Federal Register / Vol. 83, No. 175 / Monday, September 10, 2018 / Notices 45701 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5See Securities Exchange Act Release No. 81098 

(July 7, 2017), 82 FR 32419 (July 13, 2017) (Order 

Approving File No. SR–FINRA–2017–007). For ease 

of reference, FINRA revised the titles of some of the 

registration categories as part of SR–FINRA–2017– 

007. For instance, FINRA changed ‘‘Limited 

Representative—Investment Company and Variable 

Contracts Products’’ to ‘‘Investment Company and 

Variable Contracts Products Representative.’’ This 

proposed rule change refers to the titles that were 

approved as part of SR–FINRA–2017–007, though 

the changes are not yet effective. 

6See Regulatory Notice 17–30 (October 2017). 

Agency name Organization name Position title Request No. Date vacated 

DEPARTMENT OF THE TREASURY.Office of the Chief of Staff ............. Personal Aide to the Secretary ...... DY170073 04/07/2018 

DEPARTMENT OF TRANSPORTATION.Office of the Secretary ................... Special Assistant ............................ DT170052 04/14/2018 

Special Assistant for Scheduling 

and Advance.

DT170106 04/28/2018 

GENERAL SERVICES ADMINISTRATION.Office of Federal Acquisition Service.Executive Director .......................... GS170045 04/14/2018 

Office of Strategic Communications Associate Administrator for Strategic Communications.GS170023 04/21/2018 

Office of the Administrator ............. Senior Advisor for Technology ....... GS170021 04/21/2018 

OFFICE OF THE SECRETARY OF 

DEFENSE.

Office of Washington Headquarters 

Services.

Defense Fellow ............................... DD170125 04/14/2018 

PRESIDENTS COMMISSION ON 

WHITE HOUSE FELLOWSHIPS.

Presidents Commission on White 

House Fellowships.

Confidential Assistant ..................... WH170007 04/14/2018 

SECURITIES AND EXCHANGE 

COMMISSION.

Office of the Chairman ................... Confidential Assistant ..................... SE140003 04/05/2018 

SMALL BUSINESS ADMINISTRATION.Office of the Administrator ............. Assistant Administrator for Intergovernmental Affairs.SB170012 04/12/2018 

Office of Congressional and Legislative Affairs.Legislative Assistant ....................... SB170027 04/14/2018 

Authority: 5 U.S.C. 3301 and 3302; E.O. 

10577, 3 CFR, 1954–1958 Comp., p. 218. 

Office of Personnel Management. 

Alexys Stanley, 

Regulatory Affairs. 

[FR Doc. 2018–19495 Filed 9–7–18; 8:45 am] 

BILLING CODE 6325–39–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84020; File No. SR–FINRA– 

2018–033] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Section 4(c) of 

Schedule A to the FINRA By-Laws 

Relating to Qualification Examination 

Fees 

September 4, 2018. 

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 August 

20, 2018, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by FINRA. FINRA has 

designated the proposed rule change as 

‘‘establishing or changing a due, fee or 

other charge’’ under Section 

19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 

4(f)(2) thereunder,4 which renders the 

proposal effective upon receipt of this 

filing by the Commission. 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 

FINRA is proposing to amend Section 

4(c) of Schedule A to the FINRA ByLaws to: (1) Establish the fee for the 

Securities Industry EssentialsTM

(‘‘SIETM’’) examination; (2) revise the 

fees for the Investment Company and 

Variable Contracts Products 

Representative (Series 6), General 

Securities Representative (Series 7), 

Direct Participation Programs 

Representative (Series 22), Securities 

Trader (Series 57), Investment Banking 

Representative (Series 79), Private 

Securities Offerings Representative 

(Series 82) and Operations Professional 

(Series 99) examinations; (3) revise the 

administration and delivery fee for the 

Municipal Securities Representative 

(Series 52) examination; and (4) remove 

the Order Processing Assistant 

Representative (Series 11), United 

Kingdom Securities Representative 

(Series 17), Canada Securities 

Representative (Series 37 and Series 38), 

Options Representative (Series 42), 

Corporate Securities Representative 

(Series 62) and Government Securities 

Representative (Series 72) examinations 

and the associated fees. The proposed 

rule change relates to the restructuring 

of the FINRA representative-level 

qualification examination program. The 

proposed rule change also makes certain 

non-substantive technical changes to the 

table of fees under Section 4(c). 

