18430 Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices 

18NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSEArca–2006–21)). 

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

20 17 CFR 240.19b–4(f). 21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

agents, have a wide range of choices of 

where to route orders for execution’; 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’. . . .’’.18 Accordingly, the 

Exchange does not believe its proposed 

fee change imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

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 19 and paragraph (f) of Rule 

19b–4 20 thereunder. 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 will institute proceedings 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeBZX–2022–020 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–CboeBZX–2022–020. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeBZX–2022–020 and 

should be submitted on or before April 

20, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06629 Filed 3–29–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94498; File No. SR–FINRA– 

2022–006] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Modify the Trade 

Reporting Fees Applicable to 

Participants That Use the FINRA/NYSE 

Trade Reporting Facility 

March 23, 2022. 

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 March 16, 

2022, the Financial Industry Regulatory 

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

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by FINRA. 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 FINRA 

Rule 7620B (Trade Reporting Facility 

Reporting Fees) to modify the trade 

reporting fees applicable to participants 

that use the FINRA/NYSE Trade 

Reporting Facility (‘‘FINRA/NYSE 

TRF’’). 

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. 


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3The four FINRA facilities are the FINRA/NYSE 

TRF, two FINRA/Nasdaq Trade Reporting Facilities 

(together, the ‘‘FINRA/Nasdaq TRF’’), and the 

Alternative Display Facility (‘‘ADF’’ and together, 

the ‘‘FINRA Facilities’’). 

4Members can use the FINRA/NYSE TRF as a 

backup system and reserve bandwidth if there is a 

failure at another FINRA Facility that supports the 

reporting of OTC trades in NMS stocks. As set forth 

in Trade Reporting Notice 1/20/16 (OTC Equity 

Trading and Reporting in the Event of Systems 

Issues), a firm that routinely reports its OTC trades 

in NMS stocks to only one FINRA Facility must 

establish and maintain connectivity and report to a 

second FINRA Facility, if the firm intends to 

continue to support OTC trading as an executing 

broker while its primary facility is experiencing a 

widespread systems issue. 

5See the Second Amended and Restated Limited 

Liability Company Agreement of FINRA/NYSE 

Trade Reporting Facility LLC. The limited liability 

company agreement, which was submitted as part 

of the rule filing to establish the FINRA/NYSE TRF 

and was subsequently amended and restated, can be 

found in the FINRA Manual. 

6Pursuant to Rule 7630B (Aggregation of Activity 

of Affiliated Members), affiliated members can 

aggregate their activity for purposes of fees and 

credits that are dependent upon the volume of their 

activity. No change is proposed to be made to Rules 

7610B or 7630B, and so there will be no change to 

the requirements for, or process of, securities 

transaction credits and the aggregation of affiliated 

member activity. 

7FINRA’s oversight of this function performed by 

the Business Member is conducted through a 

recurring assessment and review of the FINRA/ 

NYSE TRF operations by an outside independent 

audit firm. 

8Because the FINRA/NYSE TRF and FINRA/ 

Nasdaq TRF are operated by different business 

members competing for market share, FINRA does 

not take a position on whether the pricing for one 

TRF is more favorable or competitive than the 

pricing for the other TRF. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The FINRA/NYSE TRF, which is 

operated by NYSE Market (DE), Inc. 

(‘‘NYSE Market (DE)’’), is one of four 

FINRA facilities 3 that FINRA members 

can use to report over-the-counter 

(‘‘OTC’’) trades in NMS stocks. While 

members are required to report all OTC 

trades in NMS stocks to FINRA, they 

may choose which FINRA Facility (or 

Facilities) to use to satisfy their trade 

reporting obligations.4

NYSE Market (DE) proposes to modify 

the trade reporting fees applicable to 

FINRA members that use the FINRA/ 

NYSE TRF (‘‘Participants’’). NYSE 

Market (DE) proposes to subject each 

Participant to a monthly fee that will be 

based on whether that Participant 

submitted trade reports to the FINRA/ 

NYSE TRF during the relevant month, 

and if so, how many trade reports it 

submitted. FINRA is proposing to 

amend FINRA Rule 7620B (FINRA/ 

NYSE Trade Reporting Facility 

Reporting Fees) accordingly. There is no 

new product or service accompanying 

the proposed fee change. 

Background 

The FINRA/NYSE TRF 

Under the governing limited liability 

company agreement,5 the FINRA/NYSE 

TRF has two members: FINRA and 

NYSE Market (DE). FINRA, the ‘‘SRO 

Member,’’ has sole regulatory 

responsibility for the FINRA/NYSE TRF. 

NYSE Market (DE), the ‘‘Business 

Member,’’ is primarily responsible for 

the management of the FINRA/NYSE 

TRF’s business affairs to the extent 

those affairs are not inconsistent with 

the regulatory and oversight functions of 

FINRA. 

