7424 Federal Register / Vol. 89, No. 23 / Friday, February 2, 2024 / Notices 

18Based on a compilation of OCC data for 

monthly volume of equity-based options and 

monthly volume of equity-based ETF options, see 

id., the Exchange’s market share in equity-based 

options decreased from 12.31% for the month of 

November 2022 to 11.67% for the month of 

November 2023. 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(2). 21 15 U.S.C. 78s(b)(2)(B). 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 34–99096 

(December 6, 2023), 88 FR 86188 (December 12, 

2023) (‘‘Notice’’). 

4 15 U.S.C. 78s(b)(3)(A). A proposed rule change 

may take effect upon filing with the Commission if 

it is designated by the SRO as ‘‘establishing or 

changing a due, fee, or other charge imposed by the 

self-regulatory organization on any person, whether 

or not the person is a member of the self-regulatory 

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

5See Notice 88 FR at 86188. 

6 15 U.S.C. 78s(b)(3)(C). 

share of executed volume of multiplylisted equity and ETF options trades.18

The Exchange believes that the 

proposed changes reflect this 

competitive environment because they 

modify the Exchange’s fees and rebates 

in a manner designed to continue to 

incent OTP Holders to direct trading 

interest (particularly manual 

transactions) to the Exchange, to 

provide liquidity and to attract order 

flow. To the extent that Floor Brokers 

are encouraged to participate in the FB 

Prepay Program and/or incented to 

utilize the Exchange as a primary 

trading venue for all transactions, all of 

the Exchange’s market participants 

should benefit from the improved 

market quality and increased 

opportunities for price improvement. 

The Exchange further believes that the 

proposed change could promote 

competition between the Exchange and 

other execution venues, including those 

that currently offer rebates on manual 

transactions by encouraging additional 

orders to be sent to the Exchange for 

execution. 

Finally, the proposed changes to 

remove superfluous or obsolete text 

from the FB Prepay Program are not 

designed to address any competitive 

issue but are instead designed to add 

clarity, transparency, and internal 

consistency to the Fee Schedule. 

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) 19 of the Act and 

subparagraph (f)(2) of Rule 19b–4 20

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under section 19(b)(2)(B) 21 of the Act to 

determine whether the proposed rule 

change 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSEARCA–2024–10 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–NYSEARCA–2024–10. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–NYSEARCA–2024–10 and should be 

submitted on or before February 23, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–02062 Filed 2–1–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99444; File No. SR–MSRB– 

2023–06] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Suspension of and Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove a 

Proposed Rule Change To Establish 

the 2024 Rate Card Fees for Dealers 

and Municipal Advisors Pursuant to 

MSRB Rules A–11 and A–13 

January 29, 2024. 

I. Introduction 

On November 30, 2023, the Municipal 

Securities Rulemaking Board (‘‘MSRB’’ 

or ‘‘Board’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change (File No. SR–MSRB–2023–06) to 

establish the 2024 Rate Card Fees for 

Dealers and Municipal Advisors.3 The 

proposed rule change was immediately 

effective upon filing with the 

Commission pursuant to Section 

19(b)(3)(A) of the Act.4 The proposed 

rule change was published for comment 

in the Federal Register on December 12, 

2023.5 Pursuant to Section 19(b)(3)(C) of 

the Act,6 the Commission is hereby 

temporarily suspending File No. SR– 

MSRB–2023–06 and instituting 


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7See Notice 88 FR at 86188. See also Exchange 

Act Release No. 95417 (Aug. 3, 2022), 87 FR 48530 

(Aug. 9, 2022), File No. SR–MSRB–2022–06 

(establishing the MSRB’s Annual Rate Card Process 

with respect to the setting of certain fee rates each 

calendar year (an ‘‘Annual Rate Card’’) and setting 

the initial Rate Card Fees through December 31, 

2023) (the ‘‘Annual Rate Card Process Notice’’). 

8See Notice 88 FR at 86188. The proposed 

amendments to Supplementary Material .01 to Rule 

A–11 and Supplementary Material .01 to Rule A– 

13 collectively make up the ‘‘proposed rule 

change.’’ 

9See Notice 88 FR at 86188; MSRB Fiscal Year 

2024 Budget, available at https://www.msrb.org/ 

sites/default/files/2023-09/MSRB-FY-2024-BudgetSummary.pdf. 

10See Notice 88 FR at 86189. 

11 Id. According to the MSRB, these contribution 

targets were determined by averaging the 

distribution of revenue assessed for Rate Card Fees 

over the past two fiscal years (Fiscal Year 2022 and 

Fiscal Year 2023) and the distribution of revenue 

assessed for Rate Card Fees over the past five fiscal 

years (Fiscal Year 2019 through Fiscal Year 2023). 