The text of the proposed rule change 

is available on FINRA’s website at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. FINRA has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

In July 2017, the SEC approved a 

proposed rule change to restructure the 

FINRA representative-level qualification 

examination program.5 The rule change, 

which will become effective on October 

1, 2018,6 restructures the examination 


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7The following are the nine representative-level 

examinations: Investment Company and Variable 

Contracts Products Representative (Series 6); 

General Securities Representative (Series 7); Direct 

Participation Programs Representative (Series 22); 

Securities Trader (Series 57); Investment Banking 

Representative (Series 79); Private Securities 

Offerings Representative (Series 82); Research 

Analyst (Series 86 and Series 87); and Operations 

Professional (Series 99). See supra note 5. 

8Specifically, FINRA is eliminating the following 

examinations: Order Processing Assistant 

Representative (Series 11); United Kingdom 

Securities Representative (Series 17); Canada 

Securities Representative (Series 37 and Series 38); 

Options Representative (Series 42); Corporate 

Securities [sic] Representative (Series 62) and 

Government Securities Representative (Series 72). 

See supra note 5. Individuals maintaining the 

eliminated representative-level registrations will be 

grandfathered (i.e., they may continue to maintain 

their current registrations on or after October 1, 

2018, unless their registrations lapse). 

9See Securities Exchange Act Release No. 82578 

(January 24, 2018), 83 FR 4375 (January 30, 2018) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2018–002) (Proposed Rule 

Change Relating to the New Securities Industry 

Essentials (SIE) Examination). 

10See Securities Exchange Act Release No. 82750 

(February 21, 2018), 83 FR 8526 (February 27, 2018) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2018–004) (Proposed Rule 

Change to Revise the Investment Banking 

Representative (Series 79) Examination); Securities 

Exchange Act Release No. 82751 (February 21, 

2018), 83 FR 8559 (February 27, 2018) (Notice of 

Filing and Immediate Effectiveness of File No. SR– 

FINRA–2018–005) (Proposed Rule Change to Revise 

the Research Analyst (Series 86 and 87) 

Examinations); Securities Exchange Act Release No. 

82752 (February 21, 2018), 83 FR 8536 (February 

27, 2018) (Notice of Filing and Immediate 

Effectiveness of File No. SR–FINRA–2018–006) 

(Proposed Rule Change to Revise the Operations 

Professional (Series 99) Examination); Securities 

Exchange Act Release No. 82754 (February 21, 

2018), 83 FR 8533 (February 27, 2018) (Notice of 

Filing and Immediate Effectiveness of File No. SR– 

FINRA–2018–007) (Proposed Rule Change to Revise 

the Investment Company and Variable Contracts 

Products Representative (Series 6) Examination); 

Securities Exchange Act Release No. 82747 

(February 21, 2018), 83 FR 8524 (February 27, 2018) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2018–008) (Proposed Rule 

Change to Revise the General Securities 

Representative (Series 7) Examination); Securities 

Exchange Act Release No. 82748 (February 21, 

2018), 83 FR 8529 (February 27, 2018) (Notice of 

Filing and Immediate Effectiveness of File No. SR– 

FINRA–2018–009) (Proposed Rule Change to Revise 

the Direct Participation Programs Representative 

(Series 22) Examination); Securities Exchange Act 

Release No. 82772 (February 26, 2018), 83 FR 9039 

(March 2, 2018) (Notice of Filing and Immediate 

Effectiveness of File No. SR–FINRA–2018–010) 

(Proposed Rule Change to Revise the Securities 

Trader (Series 57) Examination); and Securities 

Exchange Act Release No. 82774 (February 26, 

2018), 83 FR 9050 (March 2, 2018) (Notice of Filing 

and Immediate Effectiveness of File No. SR– 

FINRA–2018–011) (Proposed Rule Change to Revise 

the Private Securities Offerings Representative 

(Series 82) Examination). 

11Each of the current representative-level 

examinations covers general securities knowledge, 

with the exception of the Research Analyst (Series 

86 and 87) examinations. 

12FINRA Rule 1220(b) sets forth each 

representative-level registration category and 

applicable qualification examination. 