The Business Member establishes 

pricing applicable to FINRA/NYSE TRF 

Participants for use of the FINRA/NYSE 

TRF. That pricing is then implemented 

pursuant to FINRA rules that FINRA 

must file with the Commission and that 

must be consistent with the Act. 

Specifically, FINRA/NYSE TRF 

Participants are charged fees pursuant to 

Rule 7620B and may qualify for 

transaction credits under Rule 7610B 

(Securities Transaction Credit) (such 

credits, ‘‘Securities Transaction 

Credits’’).6 The relevant FINRA rules are 

administered by NYSE Market (DE), in 

its capacity as the Business Member and 

operator of the FINRA/NYSE TRF on 

behalf of FINRA,7 and the Business 

Member collects all fees on behalf of the 

FINRA/NYSE TRF. 

According to the Business Member, 

the FINRA/NYSE TRF operates in a 

competitive environment. The FINRA 

Facilities have different pricing 8 for 

their respective participants and 

compete for FINRA members’ trade 

report activity. The FINRA/NYSE TRF is 

smaller than the FINRA/Nasdaq TRF in 

terms of reported volume. For the 

month of December 2021, FINRA 

members used the FINRA/NYSE TRF to 

report approximately 17% of shares in 

NMS stocks traded OTC, compared to 

approximately 83% for the FINRA/ 

Nasdaq TRF. 

Operating Costs 

The overall costs of operating and 

maintaining the FINRA/NYSE TRF 

involve both fixed and variable 

components. The variable component 

constitutes the majority of the cost and 

largely relates to the number of reports 

that the FINRA/NYSE TRF, on behalf of 

its subscribers, reports for public 

dissemination (or ‘‘tape’’) purposes. It 

also reflects the number of reports 

submitted to the FINRA/NYSE TRF that 

are not published to the tape. 

Specifically, if the number of tape 

reports increases, the Business 

Member’s variable costs increase, and 

conversely, if the number of tape reports 

decreases, the Business Member’s 

variable costs decrease. The variable 

costs associated with tape reports are 

not related to the size (number of 

shares) of the reported transaction. 

Accordingly, the variable costs relating 

to a tape report for a trade for one share 

(or even less than one share) are the 

same as the variable costs relating to a 

tape report for 100,000 shares reported 

to the FINRA/NYSE TRF. 

The Business Member is entitled to 

any profits and must cover any losses 

that arise from operating the FINRA/ 

NYSE TRF. According to the Business 

Member, the profits or losses generally 

are the difference between: 

1. The revenue (‘‘Revenue’’) from: (a) 

Subscriber fees charged in accordance with 

FINRA Rule 7620B (‘‘Subscriber Fee 

Revenue’’), and (b) market data revenue for 

the transaction information provided to the 

securities information processors (‘‘SIPs’’) via 

the FINRA/NYSE TRF less the Securities 

Transaction Credits (together, ‘‘Net Market 

Data Revenue’’); and 

2. the costs of operating and maintaining 

the FINRA/NYSE TRF. 

According to the Business Member, in 

2020 and 2021, costs of operating and 

maintaining the FINRA/NYSE TRF were 

greater than Revenues, causing the 

FINRA/NYSE TRF to run at a loss. 

According to the Business Member, 

during that time, the number of tape 

reports increased (particularly for 

smaller-sized transactions) and total 

Subscriber Fee Revenue decreased, 

without a relative change to the 

difference in total share volume 

reported to the FINRA/NYSE TRF as 

compared to other FINRA Facilities. 

More specifically, compared to the 2018 

monthly average, as of December 31, 

2021, monthly average tape report 

activity for the FINRA/NYSE TRF had 

increased by 329% and monthly average 

costs had increased by 146%. At the 

same time, monthly average Subscriber 

Fee Revenue had decreased by 19%. Net 

Market Data Revenue varied during the 

period, but overall it decreased as 

compared to the first quarter of 2018. 

Ultimately, the Business Member 

believes that the FINRA/NYSE TRF 

would continue to incur a significant 

loss if the current fee and credit 

structure remained in place, and that 

such losses would make the FINRA/ 

NYSE TRF unsustainable in the long 

term. 

Accordingly, the Business Member 

proposes to amend the fees set forth in 

FINRA Rule 7620B. By so doing, it has 

proposed a change that it believes 


khammond on DSKJM1Z7X2PROD with NOTICES
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9See Securities Exchange Act Release No. 88324 

(March 5, 2020), 85 FR 14275 (March 11, 2020) (SR– 

FINRA–2020–006) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change to Modify 

the Trade Reporting Fees Applicable to the FINRA/ 

NYSE Trade Reporting Facility). Under Rule 7620B, 

Participants are charged a flat fee for access to the 

complete range of functionality offered by the 

FINRA/NYSE TRF rather than a separate fee for 

each activity (e.g., a per trade or per side fee for 

reporting a trade, a separate per trade fee for 

canceling a trade, etc.) or a separate fee for 

connectivity. See, e.g., Rules 7510(a) and 7520 

(trade reporting fees and connectivity charges for 

the ADF) and Rule 7620A (trade reporting fees for 

the FINRA/Nasdaq TRF). 