These two periods of time were used to reflect a 

balance of current market conditions and a longerterm historical precedent. To make the data 

comparable across fiscal years, the calculations 

were completed using the Market Activity Fee rates 

that were in place prior to the 2023 Rate Card, 

excluding the impact of the temporary fee 

reductions, and calculated as if the Municipal 

Advisor Professional Fee rate of $1,000 per covered 

professional that was in place for Fiscal Years 2021 

and 2022 had been in place for all Fiscal Years used 

in the calculations. Resulting contribution targets 

were rounded to the nearest whole percent. See also 

MSRB Fiscal Year 2024 Budget, available at https:// 

www.msrb.org/sites/default/files/2023-09/MSRBFY-2024-Budget-Summary.pdf. 

12See Notice 88 FR at 86190. 

13 Id. at 86188. 

14 Id. 

15See Letter from Leslie M. Norwood, Managing 

Director, Associate General Counsel, Securities 

Industry and Financial Markets Association, dated 

January 2, 2024 (‘‘SIFMA Letter’’); Letter from 

Susan Gaffney, Executive Director, National 

Association of Municipal Advisors, dated January 2, 

2024 (‘‘NAMA Letter’’); Letter from Michael Decker, 

Senior Vice President, Research and Public Policy, 

Bond Dealers of America, dated January 2, 2024 

(‘‘BDA Letter’’); Letter from Jessica Giroux, General 

Counsel and Head of Fixed Income Policy, 

American Securities Association; Michael Decker, 

Senior Vice President for Research and Public 

Policy, Bond Dealers of America; Susan Gaffney, 

Executive Director, National Association of 

Municipal Advisors; and Leslie Norwood, 

Managing Director, Associate General Counsel, and 

Head of Municipal Securities, Securities and 

Financial Markets Association, dated January 2, 

2024 (‘‘Joint Letter’’). 

16See Memorandum from the Office of Municipal 

Securities regarding a December 11, 2023 meeting 

with representatives of the American Securities 

Association (ASA), Bond Dealers of America (BDA), 

National Association of Municipal Advisors 

(NAMA), and Securities Industry and Financial 

Markets Association (SIFMA), dated December 11, 

2023 (‘‘OMS Memo’’). 

17See Letter from Michael Decker, Senior Vice 

President, Bond Dealers of America and Leslie 

Norwood, Managing Director and Associate General 

Counsel, Securities and Financial Markets 

Association, dated January 24, 2024 

(‘‘Supplemental Letter’’). 

18See Letter from Ernesto A. Lanza, Chief 

Regulatory and Policy Officer, Municipal Securities 

Rulemaking Board, dated January 26, 2024 (‘‘MSRB 

Letter’’). 

19 Joint Letter at 1–2. 

20 Id. at 1. 

21 Id. 

proceedings to determine whether to 

approve or disapprove File No. SR– 

MSRB–2023–06. 

II. Description of the Proposed Rule 

Change 

The MSRB filed with the Commission 

the proposed rule change to amend, 

consistent with the MSRB’s annual ratesetting process (‘‘Annual Rate Card 

Process’’): 7 (i) Supplementary Material 

.01 to Rule A–11 to modify the rate of 

assessment for the annual rate card fees 

on municipal advisors for covered 

professionals under Rule A–11(b) (the 

‘‘Municipal Advisor Professional Fee’’); 

and (ii) Supplementary Material .01 to 

Rule A–13 to modify the rate of 

assessments for the annual rate card fees 

on brokers, dealers, and municipal 

securities dealers (collectively, 

‘‘dealers’’) for certain underwriting fees 

under Rule A–13(b), transaction fees 

under Rule A–13(d)(i) and (ii), and trade 

count fees under Rule A–13(d)(iv)(a) 

and (b) (collectively, the ‘‘Market 

Activity Fees’’ and, together with the 

Municipal Advisor Professional Fee, the 

‘‘Rate Card Fees’’).8

In July 2023, the board of directors of 

the MSRB approved an annual expense 

budget of approximately $47.4 million 

for Fiscal Year 2024, which represents 

a 4.8% increase over the prior fiscal 

year, and established the baseline 

revenue that the MSRB will need to 

operate (i.e., the ‘‘Operational Funding 

Level’’).9 To achieve this Operational 

Funding Level, the MSRB proposed Rate 

Card Fees in its proposed rule change 

allocated based on the following 

contribution targets: underwriting fee at 

30%; transaction fee at 41%; trade count 

fee at 21%; and Municipal Advisor 

Professional Fee at 8%.10 This resulted 

in Proportional Contribution Amounts 

as follows for Fiscal Year 2024: 

underwriting fee of $12.15 million; 

transaction fee of $16.61 million; trade 

count fee of $8.51 million; and 

Municipal Advisor Professional Fee of 

$3.24 million.11 The proposed rule 

change would establish the Municipal 

Advisor Professional Fee specified in 

Rule A–11 and the Market Activity Fees 

specified in Rule A–13 in accordance 

with the chart below.12

Basis Current rate 

for 2023 

Proposed rate 

for 2024 

Underwriting Fee .......................................................... Per $1,000 Par Underwritten ........................................ $0.0297 $0.0371 

