Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Notices 69937 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 34–72833 

(August 13, 2014), 79 FR 48797 (August 18, 2014) 

(SR–CME–2014–31). 

4Securities Exchange Act Release No. 34–73275 

(October 1, 2014), 79 FR 60563 (October 7, 2014) 

(SR–CME–2014–31). On August 18, 2014, CME filed 

Amendment No. 1 to the proposed rule change. 

CME withdrew Amendment No. 1 on August 29, 

2014. 

5Securities Exchange Act Release No. 34–73290 

(October 2, 2014), 79 FR 60873 (October 8, 2014) 

(SR–CME–2014–31). 

6 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5FINRA’s primary member regulatory pricing 

structure also includes the Trading Activity Fee, the 

Personnel Assessment (‘‘PA’’) and the Branch Office 

Assessment, as well as the processing of new and 

continuing membership applications. 

6Schedule A to the FINRA By-Laws defines gross 

revenue for assessment purposes as total income as 

reported on FOCUS form Part II or IIA, excluding 

commodities income. 

7See Securities Exchange Act Release No. 61042 

(November 20, 2009), 74 FR 62616 (November 30, 

2009) (Order Approving File No. SR–FINRA–2009– 

057). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73626; File No. SR–CME– 

2014–31] 

Self-Regulatory Organizations; 

Chicago Mercantile Exchange Inc.; 

Notice of Withdrawal of Proposed Rule 

Change Related to Clearing of Certain 

iTraxx Europe Index Untranched CDS 

Contracts on Indices Administered by 

Markit 

November 18, 2014. 

On August 11, 2014, Chicago 

Mercantile Exchange Inc. (‘‘CME’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 1 and Rule 19b– 

4 thereunder,2 a proposed rule change 

(SR–CME–2014–31) seeking to enable 

CME to offer clearing of certain iTraxx 

Europe index untranched CDS contracts 

on indices administered by Markit 

(‘‘iTraxx Contracts’’). Specifically, the 

proposed rule change would update 

CME’s CDS Product Rules to provide for 

the clearing of the iTraxx Contracts. 

Notice of the proposed rule change was 

published in the Federal Register on 

August 18, 2014.3 Notice of Amendment 

No. 2 to the proposed rule change was 

published in the Federal Register on 

October 1, 2014.4 The Commission did 

not receive comments on the proposal. 

On October 2, 2014, the Commission 

extended the time period in which to 

either approve the proposed rule 

change, disapprove the proposed rule 

change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change to November 16, 

2014.5 On November 14, 2014, CME 

withdrew the proposed rule change 

(SR–CME–2014–31). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27704 Filed 11–21–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73632; File No. SR–FINRA– 

2014–046] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Modify the Gross 

Income Assessment Pricing Structure 

November 18, 2014. 

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 November 

7, 2014, Financial Industry Regulatory 

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

Securities and Exchange Commission 

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

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by FINRA. FINRA has 

designated the proposed rule change as 

‘‘establishing or changing a due, fee or 

other charge’’ under Section 

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

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

proposal effective upon receipt of this 

filing by the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

II. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to modify the 

Gross Income Assessment pricing 

structure in Section 1(c) of Schedule A 

to the FINRA By-Laws. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

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

office of FINRA and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. FINRA has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for,the Proposed Rule 

Change 

1. Purpose 

The proposed rule change is intended 

to provide limited relief from the Gross 

Income Assessment (‘‘GIA’’) for some 

smaller FINRA members due to the 

unanticipated effect of a 2009 change to 

the method of calculating the 

assessment. The GIA is one of a few 

primary revenue sources that funds 

FINRA’s regulatory operations 5 and is 

based on a firm’s annual gross revenue.6

In 2008, FINRA established a seven-tier 

rate structure to assess the GIA, with a 

minimum assessment of $1,200. The 

tiered rates, which have remained 

unchanged, are as follows: 

(1) $1,200.00 on annual gross revenue 

up to $1 million; 

(2) 0.1215% of annual gross revenue 

greater than $1 million up to $25 

million; 

(3) 0.2599% of annual gross revenue 

greater than $25 million up to $50 

million; 

(4) 0.0518% of annual gross revenue 

greater than $50 million up to $100 

million; 

(5) 0.0365% of annual gross revenue 

greater than $100 million up to $5 

billion; 

(6) 0.0397% of annual gross revenue 

greater than $5 billion up to $25 billion; 

and 

(7) 0.0855% of annual gross revenue 

greater than $25 billion. 

As a result of this structure, GIA 

revenues are derived overwhelmingly 

from medium-sized and larger firms. 

Due to rebates, firms with revenues of 

$1 million or less effectively have paid 

no GIA since 2008. 

In November 2009, the Commission 

approved changes to the GIA and PA 

intended to help FINRA achieve a more 

consistent and predictable funding 

stream to carry out its regulatory 

mandate.7 The economic and industry 

downturns in 2008 and 2009 had 

exposed FINRA’s vulnerability to yearto-year volatility in members’ gross 

revenues. GIA revenues in 2009 

dropped precipitously due to write-offs 


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