10A Participant ‘‘is a ‘Retail Participant’ if 

substantially all of its trade reporting activity on the 

FINRA/NYSE Trade Reporting Facility comprises 

Retail Orders.’’ In turn, a ‘‘Retail Order’’ is ‘‘an 

order that originates from a natural person, 

provided that, prior to submission, no change is 

made to the terms of the order with respect to price 

or side of market and the order does not originate 

from a trading algorithm or any other computerized 

methodology.’’ FINRA Rule 7620B(a). 

11See FINRA Rule 7620B(b). ‘‘The rate of the 

monthly fee for participants that are not Retail 

Participants will be based, where applicable, on the 

participant’s ‘FINRA/NYSE TRF Market Share,’ 

which is defined as the percentage calculated by 

dividing the total number of shares reported to the 

FINRA/NYSE Trade Reporting Facility for public 

dissemination (or ‘tape’) purposes during a given 

calendar month that are attributable to the 

participant by the total number of all shares 

reported to the CTA or UTP SIP, as applicable, 

during that period.’’ 

12As is the case today, after the first two calendar 

months, the Participant will be charged regardless 

of connectivity. 

13See Securities Exchange Act Release No. 87205 

(October 3, 2019), 84 FR 54219 (October 9, 2019) 

(SR–FINRA–2019–024) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

to Amend FINRA Rule 7620B to Modify the Trade 

Reporting Fees Applicable to Participants That Use 

the FINRA/NYSE Trade Reporting Facility). 

should allow the monthly Subscriber 

Fee Revenue to cover the total costs of 

operating and maintaining the FINRA/ 

NYSE TRF. The proposed changes are 

expected to allow the FINRA/NYSE TRF 

to continue operating without amassing 

losses similar to those it currently has. 

Proposed Amendments to Rule 7620B 

Under the current fee structure,9

Participants are either ‘‘Retail 

Participants’’ 10 or Participants that are 

not Retail Participants (‘‘Non-Retail 

Participants’’). The former are exempt 

from the monthly fee, while the latter 

are subject to a monthly fee based, 

where applicable, on the Participant’s 

‘‘FINRA/NYSE TRF Market Share.’’ 11

The fees set forth in Rule 7620B are 

tiered. 

Under the proposed, simplified fee 

structure, the monthly fee would no 

longer depend on whether a Participant 

were a Retail Participant or its FINRA/ 

NYSE TRF Market Share, and the 

current tiered structure would be 

removed. Rather, if a Participant 

submitted one or more trade reports to 

the FINRA/NYSE TRF during a given 

calendar month, the Participant would 

pay a monthly fee equal to the sum of 

(a) $1,000 plus (b) $0.0055 per 

published tape report. If a Participant 

submitted no trade reports to the 

FINRA/NYSE TRF during that calendar 

month, the Participant would pay a 

monthly fee of $2,000. 

To effect the change, Rule 7620B 

would be amended as follows. First, the 

text ‘‘with the exception that Retail 

Participants shall not be subject to a 

monthly fee’’ would be deleted from the 

first paragraph. Second, the following 

text would be added to the end of the 

first paragraph: 

The monthly fee will be calculated as 

follows: 

(a) If the participant submits one or more 

trade reports to the FINRA/NYSE Trade 

Reporting Facility during a given calendar 

month, the participant will pay a monthly fee 

equal to the sum of (i) $1,000 plus (ii) 

$0.0055 per published tape report. 

(b) If the participant submits no trade 

reports to the FINRA/NYSE Trade Reporting 

Facility during a given calendar month, the 

participant will pay a monthly fee of $2,000. 

Finally, the current subsections (a) and 

(b), including the table in subsection (b), 

would be deleted. 

The monthly fee would continue to be 

charged at the end of the calendar 

month. As is true now, if a new FINRA/ 

NYSE TRF Participant submitted the 

participant application agreement and 

reported no shares traded in a given 

month, the Participant would not be 

charged the monthly fee for the first two 

calendar months in order to provide 

time to connect to the FINRA/NYSE 

TRF.12 The monthly fees paid by 

FINRA/NYSE TRF Participants would 

continue to include unlimited use of the 

Client Management Tool, as well as full 

access to the FINRA/NYSE TRF and 

supporting functionality, e.g., trade 

submission, reversal and cancellation.13

Application of Proposed Fee Schedule 

The Business Member believes that 

pricing is the key factor for FINRA 

members when choosing which FINRA 

Facility to use. The Business Member 

expects that the proposed change would 

result in a fee increase for most FINRA/ 

NYSE TRF Participants. In this 

competitive environment, FINRA 

members can report their OTC trades in 

NMS stocks to the FINRA/NYSE TRF’s 

competitors if they deem pricing levels 

at the other FINRA Facilities to be more 

favorable, so long as they are 

participants of such other facilities. As 

a result, the Business Member believes 

that the proposed fee change will likely 

reduce its reported volumes. It is not 

possible to fully predict the number of 

FINRA members that would reduce 

their use of the FINRA/NYSE TRF or 

cease being a FINRA/NYSE TRF 

Participant as a result of the fee 

increase. Similarly, it is not possible to 

predict what the change in reporting to 

the FINRA/NYSE TRF would be. 