13 Individuals who are currently, or were 

previously, registered as representatives will be 

subject to different qualification requirements 

depending on their registration status prior to 

October 1, 2018. Specifically, individuals who 

registered as representatives prior to October 1, 

2018, and who continue to maintain those 

registrations on or after October 1, 2018, will not 

be subject to any additional qualification 

requirements with respect to those registrations, 

provided their registrations do not lapse in the 

future. With the exception of individuals who were 

registered solely as Foreign Associates, individuals 

whose registration as a representative was 

terminated between October 1, 2016, and 

September 30, 2018, also will not be subject to any 

additional qualification requirements with respect 

to those registrations, provided they re-register as a 

representative within two years from the date of 

their last registration. 

In addition, with the exception of individuals 

who were registered solely as Order Processing 

Assistant Representatives or Foreign Associates, 

individuals whose registration as a representative 

was terminated between October 1, 2014, and 

September 30, 2016, will be considered to have 

passed the SIE examination, provided they reregister as a representative within four years from 

the date of their last registration. Thus, to re-register 

as a representative, such individuals would be 

required to pass the appropriate revised 

representative-level examination for their particular 

registered role, or obtain a waiver of the 

examination. Finally, individuals whose 

registration as a representative was terminated prior 

to October 1, 2014 will be required to pass both the 

SIE examination and the appropriate revised 

representative-level examination for their particular 

registered role, or obtain a waiver of the 

examinations, if they want to re-register as a 

representative on or after October 1, 2018. 

14While individuals who are not associated 

persons are eligible to take the SIE examination, 

passing the SIE examination alone will not qualify 

them for registration with FINRA. Rather, to be 

eligible for registration, an individual must also be 

associated with a firm, pass an appropriate 

qualification examination(s) for representative or 

principal and satisfy the other requirements relating 

to the registration process. Further, a passing result 

on the SIE examination would only be valid for four 

years. Therefore, an individual who passes the SIE 

examination and is not an associated person at the 

time would have up to four years from the date he 

or she passes the SIE examination to become an 

associated person of a firm and pass a 

representative-level examination, or obtain a waiver 

of the examination, and register as a representative 

without having to retake the SIE examination. 

15PROCTOR is a computer system that is 

specifically designed for the administration and 

delivery of computer-based testing and training. 

16FINRA pays its delivery vendor an hourly rate 

for seat time at test delivery centers. The seat time, 

which varies based on the length of an examination, 

includes the session time for an examination as 

well as an additional 30 minutes to cover 

program into a new format whereby all 

new representative-level applicants will 

be required to take a general knowledge 

examination (the SIE examination) and 

a tailored, specialized knowledge 

examination (a revised representativelevel qualification examination) for their 

particular registered role. As part of the 

restructuring, FINRA developed the SIE 

examination and revised nine of the 

existing representative-level 

examinations.7 FINRA is also 

eliminating seven representative-level 

examinations that have become 

outdated or have limited utility.8 In 

January 2018, FINRA filed the content 

outline and selection specifications for 

the SIE examination with the SEC.9 In 

February 2018, FINRA filed the content 

outlines and selection specifications for 

the revised representative-level 

qualification examinations with the 

SEC.10

The restructured program eliminates 

duplicative testing of general securities 

knowledge on the current 

representative-level qualification 

examinations by moving such content 

into the SIE examination.11 The SIE 

examination will test fundamental 

securities-related knowledge, including 

knowledge of basic products, the 

structure and function of the securities 

industry, the regulatory agencies and 

their functions and regulated and 

prohibited practices, whereas the 

revised representative-level 

qualification examinations will test 

knowledge relevant to day-to-day 

activities, responsibilities and job 

functions of representatives. 

A previously unregistered individual 

who is applying for registration as a 

representative,12 for the first time on or 

after October 1, 2018, will be required 

to pass both the SIE examination and 

the appropriate revised representativelevel examination for his or her 

particular registered role, or obtain a 

waiver of the examinations.13 This 

requirement also applies to applicants 

who are seeking a representative-level 

registration as a prerequisite to a 

principal-level registration. 

In addition, the SIE examination will 

be available to associated persons of 

firms who are not required to register as 

well as to individuals who are not 

associated persons of firms, including 

members of the public.14

The proposed rule change amends 

Section 4(c) of Schedule A to the FINRA 

By-Laws to establish the fee for the SIE 

examination, revise the fees for the 

representative-level examinations that 

FINRA is retaining and remove the 

representative-level examinations that 

FINRA is eliminating and the associated 

fees. 

