Document ID: SEC-2015-1141-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2015-07-10T04:00Z

[Federal Register Volume 80, Number 132 (Friday, July 10, 2015)]
[Notices]
[Pages 39818-39820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16859]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75364; File No. SR-FINRA-2015-024]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend FINRA Rule 7650A Relating to Submission 
of Billing Disputes by FINRA/Nasdaq Trade Reporting Facility 
Participants

July 6, 2015.
    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 July 1, 2015, 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 and 
II below, which Items have been prepared by FINRA. FINRA has designated 
the proposed rule change as constituting a ``non-controversial'' rule 
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    FINRA is proposing to amend FINRA Rule 7650A (Collection of Fees) 
to require FINRA members that are FINRA/Nasdaq Trade Reporting Facility 
(``FINRA/Nasdaq TRF'') participants to submit billing disputes within 
sixty days of receipt of the invoice to the FINRA/Nasdaq TRF. The 
proposed rule change also would rename Rule 7650A as ``Collection of 
Fees and Billing Policy.''
    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 FINRA/Nasdaq TRF is a facility of FINRA that is operated by The 
NASDAQ OMX Group, Inc. (``NASDAQ OMX''). In connection with the 
establishment of the FINRA/Nasdaq TRF, FINRA and NASDAQ OMX entered 
into a limited liability company agreement (the ``LLC Agreement''). 
Under the LLC Agreement, FINRA, the ``SRO Member,'' has sole regulatory 
responsibility for the FINRA/Nasdaq TRF. NASDAQ OMX, the ``Business 
Member,'' is primarily responsible for the management of the FINRA/
Nasdaq TRF's business affairs to the extent those affairs are not 
inconsistent with the regulatory and oversight functions of FINRA. As 
such, the Business Member establishes pricing for use of the FINRA/

[[Page 39819]]

Nasdaq TRF, and such pricing is implemented pursuant to FINRA rules 
that must be filed with the SEC and be consistent with the Act. In 
addition, the Business Member is obligated to pay the cost of 
regulation and is entitled to the profits and losses, if any, derived 
from the operation of the FINRA/Nasdaq TRF.
    Pursuant to the FINRA Rule 7600A Series, FINRA members that are 
FINRA/Nasdaq TRF participants are charged fees (Rule 7620A) and also 
may qualify for credits for trade reporting to the FINRA/Nasdaq TRF 
(Rule 7610A). These rules are administered by NASDAQ OMX, in its 
capacity as the ``Business Member'' and operator of the FINRA/Nasdaq 
TRF on behalf of FINRA,\4\ and NASDAQ OMX collects all fees on behalf 
of the FINRA/Nasdaq TRF.
---------------------------------------------------------------------------

    \4\ FINRA's oversight of this function performed by the Business 
Member is conducted through a recurring assessment and review of TRF 
operations by an outside independent audit firm.
---------------------------------------------------------------------------

    On June 23, 2015, FINRA filed a proposed rule change to adopt Rule 
7650A to require FINRA members that are FINRA/Nasdaq TRF participants 
to provide a clearing account number for an account at National 
Securities Clearing Corporation (``NSCC'') to the FINRA/Nasdaq TRF for 
purposes of permitting NASDAQ OMX, on behalf of the FINRA/Nasdaq TRF, 
to debit any undisputed or final fees due and owing under the FINRA 
Rule 7600A Series relating to the FINRA/Nasdaq TRF.\5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 75339 (June 30, 
2015) (Notice of Filing and Immediate Effectiveness; File No. SR-
FINRA-2015-021).
---------------------------------------------------------------------------

    FINRA is proposing to amend Rule 7650A to add a new paragraph (b) 
to require all billing disputes to be submitted to the FINRA/Nasdaq TRF 
in writing \6\ and accompanied by supporting documentation within sixty 
days of receipt of an invoice. This process is expected to conserve 
resources, which are expended when untimely billing disputes require 
research of applicable fees and other information beyond two months 
after the invoice was issued. The proposed billing policy would apply 
only to fees due and owing by the member under the Rule 7600A Series. 
FINRA notes that the same policy with respect to billing disputes is in 
place today for NASDAQ Options Market (``NOM'') Participants \7\ and 
has been proposed for NASDAQ equity participants relating to exchange 
fees and charges under Nasdaq Stock Market rules, effective July 1, 
2015.\8\ FINRA also is proposing to rename Rule 7650A as ``Collection 
of Fees and Billing Policy.''
---------------------------------------------------------------------------