As stated above, under the proposed 

fee structure, the monthly fee would no 

longer depend on whether a Participant 

were a Retail Participant or its FINRA/ 

NYSE TRF Market Share, and the 

current tiered structure would be 

removed. The proposed fee schedule 

would be applied in the same manner 

to all FINRA members that are, or elect 

to become, FINRA/NYSE TRF 

Participants and would not apply 

differently to different sizes or types of 

Participants. Participants that are 

currently Retail Participants would be 

subject to the same monthly fee for not 

submitting any trade reports in a given 

month as current Non-Retail 

Participants. 

By setting a base flat fee and tying the 

remainder of the fee to the number of 

tape reports a Participant submits to the 

FINRA/NYSE TRF during a given 

month, if any, the Business Member 

believes that the resulting fee would 

relate to the cost of operating and 

maintaining the facility more closely. 

Specifically, the Business Member’s 

total cost of operating the FINRA/NYSE 

TRF does not differ based on whether 

the Participant is a Retail Participant or 

not. As a general matter, the flat 

portions of the proposed fees are 

designed to address the fixed costs, 

while the portion that is charged per 

published tape report is meant to 

address variable costs. The proposed 

rule is designed to have the monthly 

Subscriber Fee Revenue generally cover 

total costs, which would allow the 

FINRA/NYSE TRF to continue operating 

without amassing losses similar to those 

it recently has amassed. 

Tying the fee directly to the number 

of trade reports the Participant submits 

to the FINRA/NYSE TRF during the 

month means that the Participant’s fee 

will increase or decrease in line with 

any changes in the volume of such trade 

reports. This makes the proposed fee 

more directly tied to the Participant’s 

usage of the FINRA/NYSE TRF, 

matching a Participant’s fee with its 

activity and the related costs. For 

example, under the proposal, if a 

Participant submitted 6,000,000 trade 

reports to the FINRA/NYSE TRF during 

one month, it would have a monthly fee 

of $34,000. If it then submitted a lower 

volume of 6,000 trade reports to the 

FINRA/NYSE TRF during the following 

month, its fee would be reduced to 

$1,033. In recent years, there has been 


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14 15 U.S.C. 78o–3(b). 

15 15 U.S.C. 78o–3(b)(5). 

16 15 U.S.C. 78o–3(b)(6). 

17 15 U.S.C. 78o–3(b)(9). 

an increase in the volume of trade 

reports submitted. If that trend should 

abate, the fees would decrease as well. 

Current Retail Participants 

Under the proposed change, there 

would no longer be a distinction 

between Retail Participants and other 

Participants. Based on experience, the 

Business Member believes that most, if 

not all, of the current Retail Participants 

do not report any trades to the FINRA/ 

NYSE TRF during a given month. For 

example, using December 2021 data, 

two of the three current Retail 

Participants were inactive. Currently, all 

Retail Participants are exempt from the 

monthly fee. 

That would change under the 

proposed rule change, as the current 

Retail Participants would become 

subject to a monthly fee. If, like most 

current Retail Participants, a Participant 

submitted no trade reports to the 

FINRA/NYSE TRF during a calendar 

month, it would pay a monthly fee of 

$2,000. Using December 2021 data, the 

two Retail Participants that were 

inactive, under the proposed fee change, 

would be assessed a fee of $2,000 for the 

month (compared to $0 under the 

current fee structure). If a Participant 

submitted one or more trade reports to 

the FINRA/NYSE TRF during a given 

calendar month, the Participant would 

pay a monthly fee equal to the sum of 

(a) $1,000 plus (b) $0.0055 per 

published tape report. The Retail 

Participant that was active in December 

2021 would be assessed a fee of $1,799 

for the month based on its reporting 

activity (compared to $0 under the 

current fee structure). 

Current Non-Retail Participants 

Participants that currently are NonRetail Participants would no longer be 

subject to a fee that varied based on 

their FINRA/NYSE TRF Market Share. 

Rather, they would be subject to the 

same fees as all other Participants, as 

described above. 

To facilitate comparison, the 

following table shows the estimated 

effect of the proposed change on the 

current Non-Retail Participants. 

FINRA/NYSE TRF market share Count of tape reports to FINRA/NYSE TRF Current monthly 

participant fee 

Estimated 

new monthly 

participant fee 

Greater than or equal to 1.25% .............................. More than 25,000 trade reports ............................. $30,000 * $83,598 

Greater than or equal to 1.00% but less than 

1.25%.

