Document ID: SEC-2022-1628-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Investors Exchange, LLC
Posted Date: 2022-12-21T05:00Z

[Federal Register Volume 87, Number 244 (Wednesday, December 21, 2022)]
[Notices]
[Pages 78136-78138]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27653]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96506; File No. SR-IEX-2022-13]

Self-Regulatory Organizations: Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend its 
Fee Schedule To Reflect Adjustments to FINRA's Registration Fees 
Related to the Central Registration Depository

December 15, 2022.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on December 13, 2022, the Investors Exchange LLC (``IEX'' 
or the ``Exchange'') 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 self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Pursuant to the provisions of Section 19(b)(1) under the Act, and 
Rule 19b-4 thereunder, IEX is filing with the Commission a proposed 
rule change pursuant to IEX Rule 15.110(a) to amend its Fee Schedule to 
reflect adjustments to FINRA's Registration Fees related to the Central 
Registration Depository, which will be collected by FINRA. The Exchange 
has designated this proposal as establishing or changing a due, fee, or 
other charge imposed by the self-regulatory organization, whether or 
not the person is a member of the self-regulatory organization, which 
renders the proposed rule change effective upon filing, pursuant to 
Section 19(b)(3(A)(ii) of the Act.\4\
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    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    The text of the proposed rule change is available at the Exchange's 
website at www.iextrading.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 these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
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
    IEX is proposing, pursuant to IEX Rule 15.110(a), to amend its Fee 
Schedule \5\ to reflect adjustments to FINRA's Registration Fees and 
Fingerprinting Fees in connection with the Central Registration 
Depository (``CRD system'').\6\ The FINRA fees are

[[Page 78137]]

collected and retained by FINRA via Web CRD for the registration of 
employees of IEX Members who are not FINRA members. Because FINRA 
separately collects the CRD system fee for any IEX Member \7\ that is 
also a FINRA member,\8\ this fee filing only applies to IEX Members who 
are not FINRA members.
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    \5\ See https://exchange.iex.io/resources/trading/fee-schedule/.
    \6\ The CRD system is the central licensing and registration 
system for the U.S. securities industry. The CRD system enables 
individuals and firms seeking registration with multiple states and 
self-regulatory organizations to do so by submitting a single form, 
fingerprint card and a combined payment of fees to FINRA. Through 
the CRD system, FINRA maintains the qualification, employment and 
disciplinary histories of registered associated persons of broker 
dealers.
    \7\ See IEX Rule 1.160(s).
    \8\ IEX Members that are also FINRA members are charged CRD 
system fees according to Section (4) of Schedule A to the FINRA By-
Laws.
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    Effective January 2, 2023, FINRA expects to increase (1) from $110 
to $155 the fee it charges for the additional processing of each 
initial or amended Form U4, Form U5 or Form BD that includes the 
initial reporting, amendment, or certification of one or more 
disclosure events or proceedings; (2) from $45 to $70 the annual fee 
for each of the Member's registered representatives and principals for 
system processing; and (3) from $15 to $20 the fee \9\ for processing 
and posting to the CRD system each set of fingerprint cards submitted 
electronically by the Member.\10\ Accordingly, IEX is proposing to 
update the corresponding fees on its Fee Schedule to reflect the new 
FINRA processing fees. IEX proposes to have these new fees take effect 
starting January 2, 2023. Because these costs are borne by FINRA when a 
non-FINRA member uses the CRD system, FINRA will continue to collect 
and retain these fees for the registration of associated persons of IEX 
Members that are not also FINRA members.
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    \9\ This increase is in addition to a pass-through of any other 
charge imposed by the United States Department of Justice for 
processing each set of fingerprints. The FBI fingerprint charge is 
currently $11.25. See Securities Exchange Act Release No. 67247 
(June 25, 2012) 77 FR 38866 (June 29, 2012) (SR-FINRA-2012-030).
    \10\ See Securities Exchange Act Release No. 90176 (October 14, 
2020), 85 FR 66592 (October 20, 2020) (SR-FINRA-2020-032) (``FINRA 
Fee Filing'').
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2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the 
provisions of Section 6(b) of the Act,\11\ of the Act in general, and 
furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\12\ 
in particular, in that it provides for the equitable allocation of 
reasonable fees and other charges among its members, and does not 
unfairly discriminate between customers, issuers, brokers and dealers. 
All similarly situated Members are subject to the same fee structure, 
and every Member firm must use the CRD system for registration and 
disclosure.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4) and (5).
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    The proposed fee is reasonable because it is identical to the fee 
adopted by FINRA for use of the Web CRD system for disclosure and the 
registration of associated persons of FINRA members.\13\ Thus, the 
Exchange's Fee Schedule will reflect the current registration rate that 
will be assessed by FINRA as of January 2, 2023 for any IEX Members 
that are not also FINRA members. IEX also believes the proposed fee 
change is reasonable, because, as noted in the FINRA Fee Filing, FINRA 
is increasing the CRD system fees to provide enough revenue to support 
its regulatory mission.\14\
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    \13\ See supra note 10.
    \14\ See supra note 10.
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    The Exchange believes that its proposal to increase (1) from $110 
to $155 the fee it charges for the additional processing of each 
initial or amended Form U4, Form U5 or Form BD that includes the 
initial reporting, amendment, or certification of one or more 
disclosure events or proceedings; (2) from $45 to $70 the annual fee 
for each of the Member's registered representatives and principals for 
system processing; and (3) from $15 to $20 the fee for processing and 
posting to the CRD system each set of fingerprint cards submitted 
electronically by the Member is equitable and not unfairly 
discriminatory because the equivalent fees will be charged by FINRA of 
all users of the CRD system, whether or not they are FINRA members.\15\ 
Therefore, all users of the CRD system will equally bear the cost of 
maintaining the system.\16\
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    \15\ Because the Exchange will not be collecting or retaining 
these fees, therefore, the Exchange will also not be in a position 
to apply them in an inequitable or unfairly discriminatory manner.
    \16\ See supra note 10.
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    FINRA further noted its belief that the proposed fees are 
reasonable because they help to ensure the integrity of the information 
in the CRD system, which is important because the Commission, FINRA, 
other self-regulatory organizations and state securities regulators use 
the CRD system to make licensing and registration decisions, among 
other things.\17\
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    \17\ See supra note 10.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    IEX 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, as amended. Specifically, the 
Exchange believes that the proposed fees will result in the same 
regulatory fees being charged to all Members required to report 
information to the CRD system and for services performed by FINRA, 
regardless of whether or not such Members are FINRA members.

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)(ii) \18\ of the Act.
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    \18\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    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 under 
Section 19(b)(2)(B) \19\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \19\ 15 U.S.C. 78s(b)(2)(B).
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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 [email protected]. Please include 
File Number SR-IEX-2022-13 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-IEX-2022-13. This file 
number should be included on the subject line if email is used. To help 
the

[[Page 78138]]

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 will also be available for inspection 
and copying at the IEX's principal office and on its internet website 
at www.iextrading.com. 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-IEX-2022-13 
and should be submitted on or before January 11, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27653 Filed 12-20-22; 8:45 am]
BILLING CODE 8011-01-P