Transaction Fee ............................................................ Per $1,000 Par Transacted .......................................... 0.0107 0.0091 

Trade Count Fee .......................................................... Per Trade ...................................................................... 1.10 0.57 

Municipal Advisor Professional Fee ............................. Per Covered Professional ............................................ 1,060 1,160 

The MSRB designated the proposed 

rule change for immediate 

effectiveness.13 The new Rate Card Fees 

reflected in the proposed rule change 

became effective as of January 1, 2024.14

III. Summary of Comments Received to 

the Proposed Rule Change 

The Commission received four 

comment letters 15 on the proposed rule 

change during the comment period. The 

Commission’s Office of Municipal 

Securities also held a meeting with 

representatives of the American 

Securities Association (‘‘ASA’’), Bond 

Dealers of America (‘‘BDA’’), National 

Association of Municipal Advisors 

(‘‘NAMA’’), and the Securities Industry 

and Financial Markets Association 

(‘‘SIFMA’’ and, collectively with ASA, 

BDA, and NAMA, the ‘‘Joint 

Commenters’’).16 The Commission 

received an additional, supplemental 

comment letter from SIFMA and BDA 

after the comment period had ended.17

On January 26, 2024, the MSRB 

responded to the comment letters.18

The Joint Commenters expressed 

concern with the proposed rule 

change.19 Among other things, the Joint 

Commenters expressed concern ‘‘about 

the lack of transparency in the 

Municipal Securities Rulemaking 

Board’s budget and its budgeting 

process, and the need for MSRB’s 

resources to be directed toward areas 

within its statutory authority.’’ 20 The 

Joint Commenters described the MSRB’s 

budgeting and rate-setting strategy as 

‘‘alarmingly opaque and troubling’’ and 

lacking detail, particularly in instances 

where expenses are not directly tied to 

projects aligned with its congressional 

mandate.21 For example, the Joint 

Commenters cited a portion of the 


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22 Id. 

23 Id. 

24BDA Letter at 1. 

25 Id. at 2–3. 

26 Id. at 1–2. 

27NAMA Letter at 1–2. 

28 Id. at 1. 

29 Id. at 1–2. 

30 Id. at 2. 

31SIFMA Letter at 1. 

32 Id. at 2. 33 Id. at 3. 34 Id. at 4. 35Supplemental Letter at 1. 36 Id. 37 Id. 38MSRB Letter at 10. 39 Id. at 1–2. 

40 Id. at 3–4. 

41 Id. at 4–5. 

42 Id. at 5–6. 

43 Id. at 6–7. 

44 Id. at 7–8. 

45 Id. at 8–9. 

46 15 U.S.C. 78s(b)(3)(C). 

47 15 U.S.C. 78s(b)(1). 

MSRB’s budget that highlights 

technology initiatives, but that lacks 

specificity regarding those initiatives, 

including their costs and their 

alignment with the MSRB’s role as a 

repository for disclosure documents.22

Without such information, it is difficult, 

the Joint Commenters believe, for 

regulated entities to assess whether the 

fees assessed in the proposed rule 

change are ‘‘reasonable’’ as required 

under the Exchange Act.23

BDA expressed concern over the 

MSRB’s approach to fee setting, and 

believes that the Board’s budget process 

is opaque with little to no outside 

oversight over the MSRB’s spending.24

BDA stated that it would like to see the 

MSRB provide more transparency into 

its budgeting process and setting budget 

priorities, particularly regarding the 

MSRB’s focus on IT development and 

maintenance, which comprises 56 

percent of the MSRB budget.25 BDA is 

also concerned that the MSRB has 

provided no justification in its proposed 

rule change for imposing fee increases 

that BDA believes impose a ‘‘heavy’’ 