More than 25,000 trade reports ............................. 25,000 * 69,828 

Greater than or equal to 0.75% but less than 

1.00%.

More than 25,000 trade reports ............................. 20,000 * 43,156 

Greater than or equal to 0.50% but less than 

0.75%.

More than 25,000 trade reports ............................. 15,000 * 47,815 

Greater than or equal to 0.25% but less than 

0.50%.

More than 25,000 trade reports ............................. 10,000 * 36,793 

Greater than or equal to 0.20% but less than 

0.25%.

More than 25,000 trade reports ............................. 7,500 ** 28,821 

Greater than or equal to 0.10% but less than 

0.20%.

More than 25,000 trade reports ............................. 5,000 * 20,849 

Less than 0.10% ..................................................... More than 25,000 trade reports ............................. 2,000 * 4,559 

n/a ........................................................................... Between 15,001 and 25,000 trade reports ............ 2,000 *** 1,237 

n/a ........................................................................... Between 5,001 and 15,000 trade reports .............. 1,000 * 1,038 

n/a ........................................................................... Between 101 and 5,000 trade reports ................... 750 * 1,010 

n/a ........................................................................... Between 1 and 100 trade reports .......................... 250 * 1,001 

n/a ........................................................................... No trade reports ..................................................... 2,000 2,000 

* Based on the monthly average of published tape reports submitted to the FINRA/NYSE TRF by Participants in the relevant tier for 2021. 

** There was no activity within the tier in 2021. The value represented is the average of the prior tier (greater than or equal to 0.25% but less 

than 0.50%) and the subsequent tier (greater than or equal to 0.10% but less than 0.20%). 

*** There was no activity in this tier in 2021. Estimate assumes the highest number of trade reports in the range. 

Based on the assumptions made in the 

table, current Non-Retail Participants 

that have no trade reports would not see 

a change in their fee, Non-Retail 

Participants with between 15,001 and 

25,000 trade reports would see a 

decrease in their fee, and all other 

current Non-Retail Participants would 

see fee increases. As reflected in the 

table, based on the stated assumptions, 

Non-Retail Participants with fee 

increases would be subject to a monthly 

fee approximately equal to just over one 

to four times their current fee. If there 

were no change in reporting to the 

FINRA/NYSE TRF, such that Non-Retail 

Participants’ reported volume stayed the 

same as it was in the first six months of 

2021, under the proposed fee schedule, 

current Non-Retail Participants that 

have no trade reports would not see a 

change in their fee, but most other 

current Non-Retail Participants would 

see fee increases. 

FINRA has filed the proposed rule 

change for immediate effectiveness. The 

operative date will be June 1, 2022. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b) of the Act,14 in 

general, and Section 15A(b)(5) of the 

Act,15 in particular, 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 also 

believes that the proposed rule change 

is consistent with the provisions of 

Section 15A(b)(6) of the Act,16 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. FINRA also believes that 

the proposed rule change is consistent 

with the provisions of Section 15A(b)(9) 

of the Act,17 which requires that FINRA 

rules not impose any burden on 

competition that is not necessary or 

appropriate. 

As a general matter, the proposed fee 

schedule will be assessed in the same 

manner for all FINRA members that are, 

or elect to become, FINRA/NYSE TRF 


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18The Business Member also notes that Rule 

7610B does not differentiate between Retail and 

Non-Retail Participants. As Rule 7610B would not 

change, all Retail Participants would continue to 

qualify for transaction credits in accordance with 

Rule 7610B as they do now. 

Participants. It will not be applied 

differently to different sizes or types of 

Participants. Access to the FINRA/NYSE 

TRF is offered on fair and nondiscriminatory terms. 

The Proposed Rule Change Is an 

Equitable Allocation of Reasonable Fees 

FINRA believes that the proposed rule 

change provides for an equitable 

allocation of reasonable fees for the 

following reasons. 

The Business Member believes that 

the FINRA/NYSE TRF would incur a 

significant loss if the current fee and 

credit structure remained in place. 

Accordingly, it proposes amendments to 

FINRA Rule 7620B, as discussed herein. 

The Business Member believes that 

the proposed rule change is a reasonable 

amendment to the fee structure to 

address the current rate of losses, which 

if they continued, the Business Member 

believes would make the FINRA/NYSE 

TRF unsustainable in the long term. By 

setting a base flat fee and tying the 

remainder of the fee to the number of 

tape reports a Participant submits to the 

FINRA/NYSE TRF during a given 

month, if any, the Business Member 

believes that the proposed fee structure 

would correlate more closely to the 

manner by which the Business Member 

incurs the total costs associated with 

operating and maintaining the Facility. 

