Document ID: SEC-2013-0059-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2013-01-11T05:00Z

[Federal Register Volume 78, Number 8 (Friday, January 11, 2013)]
[Notices]
[Pages 2467-2469]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00351]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68587; File No. SR-NYSE-2012-77]

Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Its Price With Respect to Regulatory Fees Related to the 
Central Registration Depository, Which Are Collected by the Financial 
Industry Regulatory Authority, Inc.

January 4, 2013.
    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 21, 2012, New York Stock Exchange LLC (``NYSE'' 
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 its Price List (the ``Price List'') 
with respect to regulatory fees related to the Central Registration 
Depository (``CRD system''), which are collected by the Financial 
Industry Regulatory Authority, Inc. (``FINRA''). The Exchange proposes 
to implement the fee changes on January 2, 2013. The text of the 
proposed rule change is available on the Exchange's Web site 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 Price List with respect to 
regulatory fees related to the CRD system, which are collected by 
FINRA.\4\ The Exchange proposes to implement the fee changes on January 
2, 2013.
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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 employees of member organizations of the 
Exchange that are not FINRA members (``Non-FINRA

[[Page 2468]]

Member Organizations'').\5\ FINRA recently amended certain of the fees 
assessed for use of the CRD system, and those amendments will become 
effective January 2, 2013.\6\
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    \5\ The Exchange originally adopted fees for use of the CRD 
system in 2001. See Securities Exchange Act Release No. 45112 
(November 28, 2001), 66 FR 63086 (December 4, 2001) (SR-NYSE-2001-
47).
    \6\ See Securities Exchange Act Release No. 67247 (June 25, 
2012), 77 FR 38866 (June 29, 2012) (SR-FINRA-2012-030).
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    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 
Member Organization. Accordingly, the Exchange is proposing to amend 
the Price List to mirror the fees assessed by FINRA, which will be 
implemented concurrently with the amended FINRA fees on January 2, 
2013.\7\ The proposed changes are as follows: \8\
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    \7\ The Exchange notes that it has only adopted the CRD system 
fees charged by FINRA to Non-FINRA Member Organizations 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-only member organizations.
    \8\ Non-FINRA Member Organizations have been charged CRD system 
fees since 2001. See supra note 5. The Exchange is proposing a new 
subheading in the ``Registration & Regulatory Fees'' section of the 
Price List to differentiate between those fees that are applicable 
to all member organizations and those fees that are applicable only 
to Non-FINRA Member Organizations. The Exchange notes that member 
organizations 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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     $100 for each initial Form U4 filed for the registration 
of a representative or principal; \9\
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    \9\ See Section (4)(b)(1) of Schedule A to the FINRA By-laws 
effective on January 2, 2013. This fee is assessed when a Non-FINRA 
Member Organization submits its first Initial, Transfer, Relicense, 
or Dual Registration Form U4 filing on behalf of a registered 
person. The current applicable fee is $85.
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     $110 for 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; \10\
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    \10\ See Section (4)(b)(3) of Schedule A to the FINRA By-laws 
effective on January 2, 2013. The current applicable fee is $95 
related to Form U4 and Form U5. The fee related to Form BD is a new 
fee charged by FINRA. Broker-dealers use Form BD to, among other 
things, report disclosure matters in which they or a control 
affiliate have been involved. Prior to the adoption of the new fee, 
FINRA did not have a fee designed to cover the costs associated with 
the review of Form BD, notwithstanding that the review is similar to 
that performed of broker-dealers' Forms U4 and U5. Such reviews 
include confirming that the matter is properly reported, reviewing 
any documentation submitted and determining whether additional 
documentation is required, conducting any necessary independent 
research and, depending on the matter reported, analyzing whether 
the event or proceeding subjects the individual or firm to a 
statutory disqualification pursuant to Section 3(a)(39) of the Act 
(15 U.S.C. 78c(a)(39). FINRA adopted a $110 fee for the review of a 
Form BD, which mirrors the increased fee adopted for the review of 
Forms U4 and U5. As such, the Exchange is adopting the identical fee 
for FINRA's review of a Form BD submitted by Non-FINRA Member 
Organizations.
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     $15 for processing and posting to the CRD system each set 
of fingerprints submitted electronically to FINRA, plus any other 