burden on dealers.26

NAMA expressed concern with the 

MSRB’s approach to budgeting and rate 

setting to accommodate its budget.27 In 

particular, NAMA noted that ‘‘it is 

difficult to know if MSRB fees are set at 

a reasonable rate (a MSRB responsibility 

within SEC Rule 15B) when the MSRB’s 

budget is so opaque.’’ 28 As one 

example, NAMA cited the lack of cost 

information and sufficient detail in the 

MSRB’s budget to demonstrate whether 

its emphasis on technology systems 

supports its congressional mandate.29

NAMA believes there is ‘‘insufficient 

detail within the budget to allow 

regulated parties (who pay for these 

activities) the opportunity to 

appropriately evaluate, address or 

question the fees assessed to meet the 

MSRB’s budget needs.’’ 30

SIFMA expressed concern that the 

proposed rule change does not provide 

adequate transparency on the MSRB’s 

rate setting process, reflects significant 

fee volatility, and fails to address flaws 

in the rate setting process that could 

create market harms.31 Regarding fee 

volatility, SIFMA noted that the 

underwriting fee has been increased 

25% and the trade count fee reduced by 

48%, yet the MSRB failed to explain 

why it believes this volatility in fee rates 

will not be repeated in subsequent 

years.32 Regarding transparency, SIFMA 

expressed concern that the MSRB’s 

proposed rule change includes 

‘‘significant and material changes’’ to its 

fee structure, yet the MSRB gave 

regulated entities its first official 

description of the amount of those 

changes a mere three weeks before they 

became effective.33 Regarding market 

harms, SIFMA noted that the MSRB is 

proposing to increase underwriting fees 

even as new issuance has decreased this 

past year, which could hurt the viability 

of the municipal marketplace.34

In their Supplemental Letter, SIFMA 

and BDA argued that although they have 

raised concerns about the MSRB’s 

budgeting and fee setting processes, the 

Commission should allow the proposed 

rule change to take effect without any 

changes.35 SIFMA and BDA expressed 

concern that suspending the proposed 

rule change could be ‘‘operationally 

disruptive’’ for dealers and would leave 

transactional fees ‘‘in limbo’’ until a 

2024 Rate Card is approved.36 SIFMA 

and BDA noted that they have had 

preliminary conversations with the 

MSRB about its budget and fee setting 

processes and will continue to press the 

MSRB as it works on its 2025 Budget.37

The MSRB argued that its 2024 

Budget ‘‘provides sufficient basis to 

evaluate the reasonableness of the 2024 

Rate Card Fees’’ and urged the 

Commission not to suspend the 

proposed rule change.38 The MSRB also 

outlined its plan for an ongoing process 

of ‘‘engagement’’ which would include: 

(i) a retrospective review of the Rate 

Card Process; (ii) instituting certain 

financial transparency enhancements, 

including more granular details 

regarding key technology services and 

initiatives; and (iii) developing avenues 

to provide municipal market 

participants an opportunity to offer 

input to the MSRB in advance of 

finalization of annual budgets.39

The MSRB stated that its retrospective 

review of the Rate Card Process will 

consider the appropriateness of 

instituting caps on fee changes more 

broadly or other means to limit the 

magnitude of year-to-year fee changes.40

The retrospective review also ‘‘could 

reconsider’’ a revenue-based or 

transaction volume-based fee 

assessment model.41

Regarding financial transparency, the 

MSRB cited Section IV of its 2024 

Budget Summary as an example of its 

‘‘granular breakdown’’ of program 

expenditures and stated that it will seek 

feedback on whether this ‘‘additional 

information’’ is responsive to 

commenters’ requests for greater detail 

about the MSRB’s budget areas and 

initiatives.42 The MSRB stated that it 

would develop ‘‘reasonable allocation 

assumptions’’ to aid in the 

understanding of its technology systemrelated expenses.43 The MSRB also 

stated that it will ‘‘explore other 

possible avenues’’ for improving the 

transparency of its technology 

initiatives and priorities and believes 

that all such expenditures are within the 

MSRB’s legal authority.44

Regarding input from market 

participants, the MSRB stated that it 

‘‘looks to provide’’ opportunities for 

market participants to provide input 

and ‘‘could consider’’ a more formalized 

survey of market participants during the 

rate setting process.45

IV. Suspension of the Proposed Rule 

Change 

Pursuant to Section 19(b)(3)(C) of the 

Act,46 at any time within 60 days of the 

date of filing of an immediately effective 

proposed rule change pursuant to 

Section 19(b)(1) of the Act,47 the 

Commission summarily may 

temporarily suspend the change in the 

rules of a self-regulatory organization 

(‘‘SRO’’) 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. As described below, the 

Commission believes a temporary 

suspension of the proposed rule change 

is necessary or appropriate to allow for 

additional analysis of the proposed rule 

change’s consistency with the Act and 

the rules thereunder. 