As stated above, as a general matter, the 

flat portions of the proposed fees are 

designed to address the fixed costs, 

while the portion that is charged per 

published tape report is meant to 

address variable costs. The proposed 

rule is reasonably designed to achieve a 

fee structure whereby the monthly fee 

revenue generally covers total costs, 

which would allow the FINRA/NYSE 

TRF to continue operating without 

amassing losses similar to those it 

recently has amassed. 

The Business Member believes that 

partially tying the fee directly to the 

number of trade reports the Participant 

submits to the FINRA/NYSE TRF during 

the month is equitable, because the 

Participant’s fee will increase or 

decrease in line with any changes in the 

number of submitted trade reports. This 

aspect of the fee structure ties the 

proposed fee more directly to the 

Participant’s usage of the FINRA/NYSE 

TRF. In recent years, there has been an 

increase in the number of trade reports 

submitted. If that trend should abate, 

the fees would decrease as well. 

The Business Member also believes 

that it is reasonable and equitable to 

charge a Participant a flat fee even if it 

does not submit any tape reports to the 

FINRA/NYSE TRF during the relevant 

month. First, the FINRA/NYSE TRF 

bears costs for operating the FINRA/ 

NYSE TRF, even when a Participant 

does not submit tape reports during a 

given month. Second, the Business 

Member believes that the fee for 

inactivity during a particular month, 

which has not changed for Non-Retail 

Participants and would now apply to 

Retail Participants, is a reasonable 

method of encouraging all Participants 

to utilize the FINRA/NYSE TRF. 

Currently, all Retail Participants are 

exempt from fees under FINRA Rule 

7620B for reporting to the FINRA/NYSE 

TRF, but would become subject to trade 

reporting fees under the proposed rule 

change. The Business Member believes 

that the proposed rule change would be 

equitable because it would treat all 

Participants the same and the applicable 

fee would no longer depend on whether 

a Participant were a Retail Participant.18

Similarly, the Business Member 

believes that applying the proposed fee 

structure, which is not based on the 

Participant’s market share, also is 

equitable for Participants, including 

Retail Participants. As would be the 

case for a Non-Retail Participant, the 

proposed fee would be tied directly to 

the number of trade reports a Participant 

submits to the FINRA/NYSE TRF during 

the month and would not be tiered 

based on the Participant’s FINRA/NYSE 

TRF Market Share. In this way, the 

proposed fee would be more directly 

tied to a Participant’s access to and 

usage of the FINRA/NYSE TRF. 

Thus, all Participants would be 

subject to monthly fees. The proposed 

fee schedule would be applied in the 

same manner to all firms that are, or 

elect to become, FINRA/NYSE TRF 

Participants. It would not apply 

differently to different sizes of 

Participants. By tying a portion of the 

fee directly to the number of trade 

reports that the Participant submits to 

the FINRA/NYSE TRF during the 

month, a Participant’s trade reporting 

fess would in part correspond with a 

Participant’s activity over the period. 

The Business Member believes that 

the proposed change would 

significantly simplify Rule 7620B, 

removing the distinction between Retail 

Participants and Non-Retail Participants 

and removing the multiple fee tiers in 

current subsection (b). As a result, the 

proposed change would make it easier 

for market participants to determine 

their monthly fee and would add clarity 

to the rules. 

The Proposed Rule Change is Not 

Unfairly Discriminatory 

FINRA believes that the proposed rule 

change is not unfairly discriminatory for 

the following reasons. 

The Business Member believes that 

the FINRA/NYSE TRF would incur a 

significant loss if the current fee 

structure remained in place. 

Accordingly, it proposes to amend the 

fees set forth in FINRA Rule 7620B. By 

so doing, the Business Member has 

proposed a change that it believes is not 

unfairly discriminatory, as it believes 

that the resulting fee would correspond 

more closely with the total costs of 

operating and maintaining the Facility. 

The proposed rule is reasonably 

designed to tie the monthly fee revenue 

to the cost of operating and maintaining 

the FINRA/NYSE TRF, which would 

allow the FINRA/NYSE TRF to continue 

operating without amassing losses 

similar to those it recently has amassed. 

The Business Member believes that it 

is not unfairly discriminatory to charge 

a Participant a flat fee even if it does not 

submit any tape reports to the FINRA/ 

NYSE TRF during a given month. First, 

the FINRA/NYSE TRF bears ongoing 

costs for operating the FINRA/NYSE 

TRF, even when a Participant does not 

submit tape reports in a given month. 

Second, the Business Member believes 

that the inactivity fee, which has not 

changed, is a reasonable method of 

encouraging Participants to utilize the 

FINRA/NYSE TRF. 

The Business Member believes that 

the proposed fee structure is not 

unfairly discriminatory because it 

would not differ for different types of 

Participants, and Retail Participants 

would be subject to the same fee 

structure as Non-Retail Participants. The 

Business Member believes that the 

proposed rule change would not be 

unfairly discriminatory because all 

FINRA member Participants would be 

treated the same. 

