Document ID: SEC-2021-1643-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market LLC
Posted Date: 2021-11-23T05:00Z

[Federal Register Volume 86, Number 223 (Tuesday, November 23, 2021)]
[Notices]
[Pages 66604-66606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25478]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93602; File No. SR-NASDAQ-2021-087]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend FINRA Fees

November 17, 2021.
    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 November 8, 2021, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``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 Exchange. 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\ 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 Nasdaq's Pricing Schedule at Equity 
7, Section 30, Registration and Processing Fees, to reflect adjustments 
to FINRA Registration Fees, Fingerprinting Fees and Continuing 
Education Fees.
    While the changes proposed herein are effective upon filing, the 
Exchange has designated the amendments become operative on January 2, 
2022.\3\
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    \3\ See Securities Exchange Act Release No. 90176 (October 14, 
2020), 85 FR 66592 (October 20, 2020) (SR-FINRA-2020-032) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Adjust FINRA Fees To Provide Sustainable Funding for FINRA's 
Regulatory Mission).
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    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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 Exchange included statements

[[Page 66605]]

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
    This proposal amends Nasdaq's Pricing Schedule at Equity 7, Section 
30, Registration and Processing Fees, to reflect adjustments to FINRA 
Registration Fees, Fingerprinting Fees, and Continuing Education 
Fees.\4\ The FINRA fees are collected and retained by FINRA via Web CRD 
for the registration of employees of Nasdaq members that are not FINRA 
members (``Non-FINRA members''). The Exchange is merely listing these 
fees on its Pricing Schedule. The Exchange does not collect or retain 
these fees.
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    \4\ FINRA operates Web CRD, the central licensing and 
registration system for the U.S. securities industry. FINRA uses Web 
CRD to maintain the qualification, employment and disciplinary 
histories of registered associated persons of broker-dealers.
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    The Exchange proposes to amend the title of Equity 7, Section 30 
from ``Registration and Processing Fees'' to ``Regulatory, Registration 
and Processing Fees'' to reflect the pricing within the section.
    Today, Nasdaq Equity 7, Section 30, provides a list of FINRA Fees. 
The Exchange proposes to amend the introductory paragraph to: (1) 
Indicate ``CRD'' is the ``Central Registration Depository'' or ``CRD''; 
(2) add a sentence to make clear that FINRA collects the fees listed 
within Equity 7, Section 30 on behalf of the Exchange; (3) add the 
title ``General Registration Fees:''; and (4) remove the numbering from 
(1) to (3).
    With respect to the General Registration Fees, the Exchange 
proposes to increase the $100 fee to $125 for each initial Form U4 
filed for the registration of a representative or principal. This 
amendment is made in accordance with a recent FINRA rule change to 
adjust to its fees.\5\ The Exchange also proposes to amend the 
description of the $45 registration fee from ``annually for each of the 
member's registered representatives and principals for system 
processing'' to ``FINRA Annual System Processing Fee Assessed only 
during Renewals.'' The proposed new title is more precise.
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    \5\ Id. FINRA noted in its rule change that it was adjusting its 
fees to provide sustainable funding for FINRA's regulatory mission.
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    With respect to the fingerprint processing fees, the Exchange notes 
that the current fees do not reflect the fees assessed by FINRA today. 
The Exchange proposes to amend the current fees to reflect the current 
fees that are assessed by FINRA. The proposed new rule text, with the 
title, ``Fingerprint Processing Fees:'' added, would provide,

Fingerprint Processing Fees:
    $29.50--Initial Submission (Electronic)
    $44.50--Initial Submission (Paper)
    $15.00--Second Submission (Electronic)
    $30.00--Second Submission (Paper)
    $29.50--Third Submission (Electronic)
    $44.50--Third Submission (Paper)
    $30.00--FINRA Processing Fee for Fingerprint Results Submitted by 
Self-Regulatory Organizations other than FINRA.