FINRA currently administers 

examinations electronically through the 

PROCTOR system 15 at testing centers 

operated by a vendor under contract 

with FINRA. FINRA charges an 

examination fee to candidates for 

FINRA-sponsored and co-sponsored 

examinations to cover the development, 

maintenance and delivery of these 

examinations. FINRA considers the 

following factors when establishing or 

revising an examination fee: (1) Number 

of test questions; (2) seat time; 16 (3) staff 


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administrative procedures relating to the 

examination process. 

17The SIE examination and each of the revised 

representative-level examinations also include five 

to ten unscored pretest questions. Pretest questions 

are designed to ensure that new examination items 

meet acceptable testing standards prior to use. 

18The revised Series 86 and Series 87 

examinations have the same number of scored 

questions and session times as the current Series 86 

and Series 87 examinations. 

19FINRA is not proposing any changes to the fees 

for the Series 86 and Series 87 examinations as the 

test lengths for these examinations are not 

changing. 

20FINRA is currently evaluating whether the 

principal-level examinations could be restructured 

in a manner similar to the representative-level 

examinations. 

21Beginning on October 1, 2018, individuals 

registering as Research Analysts will no longer be 

required to pass the General Securities 

Representative (Series 7) examination. 

effort associated with test development 

and delivery; (4) corporate overhead; 

and (5) operational and technology costs 

associated with maintaining the 

PROCTOR system (i.e., item banking, 

test authoring and test delivery). 

The SIE examination consists of 75 

scored questions 17 and has a session 

time of one hour and 45 minutes. The 

revised representative-level 

examinations consist of fewer scored 

questions than the current examinations 

and have reduced session times, with 

the exception of the Research Analyst 

(Series 86 and Series 87) 

examinations.18 Consistent with its 

process for establishing and revising 

examination fees, FINRA is proposing to 

establish a fee of $60 for the SIE 

examination. In addition, FINRA is 

proposing to reduce the fee for each 

individual revised representative-level 

examination, with the exception of the 

revised Series 86 and Series 87 

examinations.19 Specifically, FINRA is 

proposing the following fees for the 

revised representative-level 

examinations: Series 6 ($40); Series 7 

($245); Series 22 ($40); Series 57 ($60); 

Series 79 ($245); Series 82 ($40); Series 

86 ($185); Series 87 ($130); and Series 

99 ($40). 

FINRA is creating an enrollment 

system separate from the Central 

Registration Depository (‘‘CRD®’’) 

system to allow individuals who are not 

associated persons of a firm, including 

members of the public, to enroll and pay 

the SIE examination fee. This system 

would also be available to associated 

persons of firms who are not required to 

be registered with FINRA. FINRA is not 

proposing any changes, at this time, to 

the principal-level examinations or the 

associated fees.20

The table below compares the current 

and future examination fees, number of 

scored questions on each examination 

and examination session times 

associated with each representative 

category that FINRA is retaining. 

FINRA REPRESENTATIVE-LEVEL REGISTRATIONS AND RELATED EXAMINATIONS

Registration category 

(CRD system 

designation) 

Current examination(s) fee 

[number of scored 

questions, session time] 

Future examinations fee 

[number of scored 

questions, session time] 

Investment Company 

and Variable Contracts Products 

Representative (IR).

Series 6: $100 [100 questions, two hours and 15 minutes] SIE: $60 [75 questions, one hour and 45 minutes] + Revised Series 6: $40 [50 questions, one hour and 30 minutes]; Combined Exam Fee ($100). 

General Securities 

Representative 

(GS).

Series 7: $305 [250 questions, six hours] ............................ SIE: $60 [75 questions, one hour and 45 minutes] + Revised Series 7: $245 [125 questions, three hours and 45 

minutes]; Combined Exam Fee ($305). 

Direct Participation 

Programs Representative (DR).

Series 22: $100 [100 questions, two hours and 30 minutes] SIE: $60 [75 questions, one hour and 45 minutes] + Revised Series 22: $40 [50 questions, one hour and 30 

minutes]; Combined Exam Fee ($100). 

Securities Trader 

(TD).

Series 57: $120 [125 questions, three hours and 45 minutes].SIE: $60 [75 questions, one hour and 45 minutes] + Revised Series 57: $60 [50 questions, one hour and 45 

minutes]; Combined Exam Fee ($120). 

Investment Banking 

Representative (IB).

Series 79: $305 [175 questions, five hours] ......................... SIE: $60 [75 questions, one hour and 45 minutes] + Revised Series 79: $245 [75 questions, two hours and 30 

minutes]; Combined Exam Fee ($305). 