Similarly, the Business Member 

believes that applying the proposed fee 

structure, which is not based on the 

Participant’s market share, is not 

unfairly discriminatory. As would be 

the case for a Non-Retail Participant, the 

proposed fee would be tied directly to 

the number of trade reports a Participant 

submits to the FINRA/NYSE TRF during 

the month and would not be tiered 

based on the Participant’s FINRA/NYSE 

TRF Market Share. Rather, the proposed 

fee would be more directly tied to a 

Participant’s access to and usage of the 

FINRA/NYSE TRF Facility. 

By tying a portion of the fee directly 

to the number of trade reports the 

Participant submits to the FINRA/NYSE 


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Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices 18435 

19The FINRA/NYSE TRF does not impose a fee 

on new Participants, and so a FINRA member that 

opts to become a Participant would not incur an 

additional cost from the FINRA/NYSE TRF. In some 

cases, a new Participant may incur incidental costs 

to connect to the FINRA/NYSE TRF, but those are 

not charged by the FINRA/NYSE TRF. An existing 

Participant that ceases to be a Participant is not 

subject to any change fee by the FINRA/NYSE TRF. 

TRF during the month, a Participant 

could reduce its monthly fee simply by 

reducing the volume of such trade 

reports. This makes the proposed fee 

more directly tied to the Participant’s 

usage of the FINRA/NYSE TRF, 

allowing variable fees to better 

correspond with a Participant’s activity 

over the period. 

The Business Member believes that 

the proposed change is not unfairly 

discriminatory because a Participant 

that saw an increase in its monthly fee 

would be able to utilize another FINRA 

Facility. FINRA members can report 

their OTC trades in NMS stocks to the 

FINRA/NYSE TRF’s competitors if they 

deem pricing levels at the other FINRA 

Facilities to be more favorable, so long 

as they are participants of such other 

facilities. 

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. 

Intramarket Competition. For the 

month of December 2021, FINRA 

members used the FINRA/NYSE TRF to 

report approximately 17% of shares in 

NMS stocks traded OTC, compared to 

approximately 83% for the FINRA/ 

Nasdaq TRF. The Business Member 

believes that pricing is the key factor for 

FINRA members when choosing which 

FINRA Facility to use. The Business 

Member expects that the proposed 

change would result in a fee increase for 

most Participants, which in turn could 

result in decreased use of the FINRA/ 

NYSE TRF, if Participants were to shift 

to using other facilities. 

Nonetheless, the Business Member 

does not believe that the proposed rule 

change would result in a burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. Simply put, the 

Business Member believes that the 

proposed change is a rational response 

to increased losses. According to the 

Business Member, in 2020 and 2021, 

costs of operating and maintaining the 

FINRA/NYSE TRF were greater than 

Revenues, causing the FINRA/NYSE 

TRF to run at a loss. According to the 

Business Member, during that time, the 

volume of tape reports increased and 

the total Subscriber Fee Revenue 

decreased. More specifically, compared 

to the 2018 monthly average, as of 

December 31, 2021, monthly average 

tape report activity for the FINRA/NYSE 

TRF had increased by 329% and 

monthly average costs had increased by 

146%. At the same time, monthly 

average Subscriber Fee Revenue had 

decreased by 19%. Net Market Data 

Revenue varied during the period, but 

overall it decreased as compared to the 

first quarter of 2018. Ultimately, the 

Business Member believes that the 

FINRA/NYSE TRF would continue to 

incur a significant loss if the current fee 

and credit structure remained in place. 

The Business Member does not 

believe that such losses are sustainable 

in the long run. Accordingly, it proposes 

to amend the fees set forth in FINRA 

Rule 7620B. By so doing, the Business 

Member has proposed a change that it 

believes should ensure that the monthly 

fees cover the costs of operating and 

maintaining the FINRA/NYSE TRF, 

which would allow it to continue 

operating without amassing losses 

similar to those it currently has. The 

Business Member believes that the 

continued existence of the FINRA/NYSE 

TRF would be an asset to the 

competitive environment. 

The Business Member does not 

believe that the proposed fee would 

place some market participants at a 

relative disadvantage compared to other 

market participants, because the 

proposed fee schedule would be applied 

in the same manner to all FINRA 

members that are, or elect to become, 

FINRA/NYSE TRF Participants. It 

would not apply differently to different 

sizes of Participants. Different types of 

Participants will be treated the same, 

and the amount of the monthly fee 

would no longer depend on whether a 

Participant were a Retail Participant or 

its FINRA/NYSE TRF Market Share. 