When SROs file their proposed rule 

changes with the Commission, 

including fee filings like the MSRB’s 

present proposed rule change, they are 

required to provide a statement 

supporting the proposed rule change’s 

basis under the Act and the rules and 

regulations thereunder applicable to the 


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48See 17 CFR 240.19b–4 (Item 3 entitled ‘‘SelfRegulatory Organization’s Statement of the Purpose 

of, and Statutory Basis for, the Proposed Rule 

Change’’). 

49See id. 

50 15 U.S.C. 78o–4(b)(2)(J). 

51 Id. 

52 Id. 

53 15 U.S.C. 78o–4(b)(2)(C). 

54Notice 88 FR at 86191. 

55 Id. 

56MSRB Letter. 

57 15 U.S.C. 78o–4(b)(2)(J). 

58 Id. 

59 15 U.S.C. 78o–4(b)(2)(C). 

60For purposes of temporarily suspending the 

proposed rule change, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

61 15 U.S.C. 78s(b)(3)(C). Once the Commission 

temporarily suspends a proposed rule change, 

Section 19(b)(3)(C) of the Act requires that the 

Commission institute proceedings under Section 

19(b)(2)(B) to determine whether a proposed rule 

change should be approved or disapproved. 

62 15 U.S.C. 78s(b)(2)(B). 

63 15 U.S.C. 78s(b)(2)(B). Section 19(b)(2)(B) of the 

Act also provides that proceedings to determine 

whether to disapprove a proposed rule change must 

be concluded within 180 days of the date of 

publication of notice of the filing of the proposed 

rule change. See id. The time for conclusion of the 

proceedings may be extended for up to 60 days if 

the Commission finds good cause for such 

extension and publishes its reasons for so finding, 

or if the SRO consents to the longer period. See id. 

64 15 U.S.C. 78o–4(b)(2)(J). 

65 Id. 

66 Id. 

67 15 U.S.C. 78o–4(b)(2)(C). 

SRO.48 The instructions to Form 19b–4, 

on which SROs file their proposed rule 

changes, specify that such statement 

‘‘should be sufficiently detailed and 

specific to support a finding that the 

proposed rule change is consistent with 

[those] requirements.’’ 49

Among other things, the MSRB’s 

proposed rule change is subject to 

Section 15B(b)(2)(J) of the Exchange 

Act,50 which states that the MSRB’s 

rules shall provide that each municipal 

securities broker, municipal securities 

dealer, and municipal advisor shall pay 

to the MSRB such reasonable fees and 

charges as may be necessary or 

appropriate to defray the costs and 

expenses of operating and administering 

the MSRB.51 Such rules must specify 

the amount of such fees and charges, 

which may include charges for failure to 

submit to the MSRB, or to any 

information system operated by the 

MSRB, within the prescribed 

timeframes, any items of information or 

documents required to be submitted 

under any rule issued by the MSRB.52

The MSRB’s proposed rule change also 

is subject to Section 15B(b)(2)(C) of the 

Exchange Act,53 which states, among 

other things, that the MSRB’s rules shall 

be designed, in general, to protect 

investors, municipal entities, obligated 

persons, and the public interest. 

In support of its proposed rule 

change, the MSRB stated that the 

proposed rule change satisfies the 

requirements of Section 15B(b)(2)(J) 

‘‘through a reasonable fee structure that 

ensures (i) an equitable balance of 

necessary and appropriate fees among 

regulated entities and (ii) a fair 

allocation of the burden of defraying the 

costs and expenses of the MSRB.’’ 54

Specifically, the MSRB believes that the 

2024 Rate Card ‘‘will achieve reasonable 

fees to be paid by regulated entities that 

(i) are necessary and appropriate to 

sustain the operation and 

administration of the MSRB by 

defraying the MSRB’s anticipated Fiscal 

Year 2024 operating and administrative 

expenses; (ii) reasonably and 

appropriately allocate fees among firms 

by equitably distributing fees in 

accordance with each individual firm’s 

overall market activities; and (iii) 

reasonably and appropriately adjust for 

the annual fluctuations in the volume of 

market activity as compared to budget 

expectation by incorporating the actual 

amounts of Market Activity Fees and 

Municipal Advisor Professional Fees 

collected as compared to budget into 

this and future rate-setting 

processes.’’ 55 The MSRB provided 

additional support for the 

reasonableness of the proposed rule 

change in the MSRB Letter.56 However, 

due to the date of receipt of the MSRB 

Letter (i.e., late afternoon one business 

day before the suspension deadline), the 

Commission has not had sufficient time 

to evaluate the material included 

therein. Temporary suspension will 

allow for additional analysis of whether 

the MSRB Fiscal Year 2024 Budget is 

reasonable and whether the proposed 

rule change provides for reasonable fees 

and charges that satisfy the standards 

under the Act and the rules thereunder. 