Private Securities Offerings Representative (PR).Series 82: $95 [100 questions, two hours and 30 minutes]; SIE: $60 [75 questions, one hour and 45 minutes] + Revised Series 82: $40 [50 questions, one hour and 30 

minutes]; Combined Exam Fee ($100). 

Research Analyst 

(RS).

Series 7: $305 [250 questions, six hours] + Series 86: 

$185 [100 questions, four hours and 30 minutes] + Series 87: $130 [50 questions, one hour and 45 minutes]; 

Combined Exam Fee ($620).

SIE: $60 [75 questions, one hour and 45 minutes] + Revised Series 86: $185 [100 questions, four hours and 30 

minutes] + Revised Series 87: $130 [50 questions, one 

hour and 45 minutes]; Combined Exam Fee ($375).21

Operations Professional (OS).Series 99: $130 [100 questions, two hours and 30 minutes] SIE: $60 [75 questions, one hour and 45 minutes] + Revised Series 99: $40 [50 questions, one hour and 30 

minutes]; Combined Exam Fee ($100). 

As the table illustrates, the proposed 

examination fees for representative 

registrations will remain the same or be 

lower than the current examination fees 

for representative registrations, with the 

exception of registration as a Private 

Securities Offerings Representative. As 

noted in the table, the overall 

examination fee for registration as a 

Private Securities Offerings 

Representative will increase by $5. 

FINRA also administers and delivers 

examinations sponsored (i.e., 

developed) by other entities, including 

the Municipal Securities Rulemaking 

Board (‘‘MSRB’’). For qualification 

examinations sponsored by a FINRA 

client and administered by FINRA, 

FINRA charges an administration and 

delivery fee that represents either a 

portion of or the entire examination fee 

for the examination. The administration 

and delivery fee represents a portion of 

the entire examination fee when a 

FINRA client has established an 

additional fee for an examination that it 

sponsors. For example, the fee to take 

the Municipal Securities Representative 

(Series 52) examination is currently 

$280. Of this amount, $130 is the FINRA 

administration and delivery fee, and 


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22See MSRB Rule A–16 (Examination Fees). 

23See Securities Exchange Act Release No. 83483 

(June 20, 2018), 83 FR 29855 (June 26, 2018) (Notice 

of Filing and Immediate Effectiveness of File No. 

SR–MSRB–2018–04). The proposed rule change 

will become effective on October 1, 2018, which 

coincides with the effective date of FINRA’s rule 

change. 

24See Securities Exchange Act Release No. 83572 

(June 29, 2018), 83 FR 31580 (July 6, 2018) (Notice 

of Filing and Immediate Effectiveness of File No. 

SR–MSRB–2018–05). This proposed rule change 

will also become effective on October 1, 2018. 

25 15 U.S.C. 78o–3(b)(5). 

$150 is the development fee determined 

by the FINRA client, the MSRB.22

In conjunction with FINRA’s rule 

change to restructure its representativelevel qualification examination 

program, the MSRB filed a proposed 

rule change to, among other things, 

restructure the Series 52 examination 

program.23 Specifically, under the 

MSRB’s proposed rule change, 

individuals registering as Municipal 

Securities Representatives would be 

required to take and pass the SIE 

examination in addition to a revised 

Series 52 examination. In addition, the 

MSRB filed a proposed rule change to 

reduce the number of scored questions 

on the Series 52 examination (from 115 

questions to 75 questions) and the 

session time for the examination (from 

three hours and 30 minutes to two hours 

and 30 minutes),24 which would reduce 

the overall seat time for the examination 

and, in turn, reduce FINRA’s 

administration and delivery fee for the 

examination by $20. Accordingly, 

FINRA is proposing to amend Section 

4(c) of Schedule A to the FINRA ByLaws to reduce the administration and 

delivery fee for the Series 52 

examination from $130 to $110. 

Finally, FINRA is proposing to make 

certain non-substantive technical 

changes to the table of fees under 

Section 4(c) of Schedule A to the FINRA 

By-Laws, such as adding headings to the 

table. 

FINRA has filed the proposed rule 

change for immediate effectiveness. The 

implementation date will be October 1, 

2018, to coincide with the 

implementation of the restructured 

representative-level examination 

program. FINRA will also announce the 

implementation date of the proposed 

rule change in a Regulatory Notice. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(5) of the Act,25 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. 

