3,875 125 3 

$500,000.01–$1,000,000 ................................................................................. 5,075 5,225 150 3 

$1,000,000.01–$5,000,000 .............................................................................. 6,175 6,375 200 3 

$5,000,000.01–$10,000,000 ............................................................................ 6,800 7,050 250 4 

Over $10,000,000 ............................................................................................ 7,000 7,300 300 4 

Non-Monetary/Not Specified ............................................................................ 3,750 3,850 100 3 

4. Proposed Increases to Hearing 

Session Fee 

Under FINRA Rules 12902(a) and 

13902(a), FINRA assesses hearing 

session fees against the parties for each 

hearing and pre-hearing session 

conducted by a panel.21 In the award, 

the panel determines the amount of the 

hearing session fees that each party is 

required to pay.22 The arbitrators may 

apportion the fees in any manner, 

including assessing the entire amount 

against one party.23 The proposed rule 

change would amend FINRA Rules 

12902 and 13902 to increase the fees for 

claims of more than $500,000 and for 

claims for non-monetary or unspecified 

damages. There are different hearing 

session fees for hearings with one 

arbitrator versus hearings with three 

arbitrators. Under the proposed rule 

change, the fees would not change for 

hearings with one arbitrator. Table 5 

illustrates the proposed dollar and 

percentage changes.24

HEARING SESSION FEES FOR SESSION WITH THREE ARBITRATORS—TABLE 5 

Amount of claim 

(exclusive of interest and expenses) 

Current fee for 

session w/ 

three 

arbitrators 

Proposed fee 

for session w/ 

three 

arbitrators 

Change 

Percentage 

change 

(%) 

Up to $2,500 .................................................................................................... NA NA NA NA 

$2,500.01–$5,000 ............................................................................................ NA NA NA NA 


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84056 Federal Register / Vol. 85, No. 247 / Wednesday, December 23, 2020 / Notices 

25 In approving this rule change, the Commission 

has considered the rule’s impact on efficiency, 

competition, and capital formation. See 15 U.S.C. 

78c(f). 26 15 U.S.C. 78o–3(b)(6). 27 15 U.S.C. 78o–3(b)(5). 

28See Notice at 67795. 

29 Id. 

30See Notice at 67799. 

31Caruso Letter. 

32 Id. (stating that the proposed $125 Chair 

honorarium for each prehearing conference in 

which the Chair participates would compensate 

Chairs who do not currently receive an additional 

honorarium for prehearing conferences, even 

though Chairs are required to lead the prehearing 

conferences and perform additional tasks in 

connection with the prehearing conferences, such 

as setting discovery, briefing, and motion deadlines, 

scheduling subsequent hearing sessions, drafting 

prehearing orders, and rendering decisions on 

discovery and other case-related motions). 

33To qualify as a Chair, an arbitrator must 

complete Chair training and have served on at least 

three arbitrations through award in which hearings 

were held, or be a lawyer who served on at least 

one arbitration through award in which hearings 

were held. See FINRA Rules 12400(c) and 13400(c); 

see also supra note 10 and accompanying text. 

34From 2014 through 2019, FINRA paid the 

hearing day honorarium on an average of 2,569 

times per year. In order to fund the proposed 

hearing day honorarium increase from $125 to 

$250, FINRA would need to raise revenue by 

approximately $368,000 annually. See Notice at 

note 12. From 2014 through 2019, FINRA 

conducted an average of 4,954 prehearing 

conferences per year. In order to pay the proposed 

additional Chair prehearing honorarium of $125, 

FINRA would need to raise revenue by 

approximately $724,000 annually. See Notice at 

note 15. 

HEARING SESSION FEES FOR SESSION WITH THREE ARBITRATORS—TABLE 5—Continued 

Amount of claim 

(exclusive of interest and expenses) 

Current fee for 

session w/ 

three 

arbitrators 

Proposed fee 

for session w/ 

three 

arbitrators 

Change 

Percentage 

change 

(%) 

$5,000.01–$10,000 .......................................................................................... NA NA NA NA 

$10,000.01–$25,000 ........................................................................................ NA NA NA NA 

$25,000.01–$50,000 ........................................................................................ $600 $600 $0 0 

$50,000.01–$100,000 ...................................................................................... 750 750 0 0 

$100,000.01–$500,000 .................................................................................... 1,125 1,125 0 0 

$500,000.01–$1,000,000 ................................................................................. 1,300 1,325 25 2 

$1,000,000.01–$5,000,000 .............................................................................. 1,400 1,435 35 3 

Over $5,000,000 .............................................................................................. 1,500 1,575 75 5 

Non-Monetary/Not Specified ............................................................................ 1,125 1,150 25 2 

C. Technical Changes 

The proposed rule change would 

amend FINRA Rules 12901 and 13901 to 

make the formatting more consistent in 

the fee schedules. In addition, the 

proposed rule change would amend 

FINRA Rule 12900(c)(3) to change the 

cross-reference in the rule from Rule 

12202(c) to Rule 12202. 