In temporarily suspending the 

MSRB’s proposed rule change, the 

Commission intends to further consider 

whether the proposed fees and charges 

are consistent with the statutory 

requirements applicable to the MSRB 

under the Act. Among other things, the 

Commission will consider whether the 

proposed rule change provides for 

reasonable fees and charges that satisfy 

the standards under the Act and the 

rules thereunder.57 The Commission 

will also consider whether the fees and 

charges in the proposed rule change are 

necessary or appropriate to defray the 

costs and expenses of operating and 

administering the MSRB,58 including 

whether such costs and expenses, as set 

forth in the MSRB’s Fiscal Year 2024 

Budget, are themselves reasonable. 

Additionally, the Commission will 

consider whether the fees and charges 

in the proposed rule change are in the 

public interest.59

Therefore, the Commission finds that 

it is necessary or appropriate in the 

public interest, for the protection of 

investors, and otherwise in furtherance 

of the purposes of the Act, to 

temporarily suspend the proposed rule 

change.60

V. Proceedings To Determine Whether 

To Approve or Disapprove the 

Proposed Rule Change 

In addition to temporarily suspending 

the proposal, the Commission also 

hereby institutes proceedings pursuant 

to Sections 19(b)(3)(C) 61 and 

19(b)(2)(B) 62 of the Act to determine 

whether the proposed rule change 

should be approved or disapproved. 

Institution of such proceedings is 

appropriate at this time in view of the 

legal and policy issues raised by the 

proposed rule change. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to any of the 

issues involved. Rather, as described 

below, the Commission seeks and 

encourages interested persons to 

provide comments on the proposed rule 

change to inform the Commission’s 

analysis of whether to approve or 

disapprove the proposed rule change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,63 the Commission is providing 

notice of the grounds for possible 

disapproval under consideration. The 

Commission is instituting proceedings 

to allow for additional analysis of 

whether the MSRB has sufficiently 

demonstrated how the proposed rule 

change is consistent with Sections 

15B(b)(2)(J) and 15B(b)(2)(C) of the 

Act.64 Section 15B(b)(2)(J) of the Act 

states that the MSRB’s rules shall 

provide that each municipal securities 

broker, municipal securities dealer, and 

municipal advisor shall pay to the 

MSRB such reasonable fees and charges 

as may be necessary or appropriate to 

defray the costs and expenses of 

operating and administering the 

MSRB.65 Such rules must specify the 

amount of such fees and charges, which 

may include charges for failure to 

submit to the MSRB, or to any 

information system operated by the 

MSRB, within the prescribed 

timeframes, any items of information or 

documents required to be submitted 

under any rule issued by the MSRB.66

Section 15B(b)(2)(C) of the Exchange 

Act 67 states, among other things, that 


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68See supra note 15. 

69See discussion supra Section III. 

70Rule 700(b)(3), Commission Rules of Practice, 

17 CFR 201.700(b)(3). 

71See id. 

72See id. 

73See Susquehanna Int’l Group, LLP v. Securities 

and Exchange Commission, 866 F.3d 442, 446–47 

(D.C. Cir. 2017) (rejecting the Commission’s reliance 

on an SRO’s own determinations without sufficient 

evidence of the basis for such determinations). 

74Section 19(b)(2) of the Exchange Act, as 

amended by the Securities Act Amendments of 

1975, Public Law 94–29 (June 4, 1975), grants the 

Commission flexibility to determine what type of 

proceeding—either oral or notice and opportunity 

for written comments—is appropriate for 

consideration of a particular proposal by a selfregulatory organization. See Securities Act 

Amendments of 1975, Senate Comm. on Banking, 

Housing & Urban Affairs, S. Rep. No. 75, 94th 

Cong., 1st Sess. 30 (1975). 75 15 U.S.C. 78s(b)(3)(C). 

the MSRB’s rules shall be designed, in 

general, to protect investors, municipal 

entities, obligated persons, and the 

public interest. 