FINRA believes that the proposed rule 

change constitutes an equitable 

allocation of fees as the examination 

fees will be used to cover FINRA’s costs 

in developing, maintaining and 

delivering the SIE examination and the 

revised representative-level 

examinations. FINRA further believes 

that the proposed examination fees are 

reasonable because they correspond to 

the costs associated with each 

examination and are, for the most part, 

the same or lower than the current 

examination fees for representative 

registrations. Accordingly, FINRA 

believes that the proposed examination 

fees are equitably allocated and 

reasonable. In addition, FINRA believes 

that the proposed rule change 

constitutes an equitable allocation of 

fees with respect to FINRA’s portion of 

the fee for the revised Series 52 

examination, which represents FINRA’s 

reduced costs for administering and 

delivering the revised examination. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Economic Impact Assessment 

FINRA has undertaken an economic 

impact assessment, as set forth below, to 

further analyze the regulatory need for 

the proposed rule change, the economic 

baseline of analysis, the economic 

impact and the alternatives considered. 

Regulatory Need 

FINRA has restructured the 

representative-level qualification 

examination program by creating the 

SIE examination, revising some of the 

representative-level qualification 

examinations and eliminating others. 

The proposed rule change amends 

Section 4(c) of Schedule A to the FINRA 

By-Laws to establish the fee for the SIE 

examination, revise the fees for the 

representative-level qualification 

examinations that FINRA is retaining 

and remove the fees for the 

representative-level qualification 

examinations that FINRA is eliminating. 

The proposed fees cover the 

development, maintenance and delivery 

of the SIE examination and the revised 

representative-level examinations with 

minimum impact on the examination 

costs for representatives. 

Further, as a result of the MSRB’s 

restructuring of the Series 52 

examination program, the proposed rule 

change amends Section 4(c) of Schedule 

A to the FINRA By-Laws to reduce 

FINRA’s administration and delivery fee 

for the revised Series 52 examination. 

Economic Baseline 

The economic baseline for the 

proposed rule change is the current 

FINRA representative-level 

examinations, and the fees for these 

examinations. The current 

representative-level examination 

program consists of 16 examinations 

(Series 6, 7, 11, 17, 22, 37, 38, 42, 57, 

62, 72, 79, 82, 86, 87 and 99). In 2017, 

there were approximately 102,000 

representative-level registrations 

requested. The Series 7, Series 6 and 

Series 79 are the top three examinations 

in terms of candidate volume, 

constituting approximately 92% of the 

total representative-level registration 

volume. Current fees range between $95 

and $305 per examination, and the fee 

schedule reflects the length of the 

examination, which is also correlated 

with the effort necessary to prepare and 

evaluate the examinations. As noted 

above, FINRA is eliminating a limited 

number of representative-level 

examinations that represent a small 

percentage of candidate volume. The 

current and proposed fees for the 

retained representative-level 

examinations are provided above. 

The economic baseline for the 

proposed rule change relating to the 

Series 52 examination is the current fee 

associated with FINRA’s administration 

and delivery of the examination. In 

2017, there were approximately 830 

Municipal Securities Representative 

registrations requested. FINRA’s fee for 

administering and delivering the Series 

52 examination is currently $130. 

Economic Impact 

For purposes of this discussion, 

FINRA has identified the potentially 

material impacts of the proposed fees. 

The cumulative examination fees for 

a given registration as a representative 

under FINRA’s proposed structure are 

the same as those under the current 

structure, with the exception of the 

categories of Private Securities Offerings 

Representative, Research Analyst and 

Operations Professional. For example, 

the current examination fee for 

registration as a General Securities 

Representative is $305 (the fee for the 

current Series 7 examination). Under 

the proposed fee structure, the 

cumulative examination fee to register 

as a General Securities Representative 

would remain $305 ($60 for the SIE 

examination and $245 for the revised 

Series 7 examination). There will be 

some economic impacts associated with 


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26While FINRA has maintained a $95 fee for the 

current Series 82 examination, the cost of 

developing, maintaining and delivering the current 

Series 82 examination most closely correlates to the 

cost of developing, maintaining and delivering the 

current Series 22 examination, which has a cost of 

$100. 

27The cumulative examination fee for registration 

as a Research Analyst will be reduced by $245 

because, under the restructured program, 

individuals registering as such will no longer be 

required to take the Series 7 examination. The total 

examination fee for registration as an Operations 

Professional will also be reduced by $30. 