III. Discussion and Commission 

Findings 

After careful review of the proposed 

rule change and the comment letter, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Exchange Act and 

the rules and regulations thereunder 

that are applicable to a national 

securities association.25 Specifically, the 

Commission finds that the proposed 

rule change is consistent with Section 

15A(b)(6) of the Exchange Act,26 which 

requires, among other things, that 

FINRA rules be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, and, in general, to 

protect investors and the public interest, 

and Section 15A(b)(5) of the Exchange 

Act,27 which requires, among other 

things, that FINRA rules provide for the 

equitable allocation of reasonable dues, 

fees and other charges among members 

and issuers and other persons using any 

facility or system that FINRA operates 

or controls. 

A. Protection of Investors and the Public 

Interest 

FINRA’s proposed rule change aims to 

address concerns related to recruiting 

and retaining arbitrators for its forum 

roster, including increasing the 

probability that local public Chairs 

would be proposed for selection. FINRA 

stated that Chair-eligible arbitrators 

have indicated that they are not 

interested in completing the required 

Chair training and serving on the Chair 

roster because of the extra work 

required compared to the modest, 

additional Chair honorarium currently 

offered.28 And forum users have 

expressed concern with empaneling 

non-local public arbitrators to Chair 

their proceedings.29 FINRA believes that 

increasing the current per-day Chair 

honorarium for hearings on the merits 

and establishing a Chair honorarium for 

prehearing conferences would provide 

more of an incentive for eligible 

arbitrators to become Chairs and to more 

adequately compensate Chairs for their 

additional work.30 The commenter 

agrees with FINRA, stating that 

increasing the additional hearing day 

honorarium that Chairs receive for each 

hearing on the merits, would ‘‘provide 

more of an incentive for both new and 

experienced arbitrators to become 

Chairs, would increase the number of 

arbitrators on the Chair roster and will 

serve to reduce the number of non-local 

Chair arbitrators all of which will 

expand the quality and depth of the 

arbitrator roster which is a critical 

component for protecting investors and 

the public interest.’’ 31 The commenter 

also believes that the proposal rule 

change would ‘‘more adequately 

compensate Chairs for their additional 

work.’’ 32

The Commission acknowledges 

FINRA’s concern that fewer Chaireligible arbitrators may be taking on the 

additional burdens of being on the Chair 

roster due to insufficient compensation. 

The Commission believes that 

increasing the amount that FINRA 

compensates its Chair-eligible 

arbitrators may incentivize them to take 

on the additional training and 

responsibilities associated with the 

position.33 Consequently, FINRA may 

be able to recruit new, and retain 

current, Chairs for its roster, potentially 

alleviating the shortage of Chairs in 

certain locations and the concomitant 

negative impact (e.g., dissatisfied parties 

and scheduling delays). 

B. Equitable Allocation of Reasonable 

Fees 

FINRA stated that the proposed 

increases to Chair honoraria would 

increase its expenses for operating the 

forum by approximately $1.1 million.34

To offset these expenses, the proposed 

rule change would increase fees charged 

to parties for using its arbitration forum. 

In particular, the proposed rule change 

would increase the member surcharge, 

member process fees, filing fees, and 

hearing session fees. As illustrated 

above, FINRA would increase the 

member surcharge and process fees for 

claims of more than $250,000 or claims 


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35See Notice at 67799; see also Notice at note 9 

(stating that the FINRA Dispute Resolution Task 

Force suggested raising arbitration fees to fund 

arbitrator honoraria increases consistent with the 

current arbitration fee structure, which assigns a 

majority of the costs of the forum to firms through 

the member surcharge and process fees). 

36See Notice at 67796. 

37See Table 2 (Filing Fees for Customers, 

Associated Persons or Other Non-Member 

Claimants) supra; see also Notice at 67797. 

38See Table 5 (Hearing Session Fees for Session 

with Three Arbitrators) supra; see also Notice at 

67798. 

39See Table 4 (Member Process Fee Schedule) 

supra; see also Notice at 67797. 

40See Table 3 (Filing Fees for Member Claimant) 

supra; see also Notice at 67797. 

41See Notice at 67794. 

42See Caruso Letter. 

43See Notice at 67801. 

44 15 U.S.C. 78s(b)(2). 

45 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78a. 

2 17 CFR 240.19b–4. 

3Unless otherwise specified, capitalized terms 

used in this rule filing are defined as set forth in 

the Compliance Rule. 