In 2012, FINRA only offered one set of fees ($27.50 for the initial 
submission, $13.00 for the second submission, and $27.50 for the third 
submission). In 2013, FINRA amended its fingerprint fees and offered 
two sets of fees. For fingerprints submitted on paper card, the fees 
are $44.50 per initial submission, $30.00 per second submission, and 
$44.50 per third submission. For fingerprints submitted electronically, 
the fees are $29.50 per initial submission, $15.00 per second 
submission, and $29.50 per third submission.\6\ By updating the 
fingerprinting fees, the Exchange would properly reflect the fees 
assessed today by FINRA.\7\
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    \6\ See Securities Exchange Act Release No. 67247 (June 25, 
2012) 77 FR 38866 (June 29, 2012) (SR-FINRA-2012-030) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Sections 4 and 6 of Schedule A to the FINRA By-Laws Regarding Fees 
Relating to the Central Registration Depository). FINRA notes in 
this rule change that it is proposing a two-tiered fingerprint 
processing fee structure in part to reflect that the costs 
associated with processing fingerprints submitted via a hard copy 
fingerprint card are much higher than those that are submitted 
electronically. Specifically, fingerprints submitted by a hard copy 
card require additional processing by FINRA, including adding a 
barcode, if necessary, to the card for tracking purposes; scanning 
the fingerprints and converting them to a digital image for 
submission to the FBI; and, for first-time registrants, entering the 
individual's personal and demographic information into the CRD 
system. FINRA noted that members will be able to choose how they 
submit their associated persons' fingerprints and therefore will 
have some control over the fees they incur for fingerprint 
processing. FINRA also noted an FBI Fee of $11.25 is assessed as 
well.
    \7\ See https://www.finra.org/registration-exams-ce/classic-crd/fingerprints/fingerprint-fees.
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    The Exchange is deleting the fees noted within current Equity 7, 
Section 9C [sic] at (4)-(6) and (8).\8\ These fingerprint fees, which 
are proposed to be deleted, were superseded by the FINRA fingerprinting 
fees which were adopted in 2013.
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    \8\ The Exchange proposes to delete the following rule text:
    (4) $15 for processing and posting to the CRD system each set of 
fingerprints submitted electronically by the member, plus a pass-
through of any other charge imposed by the United States Department 
of Justice for processing each set of fingerprints;
    (5) $30.00 for processing and posting to the CRD system each set 
of fingerprint cards submitted in non-electronic format by the 
member to FINRA, plus any other charge that may be imposed by the 
United States Department of Justice for processing each set of 
fingerprints;
    (6) $30 for processing and posting to the CRD system each set of 
fingerprint results and identifying information that has been 
processed through a self-regulatory organization other than NASD; 
and
    (8) $110 for the additional processing of each initial or 
amended Form BD that includes the initial reporting, amendment, or 
certification of one or more disclosure events or proceedings.
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    The Exchange proposes to add a new title, ``Continuing Education 
Fee:'' and proposes to provide an introductory paragraph to those fees 
that states, ``The Continuing Education Fee will be assessed as to each 
individual who is required to complete the Regulatory Element of the 
Continuing Education Requirements pursuant to Exchange General 4, 
Section 1240. This fee is paid directly to FINRA.'' The incorrect 
citation to Nasdaq Rule 1240 is being removed from the current rule 
text. Also, the Exchange proposes to cite the appropriate 
registrations, namely S101 and S201.
    The FINRA Web CRD 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 member. Accordingly, the proposed fees mirror those currently 
assessed by FINRA.
2. Statutory Basis
    The Exchange believes that its proposal 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) of the Act,\10\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility, and is 
not designed to permit unfair discrimination 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) and (5).
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    The Exchange believes it is reasonable to increase the $100 fee for 
each initial Form U4 filed for the registration of a

[[Page 66606]]

representative or principal to $125 in accordance with an adjustment to 
FINRA's fees.\11\ The Exchange's rule text will reflect the current 
registration rate that will be assessed by FINRA as of January 2, 2022. 
Additionally, making clear that FINRA, on behalf of the Exchange, will 
bill and collect these fees will bring greater transparency to its 
fees. Amending the title of the $45 fee to be more precise will provide 
greater transparency to this fee. Updating FINRA's fingerprint 
processing fees to reflect the current charges will bring greater 
transparency to these charges that are currently assessed and collected 
by FINRA. Also, referencing the rule which governs the Regulatory 
Element of the Continuing Education Requirements and, noting that the 
fee is paid directly to FINRA, will provide more information to members 
regarding the fees for Continuing Education. The proposed fees are 
identical to those adopted by FINRA for use of Web CRD for disclosure 
and the registration of FINRA members and their associated persons. 
These costs are borne by FINRA when a Non-FINRA member uses Web CRD.
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    \11\ See note 3 above.
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    The Exchange believes that its proposal to increase the $100 fee 
for each initial Form U4 filed for the registration of a representative 
or principal to $125 is equitable and not unfairly discriminatory as 
the amendment will reflect the current fee that will be assessed by 
FINRA to all members who require Form U4 filings as of January 2, 2022. 
Amending the title of the $45 fee to be more precise will provide 
greater transparency to this fee. Updating the fingerprint processing 
fees to reflect the current fees is equitable and not unfairly 
discriminatory as FINRA currently assesses these rates to all members. 
Finally, making clear that FINRA, on behalf of the Exchange, will bill 
and collect these fees and referencing the rule which governs the 
Continuing Education Requirements will bring greater transparency to 
FINRA's fees. Further, the proposal is also equitable and not unfairly 
discriminatory because the Exchange will not be collecting or retaining 
these fees, therefore, the Exchange will not be in a position to apply 
them in an inequitable or unfairly discriminatory manner.

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 not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange believes that its 
proposal to increase the $100 fee for each initial Form U4 filed for 
the registration of a representative or principal to $125 does not 
impose an undue burden on competition as the amendment will reflect the 
current fee that will be assessed by FINRA to all members who require 
Form U4 filings as of January 2, 2022. Amending the title of the $45 
fee to be more precise will provide greater transparency to this fee. 
Updating the fingerprint processing fees to reflect the current fees 
does not impose an undue burden on competition as FINRA currently 
assesses these rates to all members. Finally, making clear that FINRA, 
on behalf of the Exchange, will bill and collect these fees and 
referencing the rule which governs the Continuing Education 
Requirements will bring greater transparency to FINRA's fees. Further, 
the proposal does not impose an undue burden on competition because the 
Exchange will not be collecting or retaining these fees, therefore, the 
Exchange will not be in a position to apply them in an inequitable or 
unfairly discriminatory manner.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or 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) of the Act.\12\
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    \12\ 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: (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 [email protected]. Please include 
File Number SR-NASDAQ-2021-087 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-NASDAQ-2021-087. 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-NASDAQ-2021-087, and should be submitted 
on or before December 14, 2021.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
J. Matthew DeLesDernier
Assistant Secretary.
[FR Doc. 2021-25478 Filed 11-22-21; 8:45 am]
BILLING CODE 8011-01-P