charge that may be imposed by the U.S. Department of Justice for 
processing each set of fingerprints; \11\
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    \11\ See Section (4)(b)(4) of Schedule A to the FINRA By-laws 
effective on January 2, 2013. The current applicable fee is $13.
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     $30 for processing and posting to the CRD system each set 
of fingerprint cards submitted in non-electronic format to FINRA, plus 
any other charge that may be imposed by the U.S. Department of Justice 
for processing each set of fingerprints; \12\
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    \12\ See Section (4)(b)(5) of Schedule A to the FINRA By-laws 
effective on January 2, 2013. The current applicable fee is $13.
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     $30 for processing and posting to the CRD system each set 
of fingerprint results and identifying information that have been 
processed through another self-regulatory organization and submitted to 
FINRA; \13\ and
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    \13\ See Section (4)(b)(6) of Schedule A to the FINRA By-laws 
effective on January 2, 2013. The current applicable fee is $13.
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     $45 annually for system processing for each registered 
representative and principal.\14\
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    \14\ See Section (4)(b)(7) of Schedule A to the FINRA By-laws 
effective on January 2, 2013. The current applicable fee is $30. The 
proposed system processing fee would become effective for the 2013 
Renewal Program. In this regard, as part of FINRA's 2013 Renewal 
Program, Preliminary Renewal Statements reflecting the proposed $45 
system processing fee will be made available in the fourth quarter 
of 2012.
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    The Exchange notes that the proposed change is not otherwise 
intended to address any other issues surrounding regulatory fees and 
that the Exchange is not aware of any problems that member 
organizations 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,\15\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\16\ 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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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the change is reasonable because the 
proposed fees are identical to those adopted by FINRA for use of the 
CRD system for disclosure and the registration of FINRA members and 
their associated persons. As FINRA noted in amending its fees, it 
believed that the fees are reasonable based on the increased costs 
associated with operating and maintaining the CRD system, and listed a 
number of enhancements made since the last fee increase, including (1) 
Incorporation of various uniform registration form changes; (2) 
electronic fingerprint processing; (3) Web EFT\TM\, which allows 
subscribing firms to submit batch filings to the CRD system; and (4) 
increases in the number and types of reports available through the CRD 
system. These increased costs are similarly borne by FINRA when a Non-
FINRA Member Organization uses the CRD system. 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 
very 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.
    The Exchange also believes that the change is reasonable because it 
will provide greater specificity regarding the CRD system fees that are 
applicable to Non-FINRA Member Organizations. All similarly situated 
member organizations are subject to the same fee structure, and every 
member organization must use the CRD system for registration and 
disclosure. Accordingly, the Exchange believes that the fees collected 
for such use should likewise increase in lockstep with the fees 
assessed to FINRA members, as is proposed by the Exchange. The proposed 
change, like FINRA's proposal, is equitable and not unfairly 
discriminatory because it will result in the same regulatory fees being 
charged to all member organizations required to report information to 
the CRD system and for services performed by FINRA, regardless of 
whether or not such member organizations are FINRA members.

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 result in the same regulatory 
fees being charged to all member organizations required to report 
information to the CRD system and for services performed by FINRA, 
regardless of whether or not such

[[Page 2469]]

member organizations 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) \17\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \18\ thereunder, because it establishes a due, fee, or other 
charge imposed by NYSE.
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 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.

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-NYSE-2012-77 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2012-77. 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 NYSE's principal office or on the Web 
site at www.nyse.com. 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-NYSE-2012-77, and should be submitted on or before February 1, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00351 Filed 1-10-13; 8:45 am]
BILLING CODE 8011-01-P