4See Securities Exchange Act Rel. No. 90223 

(October 19, 2020), 85 FR 67576 (October 23, 2020) 

(‘‘Allocation Exemptive Order’’). 

for non-monetary or unspecified 

damages. The proposed rule change 

would also increase filing fees and 

hearing session fees for customers, 

associated persons and members 

bringing claims of more than $500,000 

or claims for non-monetary or 

unspecified damages. FINRA believes 

the proposed rule change appropriately 

allocates the proposed fee increases 

among users of the forum by allocating 

the increases among high claim amounts 

and continuing its policy that the costs 

of the forum are borne 85 percent by 

members and 15 percent by 

customers.35

FINRA also believes the amount of the 

fee increases are reasonable. FINRA 

believes that the proposed fee increases 

would generate sufficient revenue to 

offset the proposed increases in the 

arbitrator Chair honoraria without 

placing an undue burden on users of the 

forum, particularly customers and 

claimants with small claims.36 For 

example, the filing fee increases for nonmember claimants will range from $15 

to $50 (1%–2% increase); 37 the hearing 

session fee increases will range from 

$25 to $75 (2%–5% increase); 38 the 

increases to the member surcharge will 

range from $100 to $300 (3%–4% 

increase); 39 and the filing fee increases 

for member claimants will range from 

$100 to $200 (4%–6% increase).40

FINRA believes these represent 

‘‘minimal’’ increases.41 Similarly, the 

commenter believes that increasing the 

filing fees and hearing session fees for 

customers, associated persons, and 

members bringing claims of more than 

$500,000 or claims for non-monetary or 

unspecified damages, is a fair, equitable 

and reasonable allocation of the costs 

among people using the forum that will 

be associated with the implementation 

of the proposed rule amendments.42

The Commission believes that 

increasing the amount of honoraria paid 

to arbitrators who chair hearings and 

pre-hearing conferences in the FINRA 

forum as proposed here would help 

improve the arbitration process for its 

users. To offset the costs of this 

improvement, FINRA designed the 

arbitration fee structure to distribute 

much of the increased costs of the forum 

to member firms that are parties to an 

arbitration proceeding and to parties 

associated with large claims or nonmonetary or unspecified claims. The 

Commission believes that this proposed 

distribution of fees will help keep the 

FINRA arbitration forum accessible. 

Otherwise, the Commission believes 

that increasing fees on claimants with 

small claims could discourage retail 

investors from bringing their claims.43

Accordingly, the proposed allocation of 

the fee increases will help ensure that 

FINRA’s arbitration forum remains 

accessible and affordable to parties. 

As stated above, the filing fee 

increases for non-member claimants 

will range from $15 to $50; the hearing 

session fee increases will range from 

$25 to $75; the increases to the member 

surcharge will range from $100 to $300; 

and the filing fee increases for member 

claimants range from $100 to $200. 

Because these increases would only 

apply to claims over $250,000 and, in 

some instances, over $500,000, they 

represent a small percentage of effected 

claims (collectively, 1%–6%). 

The Commission believes that the 

proposed rule change is consistent with 

the Exchange Act. In particular, the 

Commission believes that the proposed 

rule change is appropriate and designed 

to protect investors and the public 

interest, consistent with Section 

15A(b)(6) of the Exchange Act. 

Specifically, the Commission believes 

that the proposed increase to the 

hearing day Chair honorarium and the 

addition of a Chair honorarium for 

prehearing conferences are in the public 

interest because they would help 

improve the arbitration process for its 

users, including retail investors. 

Moreover, the Commission believes that 

the proposed fee increases represent an 

equitable allocation of reasonable dues, 

fees and other charges among members 

and issuers and other persons using any 

facility, consistent with Section 

15A(b)(5). For these reasons, the 

Commission finds that the proposed 

rule change is consistent with the 

Exchange Act and the rules and 

regulations thereunder. 

IV. Conclusion 

It is therefore ordered pursuant to 

Section 19(b)(2) of the Exchange Act 44

that the proposal (SR–FINRA–2020– 

035), be and hereby is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.45

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28310 Filed 12–22–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90707; File No. SR– 

NYSENAT–2020–37] 

Self-Regulatory Organizations; NYSE 

National, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Rule 

6.6800 Series 

December 17, 2020. 

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 December 

4, 2020, NYSE National, Inc. (‘‘NYSE 

National’’ or the ‘‘Exchange’’) 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 selfregulatory 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 

The Exchange proposes to amend the 

Rule 6.6800 Series, the Exchange’s 

compliance rule (‘‘Compliance Rule’’) 

regarding the National Market System 

Plan Governing the Consolidated Audit 

Trail (the ‘‘CAT NMS Plan’’ or ‘‘Plan’’) 3

to be consistent with a conditional 

exemption granted by the Commission 

from certain allocation reporting 

requirements set forth in Sections 

6.4(d)(ii)(A)(1) and (2) of the CAT NMS 

Plan (‘‘Allocation Exemption’’).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. 


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