As set forth above, if there were no 

change in reporting to the FINRA/NYSE 

TRF such that Participants’ reporting 

volume stayed the same as it was in the 

first six months of 2021, under the 

proposed fee schedule, current NonRetail Participants that have no trade 

reports would not see a change in their 

fee, but most Retail Participants would 

see fee increases. More specifically, 

currently there are three Retail 

Participants that will be impacted and 

would incur fee increases under the 

proposed rule change. Using December 

2021 data, the two Retail Participants 

that were inactive, under the proposed 

fee change, would be assessed a fee of 

$2,000 for the month (compared to $0 

under the current fee structure). The 

Retail Participant that was active in 

December 2021 would be assessed a fee 

of $1,779 for the month based on its 

reporting activity (compared to $0 under 

the current fee structure). The Business 

Member nonetheless believes that the 

proposed fee amendment is reasonable 

in light of the ongoing costs of operating 

and maintaining the FINRA/NYSE TRF 

and as a means of addressing the current 

losses. 

Participants may potentially alter 

their trade reporting activity in response 

to the proposed rule change. 

Specifically, those Participants that 

would incur higher fees may refrain 

from reporting to the FINRA/NYSE TRF 

and may choose to report to another 

FINRA Facility. Alternatively, such 

firms may continue reporting or new 

firms may start reporting to the FINRA/ 

NYSE TRF if they find that the proposed 

net cost of reporting and other 

functionalities provided represent the 

best value to their business.19

Intermarket Competition. The FINRA/ 

NYSE TRF operates in a competitive 

environment. The proposed fee would 

not impose a burden on competition on 

other FINRA Facilities that is not 

necessary or appropriate. The FINRA 

Facilities have different pricing and 

compete for FINRA members’ trade 

report activity. The pricing structures of 

the FINRA/NYSE TRF and other FINRA 

Facilities are publicly available, 

allowing FINRA members to make 

informed decisions regarding which 

FINRA Facility they use to report OTC 

trades in NMS stocks. 

The Business Member represents that 

the FINRA/NYSE TRF would continue 

to incur significant losses if the current 

fee and credit structure remained in 

place, and it does not believe that such 

losses are sustainable in the long run. 

Accordingly, it proposes to amend the 

fees set forth in FINRA Rule 7620B. By 

so doing, the Business Member has 

proposed a change that it believes will 

allow it to continue operating without 

amassing losses similar to those it 

currently has. The Business Member 

believes that its continued existence 

would be an asset to the competitive 

environment. 

FINRA members can choose among 

four FINRA Facilities when reporting 

OTC trades in NMS stocks: The FINRA/ 

NYSE TRF, the two FINRA/Nasdaq 

TRFs, or ADF. FINRA members can 

report their OTC trades in NMS stocks 

to a given FINRA Facility’s competitors 

if they determine that the fees and 

credits of another FINRA Facility are 

more favorable, so long as they are 

participants of such other facility. 


khammond on DSKJM1Z7X2PROD with NOTICES
18436 Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices 

20 15 U.S.C. 78s(b)(3)(A). 

21 17 CFR 240.19b–4(f)(2). 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes on March 1, 2022 (SR–CboeEDGX–2022– 

011). On March 14, 2022, the Exchange withdrew 

that filing and submitted this proposal. 

4Logical Ports include FIX and BOE ports (used 

for order entry), drop logical port (which grants 

users the ability to receive and/or send drop copies) 

and ports that are used for receipt of certain market 

data feeds. 

5Bulk Quoting Capabilities Ports provide users 

with the ability to submit and update multiple bids 

and offers in one message through logical ports 

enabled for bulk-quoting. 

6Purge Ports allow users to submit a cancelation 

for all open orders, or a subset thereof, across 

multiple sessions under the same Executing Firm ID 

(‘‘EFID’’). 

7Spin Ports and GRP Ports are used to request 

and receive a retransmission of data from the 

Exchange’s Multicast PITCH data feeds. 

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 20 and paragraph (f)(2) of Rule 

19b–4 thereunder.21 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–2022–006 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–2022–006. 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– 

2022–006 and should be submitted on 

or before April 20, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06516 Filed 3–29–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94509; File No. SR– 

CboeEDGX–2022–015] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule 

March 24, 2022. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on March 14, 

2022, Cboe EDGX Exchange, Inc. (the 

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

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. 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 

Cboe EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’) is filing with 

the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change to amend its Fee 

Schedule. The text of the proposed rule 

change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

options/regulation/rule_filings/edgx/), 

at the Exchange’s Office of the 

Secretary, 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 

Exchange 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. The 

Exchange 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 

The Exchange proposes to amend its 

fee schedule for its equity options 

platform (‘‘EDGX Options’’) to adopt 

fees for Certification Logical Port fees, 

effective March 1, 2022.3

By way of background, the Exchange 

offers a variety of logical ports, which 

provide users with the ability within the 

Exchange’s System to accomplish a 

specific function through a connection, 

such as order entry, data receipt or 

access to information. Specifically, the 

Exchange offers Logical Ports,4 Logical 

Ports with Bulk Quoting Capabilities,5

Purge Ports,6 GRP Ports and Multicast 

PITCH Server Ports.7 For each type of 

the aforementioned logical ports that is 


khammond on DSKJM1Z7X2PROD with NOTICES