28For example, the examination fee for the 

eliminated Corporate Securities Representative 

(Series 62) category is $95 while the new 

cumulative examination fee for registration as a 

General Securities Representative is proposed to be 

$305. 

the proposed changes for specific 

categories of registration. First, the total 

examination fee for registration as a 

Private Securities Offerings 

Representative will increase by $5. The 

current examination fee for registration 

as a Private Securities Offerings 

Representative is $95.26 Under the 

restructured program, the total 

examination fee for registration as 

Private Securities Offerings 

Representative will be $100 ($60 for the 

SIE examination and $40 for the revised 

Series 82 examination). The proposed 

$40 fee for the revised Series 82 

examination is consistent with the fees 

of other comparable revised 

examinations (i.e., the revised Series 6, 

Series 22 and Series 99 examinations) 

all of which have similar development, 

maintenance and delivery costs. 

Second, the examination fees for 

registration as a Research Analyst or an 

Operations Professional will be 

reduced.27 Third, for the eliminated 

categories and related examinations, 

individuals conducting the activities 

covered by the eliminated examinations 

may seek registration in one of the 

remaining categories, such as a General 

Securities Representative, which have 

higher cumulative examination fees.28

However, as noted, this represents a 

small group. 

The lifetime examination costs will 

also vary depending on the number of 

examination attempts by individual test 

takers. For instance, if an individual 

requires two attempts to pass the 

current Series 7 examination, the total 

cost of the examinations today would be 

$610 ($305 × 2). If the same individual 

passed the SIE examination on the first 

attempt, but still required two attempts 

to pass the revised Series 7 examination, 

the total cost of the examinations would 

be $550 ($60 for the SIE examination 

plus $245 × 2 for the revised Series 7 

examination). If, alternatively, the 

individual required two attempts at the 

SIE examination but passed the revised 

Series 7 examination on the first 

attempt, the total cost would be $365 

($60 × 2 for the SIE examination plus 

$245 for the revised Series 7 

examination). In both of these scenarios, 

because the person could take advantage 

of passing one of the requirements in 

the first attempt, the aggregate 

examination costs under the proposed 

fee structure would be less than today. 

Further, as noted above, in some cases, 

the aggregate examination costs are 

anticipated to be lower or higher, 

depending on the category in which the 

individual is seeking to register. 

Registered representatives seeking an 

additional or alternative representative 

registration category would also 

experience a net decrease in 

examination fees because they would 

have already satisfied the SIE 

examination requirement, thus only 

incurring the fees associated with the 

revised representative-level 

examination. However, based on 

historical data, these individuals 

represent a relatively small percentage 

of individuals seeking registrations. 

With respect to FINRA’s fee for 

administering and delivering the revised 

Series 52 examination, the fee will be 

reduced by $20 (from $130 to $110) to 

reflect FINRA’s adjusted costs for its 

portion of the fee for the examination. 

Impact on Firms 

FINRA believes that the restructured 

program is likely to decrease the total 

examination fees that firms pay. In 

aggregate, based on FINRA’s review of a 

representative sample of firms, it 

projects a reduction in total examination 

fees annually. As stated above, the 

examination fees paid to become 

registered will typically be lower in 

circumstances where multiple 

examination attempts are needed to 

pass. Under these circumstances, firms 

will experience a decrease in 

examination fees, to the extent that 

firms cover these costs for individuals. 

Under the restructured program, at least 

some of the costs associated with 

qualification will likely transfer to the 

individuals interested in becoming 

registered representatives. Members 

may require job applicants to pass the 

SIE examination before they can be 

considered for a position, and may 

require that the individuals pay the SIE 

examination fee. Further, FINRA 

understands that some firms today seek 

repayment from representatives for fees 

associated with representative-level 

examinations. The extent of the 

economic transfer between firm and 

representative depends upon, among 

other things, the competition between 

firms for the pool of qualified 

representatives and the size of that pool. 

In addition, broker-dealers and other 

regulated entities that seek to register 

Municipal Securities Representatives 

would see a reduction in FINRA’s 

portion of the fee for the revised Series 

52 examination. 

Impact on Individuals 

As described above, firms may require 

potential registrants to pass the SIE 

examination before they can be 

considered for a position, in which case 

the SIE examination fee may be incurred 

by the individual and the associated 

impact may be a shifting of some of the 

costs associated with qualification from 

the firm to the individual. In such a 

scenario, based on its own experience 

and in consultation with industry 

experts, FINRA believes the $60 fee for 

the SIE examination would not create a 

significant barrier to prospective 

registered representatives. 

