Document ID: SEC-2022-0035-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2022-01-11T05:00Z

[Federal Register Volume 87, Number 7 (Tuesday, January 11, 2022)]
[Notices]
[Pages 1451-1453]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-00262]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93900; File No. SR-NYSEARCA-2021-104]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE 
Arca Equities Fees and Charges With Respect to a Regulatory Fee Related 
to the Central Registration Depository

January 5, 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 22, 2021, 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, 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

    The Exchange proposes to amend the NYSE Arca Equities Fees and 
Charges (the ``Fee Schedule'') with respect to a regulatory fee related 
to the Central Registration Depository (``CRD system''), which is 
collected by the Financial Industry Regulatory Authority, Inc. 
(``FINRA''). The Exchange proposes to implement the fee change on 
January 2, 2022. The proposed rule change is

[[Page 1452]]

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 Exchange proposes to amend the Fee Schedule with respect to a 
regulatory fee collected by FINRA for use of the CRD system.\4\ The 
Exchange proposes to implement the fee change on January 2, 2022.
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    \4\ 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.
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    FINRA collects and retains certain regulatory fees via the CRD 
system for the registration of associated persons of ETP Holders that 
are not FINRA members (``Non-FINRA ETP Holders'').\5\ The CRD system 
fees are user-based, and there is no distinction in the cost incurred 
by FINRA if the user is a FINRA member or a Non-FINRA ETP Holder.
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    \5\ The Exchange originally adopted fees for use of the CRD 
system in 2005 and amended those fees in 2013. See Securities 
Exchange Act Release Nos. 51641 (May 2, 2005), 70 FR 24155 (May 6, 
2005) (SR-PCX-2005-49); 68588 (January 4, 2013), 78 FR 2473 (January 
11, 2013) (SR-NYSEArca-2012-143). While the Exchange lists these 
fees in its Fee Schedule, it does not collect or retain these fees.
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    FINRA recently amended one of the fees assessed for use of the CRD 
system.\6\ Accordingly, the Exchange proposes to amend the Fee Schedule 
to mirror the fee assessed by FINRA, which will be implemented 
concurrently with the amended FINRA fee on January 2, 2022.\7\ 
Specifically, the Exchange proposes to amend the Fee Schedule to modify 
the fee charged to Non-FINRA ETP Holders for each initial Form U4 filed 
for the registration of a representative or principal from $100 to 
$125.\8\
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    \6\ See Securities Exchange Act Release No. 90176 (October 14, 
2020), 85 FR 66592 (October 20, 2020) (SR-FINRA-2020-032).
    \7\ The Exchange notes that it has only adopted the CRD system 
fees charged by FINRA to Non-FINRA ETP Holders when such fees are 
applicable. In this regard, certain FINRA CRD system fees and 
requirements are specific to FINRA members, but do not apply to NYSE 
Arca-only ETP Holders. Non-FINRA ETP Holders have been charged CRD 
system fees since 2005. See note 5, supra. ETP Holders that are also 
FINRA members are charged CRD system fees according to Section 4 of 
Schedule A to the FINRA By-Laws.
    \8\ See Section 4(b)(1) of Schedule A to the FINRA By-Laws 
effective on January 2, 2022. This fee is assessed when a Non-FINRA 
ETP Holder submits an initial Uniform Application for Securities 
Industry Regulation or Transfer (known as a ``Form U4'') filed by a 
member in the CRD system to register an individual.
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    The Exchange notes that the proposed change is not otherwise 
intended to address any other issues surrounding regulatory fees, and 
the Exchange is not aware of any problems that ETP Holders would have 
in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\9\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5),\10\ in particular, because 
it provides for the equitable allocation of reasonable dues, fees, and 
other charges among its members, issuers, and other persons using its 
facilities and does not unfairly discriminate between customers, 
issuers, brokers, or dealers.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) & (5).
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    The Exchange believes that the proposed fee change is reasonable 
because the fee will be identical to that adopted by FINRA as of 
January 2, 2022 for use of the CRD system to submit a Form U4. The 
costs of operating and improving the CRD system are similarly borne by 
FINRA when a Non-FINRA ETP Holder uses the CRD system; accordingly, the 
fees collected for such use should, as proposed by the Exchange, mirror 
the fees assessed to FINRA members. In addition, as FINRA noted in 
amending its fees, it believes that its proposed pricing structure is 
reasonable and correlates fees with the components that drive its 
regulatory costs to the extent feasible.
    The Exchange also believes that the proposed fee change provides 
for the equitable allocation of reasonable fees and other charges, and 
does not unfairly discriminate between customers, issuers, brokers, and 
dealers. The fee applies equally to all individuals and firms required 
to report information to the CRD system, and the proposed change will 
result in the same regulatory fee being charged to all ETP Holders 
required to report information to the CRD system and for services 
performed by FINRA regardless of whether such ETP Holders are FINRA 
members. Accordingly, the Exchange believes that the fee collected for 
such use should increase in lockstep with the fee adopted by FINRA as 
of January 2, 2022, as is proposed by the Exchange.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Specifically, the Exchange 
believes that the proposed change will reflect the fee that will be 
assessed by FINRA for Form U4 filings as of January 2, 2022 and will 
thus result in the same regulatory fees being charged to all ETP 
Holders required to report information to the CRD system and for 
services performed by FINRA, regardless of whether or not such ETP 
Holders are FINRA members.

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) \11\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \12\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
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    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) \13\ of the Act to determine whether the proposed 
rule

[[Page 1453]]

change should be approved or disapproved.
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    \13\ 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-NYSEARCA-2021-104 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-2021-104. 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-NYSEARCA-2021-104 and should be 
submitted on or before February 1, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00262 Filed 1-10-22; 8:45 am]
BILLING CODE 8011-01-P