As discussed in Section IV above, the 

Notice, and the MSRB Letter, the MSRB 

has made various arguments in support 

of the proposals, and the Commission 

received comment letters disputing the 

MSRB’s arguments and expressing 

concerns regarding the proposals.68 In 

particular, commenters argued that the 

MSRB did not provide sufficient 

information to establish that the 

proposed fees and charges are consistent 

with the Act and the rules thereunder.69

Under the Commission’s Rules of 

Practice, the ‘‘burden to demonstrate 

that a proposed rule change is 

consistent with the [Act] and the rules 

and regulations issued thereunder . . . 

is on the [SRO] that proposed the rule 

change.’’ 70 The description of a 

proposed rule change, its purpose and 

operation, its effect, and a legal analysis 

of its consistency with applicable 

requirements must all be sufficiently 

detailed and specific to support an 

affirmative Commission finding,71 and 

any failure of an SRO to provide this 

information may result in the 

Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Act and the applicable rules 

and regulations.72 Moreover, 

‘‘unquestioning reliance’’ on an SRO’s 

representations in a proposed rule 

change would not be sufficient to justify 

Commission approval of a proposed rule 

change.73

The Commission believes it is 

appropriate to institute proceedings to 

allow for additional consideration and 

comment on the issues raised herein, 

including as to whether the proposed 

fees and charges are consistent with the 

Act, any potential comments or 

supplemental information provided by 

the MSRB, and any additional 

independent analysis by the 

Commission. 

V. Commission’s Solicitation of 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the concerns 

and issues identified above, as well as 

any other relevant concerns. In 

particular, the Commission invites the 

written views of interested persons 

concerning whether the proposal is 

consistent with Section 15B(b)(2)(J), 

Section 15B(b)(2)(C), or any other 

provision of the Act, or the rules and 

regulations thereunder. The 

Commission asks that commenters 

address the sufficiency and merit of the 

MSRB’s statements in support of the 

proposal, in addition to any other 

comments they may wish to submit 

about the proposed rule change. The 

Commission also invites the written 

views of interested persons on: (i) what 

process the MSRB should undertake to 

ensure that the fees assessed in its Rate 

Card filing and underlying Budget are 

both reasonable and capable of 

meaningful evaluation by the public, 

market participants, and the 

Commission; (ii) what specific data and 

information the MSRB should publicly 

disclose (that it does not currently 

publicly disclose); (iii) when the MSRB 

should file its Rate Card each year; (iv) 

whether the MSRB’s representations 

about the cost, functionality, and 

evolution of the EMMA system have 

been consistent with actual practice in 

the years since EMMA was adopted; and 

(v) what general steps could be taken in 

the future to minimize the potential 

operational disruption caused by either 

the Commission suspending a Rate Card 

filing or a Rate Card otherwise not being 

effective on January 1 of the calendar 

year. Although there do not appear to be 

any issues relevant to approval or 

disapproval that would be facilitated by 

an oral presentation of views, data, and 

arguments, the Commission will 

consider, pursuant to Rule 19b–4, any 

request for an opportunity to make an 

oral presentation.74

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by February 23, 2024. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by March 8, 2024. 

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– 

MSRB–2023–06 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–MSRB–2023–06. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the MSRB. Do not include 

personal identifiable information in 

submissions; you should submit only 

information that you wish to make 

available publicly. We may redact in 

part or withhold entirely from 

publication submitted material that is 

obscene or subject to copyright 

protection. All submissions should refer 

to File Number SR–MSRB–2023–06 and 

should be submitted on or before 

February 23, 2024. Rebuttal comments 

should be submitted by March 8, 2024. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(3)(C) of the Act,75 that File 

No. SR–MSRB–2023–06 be, and hereby 

is, temporarily suspended. In addition, 

the Commission is instituting 

proceedings to determine whether the 

proposed rule change should be 

approved or disapproved. 


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76 17 CFR 200.30–3(a)(11) and (12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange originally filed to amend the Fee 

Schedule on January 2, 2024 (NYSEArca–2023–90) 

[sic] and withdrew such filing on January 12, 2024 

(SR–NYSEArca–2024–07) [sic], which latter filing 

the Exchange withdrew on January 25, 2024. 

5See Fee Schedule, Floor Broker Fixed Cost 

Prepayment Incentive Program (the ‘‘FB Prepay 

Program’’). The Exchange notes that the FB Prepay 

Program is currently structured similarly to the 

Floor Broker prepayment program offered by its 

affiliated exchange, NYSE American LLC (‘‘NYSE 

American’’). 

6See Fee Schedule, FB Prepay Program, endnote 

17 (providing in relevant part that ‘‘Submitting 

Broker QCC credits and Floor Broker rebates earned 

through the Manual Billable Rebate Program shall 

not combine to exceed $2,500,000 per month per 

firm’’). A ‘‘Submitting Broker QCC credit’’ is 

available to any broker submitting a QCC 

transaction to the Exchange (a ‘‘Submitting 

Broker’’), whether the broker is a Floor Broker on 

the Trading Floor or a broker that enters orders 

electronically through an interface with the 

Exchange. The Exchange provides a ($0.22) per 

contract credits to Submitting Brokers for NonCustomer vs.Non-Customer QCC transactions and a 

($0.16) per contract credit to Submitting Brokers for 

Customer vs. Non-Customer QCC transactions. See 

Fee Schedule, NYSE Arca OPTIONS: TRADERELATED CHARGES FOR STANDARD OPTIONS, 

QUALIFIED CONTINGENT CROSS (‘‘QCC’’) 

TRANSACTION FEES AND CREDITS. 