    \6\ The invoice specifies the contact person(s) to whom to 
address billing disputes.
    \7\ See NOM Rules at Chapter XV, Section 7, entitled ``NASDAQ 
Options Fee Disputes.''
    \8\ See Securities Exchange Act Release No. 74895 (May 7, 2015), 
80 FR 27352 (May 13, 2015) (Notice of Filing and Immediate 
Effectiveness; File No. SR-NASDAQ-2015-050).
---------------------------------------------------------------------------

    FINRA has filed the proposed rule change for immediate 
effectiveness and requested waiver of the 30-day operative delay. FINRA 
proposes that the proposed rule change will become operative on July 1, 
2015. The proposed billing policy would apply to invoices for trade 
reporting activity occurring in July 2015 and thereafter.\9\
---------------------------------------------------------------------------

    \9\ The proposed billing policy would not apply to invoices 
related to June 2015 (or prior) billing.
---------------------------------------------------------------------------

2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\10\ 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. Consistent with SR-NASDAQ-2015-050, the proposed 
requirement that billing disputes under the Rule 7600A Series be 
submitted to the FINRA/Nasdaq TRF within sixty days from receipt of the 
invoice would set an objective standard and would be fair and applied 
uniformly to all members that are FINRA/Nasdaq TRF participants. In 
addition, consistent with SR-NASDAQ-2015-050, sixty days is ample time 
for members to review an invoice and dispute any billing related to 
trade reporting activity for that time period. As noted above, an 
identical billing policy applies today with respect to NOM participants 
and has been proposed for NASDAQ equity participants.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

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. As described above, and 
consistent with the LLC Agreement, the proposed billing policy is 
identical to the billing policy NASDAQ OMX currently has in place for 
NOM participants and is also identical to the billing policy proposed 
by Nasdaq for Nasdaq equity participants under Nasdaq Stock Market 
rules. As the Business Member, NASDAQ OMX has the obligation of 
assessing the potential impacts of the proposed billing policy in its 
own rulemaking. FINRA notes that Nasdaq's billing policy was subject to 
proposed rule changes filed by Nasdaq with the Commission.\11\
---------------------------------------------------------------------------

    \11\ See, e.g., Securities Exchange Act Release No. 74895 (May 
7, 2015), 80 FR 27352 (May 13, 2015) (Notice of Filing and Immediate 
Effectiveness; File No. SR-NASDAQ-2015-050).
---------------------------------------------------------------------------

    Consistent with SR-NASDAQ-2015-050, the proposed billing policy 
would apply uniformly to all members that are FINRA/Nasdaq TRF 
participants, as it does today with NOM participants and as proposed 
for Nasdaq equity participants. In addition, consistent with SR-NASDAQ-
2015-050, the proposed billing policy would conserve FINRA/Nasdaq TRF 
resources, which are expended when untimely billing disputes require 
staff to research applicable fees and other information beyond two 
months after the invoice is issued.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative before 30 days from the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
---------------------------------------------------------------------------

    \14\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    FINRA has asked the Commission to waive the 30-day operative delay. 
The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
The proposed rule change proposes a billing policy that is identical to 
the billing policy proposed by Nasdaq relating to fees under Nasdaq 
Stock Market rules pursuant to SR-NASDAQ-2015-050. The operative date

[[Page 39820]]

of proposed rule change SR-NASDAQ-2015-050 is July 1, 2015. FINRA 
believes, and the Commission agrees, that it would be more efficient to 
implement the billing policy under this proposed rule change on the 
same date as the billing policy under SR-NASDAQ-2015-050, rather than 
on a piecemeal basis. Therefore, the Commission hereby waives the 30-
day operative delay and designates the proposed rule change to be 
operative upon filing with the Commission.\15\
---------------------------------------------------------------------------

    \15\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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-2015-024 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-2015-024. 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 Web site (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 Web site 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 offices of FINRA. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-FINRA-2015-024, and should 
be submitted on or before July 31, 2015

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-16859 Filed 7-9-15; 8:45 am]
 BILLING CODE 8011-01-P