The restructured program will likely 

change the total test taking time for 

individuals registering as 

representatives. For example, the total 

examination session times for 

registration as a Research Analyst 

decreases by four hours and fifteen 

minutes. The total session times may 

increase or decrease depending on the 

registration. To the extent that the 

changed session times lead to a change 

in test taking time by individuals, they 

may experience an increase or decrease 

in the opportunity cost of their time. 

Finally, some individuals who will 

not be pursuing registration as a 

representative may still take the SIE 

examination. These individuals include 

associated persons of firms who are not 

required to register as well as 

individuals who are not associated 

persons of firms, such as college 

students, individuals working in related 

financial service industries or who have 

personal interest in establishing 

proficiency in the subject matter. FINRA 

believes that the $60 fee for the SIE 

examination may encourage such 

individuals to take the examination, and 

in turn increase the pool of prospective 

registered representatives. 

Alternatives Considered 

FINRA considered a range of potential 

fee models in developing the proposed 

rule change, including different (dollar 

levels of) fees for the SIE examination, 

the representative-level examinations 

and the SIE examination in combination 

with the representative-level 

examinations. FINRA believes that the 

proposed fee structure strikes the 

appropriate balance between the 

operating costs associated with the 


daltland on DSKBBV9HB2PROD with NOTICES
45706 Federal Register / Vol. 83, No. 175 / Monday, September 10, 2018 / Notices 

29 15 U.S.C. 78s(b)(3)(A). 

30 17 CFR 240.19b–4(f)(2). 

31 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.17Ad–22(e)(2) and (3). 

4OCC’s By-Laws and Rules can be found on 

OCC’s public website: http://optionsclearing.com/ 

about/publications/bylaws.jsp. 

examinations and the impact to 

individuals and the industry. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 29 and paragraph (f)(2) of Rule 

19b–4 thereunder.30 At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

FINRA–2018–033 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–FINRA–2018–033. 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 such 

filing also will be available for 

inspection and copying at the principal 

office of FINRA. 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–FINRA– 

2018–033 and should be submitted on 

or before October 1, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–19502 Filed 9–7–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84021; File No. SR–OCC– 

2018–012] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing of Proposed Rule Change 

Related to The Options Clearing 

Corporation’s Board of Directors and 

Board Committee Charters 

September 4, 2018. 

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

Securities Exchange Act of 1934,1 and 

Rule 19b–4 thereunder,2 notice is 

hereby given that on August 24, 2018, 

The Options Clearing Corporation 

(‘‘OCC’’) 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 primarily by OCC. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The proposed rule change by OCC 

concerns changes to its (1) Audit 

Committee Charter, (2) Compensation 

and Performance Committee Charter, (3) 

Governance and Nominating Committee 

Charter, (4) Risk Committee Charter, (5) 

Technology Committee Charter and (6) 

Board of Directors Charter in connection 

with requirements applicable to OCC 

under Rules 17Ad–22(e)(2) 

(Governance) and (3) (Framework for 

the Comprehensive Management of 

Risks).3

The charters are attached as Exhibits 

5A through F to the filing [sic]. Material 

proposed to be added to the charters as 

currently in effect is marked by double 

underlining and material proposed to be 

deleted is marked by strikethrough text. 

The proposed rule change, including 

Exhibits 5A through F, is available on 

OCC’s website at https://

www.theocc.com/about/publications/ 

bylaws.jsp. The proposed rule change 

does not require any changes to the text 

of OCC’s By-Laws or Rules. All terms 

with initial capitalization that are not 

otherwise defined herein have the same 

meaning as set forth in the OCC ByLaws and Rules.4

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, 

OCC included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. OCC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

(1) Purpose 

The purpose of the proposed rule 

change is to make certain changes to 

OCC’s (1) Audit Committee (‘‘AC’’) 

Charter (‘‘AC Charter’’), (2) 

Compensation and Performance 

Committee (‘‘CPC’’) Charter (‘‘CPC 

Charter’’), (3) Governance and 

Nominating Committee (‘‘GNC’’) Charter 

(‘‘GNC Charter’’), (4) Risk Committee 

(‘‘RC’’) Charter (‘‘RC Charter’’), (5) 

Technology Committee (‘‘TC’’) Charter 


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