7See Fee Schedule, FB Prepay Program 

(providing, in relevant part, that the notification 

‘‘email to enroll in the Program must originate from 

an officer of the Floor Broker organization and, 

except as provided for below, represents a binding 

commitment through the end of the following 

calendar year.’’). The Exchange proposes to modify 

Section III.E. [sic] of the Fee Schedule to remove the 

now obsolete phrase ‘‘except as provided for 

below,’’ as there is no exception to the notification 

requirement, which modification will add clarity, 

transparency, and internal consistency to the Fee 

Schedule. See proposed Fee Schedule, FB Prepay 

Program. 

For the Commission, pursuant to delegated 

authority.76

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–02069 Filed 2–1–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99440; File No. SR– 

NYSEARCA–2024–10] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Modify the NYSE Arca 

Options Fee Schedule 

January 29, 2024. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on January 

25, 2024, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify the 

NYSE Arca Options Fee Schedule (‘‘Fee 

Schedule’’) regarding the Floor Broker 

Fixed Cost Prepayment Incentive 

Program (the ‘‘FB Prepay Program’’). 

The Exchange proposes to implement 

the fee change effective January 25, 

2024.4 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. 

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 purpose of this filing is to amend 

the Fee Schedule to modify the FB 

Prepay Program. The Exchange proposes 

to implement the rule change on 

January 25, 2024. 

The FB Prepay Program is a 

prepayment incentive program that 

allows Floor Brokers to prepay certain 

of their annual Eligible Fixed Costs in 

exchange for volume rebates. 

Participating Floor Brokers receive their 

monthly rebate amount on a monthly 

basis.5 All Floor Brokers that participate 

in the FB Prepay Program are eligible for 

a rebate on manual billable volume of 

($0.08) per billable side, payable on a 

monthly basis. In addition, FB Prepay 

Program participants that achieve more 

than 500,000 billable sides in a month 

are eligible for an additional rebate of 

($0.02) per billable side. The additional 

($0.02) is retroactive to the first billable 

side. Manual billable volume includes 

transactions for which at least one side 

is subject to manual transaction fees and 

excludes QCCs. Any volume calculated 

to achieve the Limit of Fees on Options 

Strategy Executions (‘‘Strategy Cap’’), 

regardless of whether this cap is 

achieved, is likewise excluded from the 

Manual Billable Rebate Program because 

fees on such volume are already capped 

and therefore such volume does not 

increase billable manual volume. The 

Exchange notes that it places a 

$2,000,000 per firm, monthly maximum 

limit on the rebates earned through the 

Manual Billable Rebate Program when 

combined with ‘‘Submitting Broker QCC 

Credits.’’ 6

Floor Brokers that wish to participate 

in the FB Prepay Program for the 

following calendar year must notify the 

Exchange no later than the last business 

day of December in the current year.7

The Exchange does not issue any 

refunds in the event that a Floor Broker 

organization’s prepaid Eligible Fixed 

Costs exceeds actual costs. 

The Exchange proposes to modify the 

FB Prepay Program as follows. First, the 

Exchange proposes to increase the 

maximum allowable combined 

Submitting Broker QCC credits and 

Floor Broker rebates earned through the 

Manual Billable Rebate Program (the 

‘‘Maximum Combined Rebate/Credit’’) 

to $2,500,000 per month per firm, an 

increase from the current maximum of 

$2,000,000. The proposed increase is 

designed to encourage Floor Broker 

firms to continue to direct transactions 

to the Exchange, despite increasing 

industry volumes making it less difficult 

to attain the maximum rebate. 

Next, the Exchange proposes to 

modify the FB Prepay Program to 

remove reference to a specific year (i.e., 

November 2022) and to instead 

reference ‘‘November of the current 

year’’ as the date that the Exchange will 

use for the calculation of a Floor 

Broker’s Eligible Fixed Costs for the 

following calendar year. The FB Prepay 

Program currently specifies that a Floor 

Broker that commits to the program will 

be invoiced in January for Eligible Fixed 

Costs, based on annualizing their 

Eligible Fixed Costs incurred in 

November 2022. The Exchange believes 

that this proposed change would 

prevent the Exchange from relying on a 

stale date and would add flexibility to 

the program (insofar as it would not 

need to be revised each year). 

Finally, the Exchange proposes to 

allow a Floor Broker to join the Program 

after the first of the year To do so, 


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