Document ID: SEC-2022-1542-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq PHLX, LLC
Posted Date: 2022-11-25T05:00Z

[Federal Register Volume 87, Number 226 (Friday, November 25, 2022)]
[Notices]
[Pages 72550-72552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25670]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96360; File No. SR-Phlx-2022-47]

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

November 18, 2022.
    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 November 14, 2022, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed 
with the Securities

[[Page 72551]]

and Exchange Commission (``SEC'' or ``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 Phlx's Pricing Schedule at Options 
7, Section 9, Other Member Fees, to reflect adjustments to FINRA 
Registration Fees and Fingerprinting Fees.\3\
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    \3\ This rule change impacts FINRA fees for members who trade 
equity and options products on Phlx. Equity 7, Section 4.B. 
indicates that a list of fees that will be collected and retained by 
FINRA via the Web CRD registration system for the registration of 
associated persons of Exchange members that are not also FINRA 
members is available within Options 7, Section 9C.
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    While the changes proposed herein are effective upon filing, the 
Exchange has designated the additional processing of each initial or 
amended Form U4, Form U5 or Form BD and electronic Fingerprint 
Processing Fees to become operative on January 2, 2023. Additionally, 
the Exchange designates that the FINRA Annual System Processing Fee 
Assessed only during Renewals become operative on January 2, 2024.\4\ 
The amendments to the paper Fingerprint Fees are immediately effective.
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    \4\ 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/phlx/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 
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 Phlx's Pricing Schedule at Options 7, Section 
9, Other Member Fees, to reflect adjustments to FINRA Registration Fees 
and Fingerprinting Fees.\5\ The FINRA fees are collected and retained 
by FINRA via Web CRD for the registration of employees of Phlx members 
and member organizations that are not FINRA members (``Non-FINRA 
members''). The Exchange is merely listing these fees on its Pricing 
Schedule at Phlx Options 7, Section 9C. The Exchange does not collect 
or retain these fees.
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    \5\ 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: (1) the $110 fee for the additional 
processing of each initial or amended Form U4, Form U5 or Form BD that 
includes the initial reporting, amendment, or certification or one or 
more disclosure events or proceedings to $155; (2) the $45 FINRA Annual 
System Processing Fee Assessed only during Renewals to $70; and (3) the 
$15 Second Submission (Electronic) Fingerprint Processing Fee to $20. 
Each of these fees are listed within Phlx Options 7, Section 9C. These 
amendments are being made in accordance with a FINRA rule change to 
adjust to its fees.\6\
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    \6\ See note 4. 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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    The Exchange also proposes to amend the following Fingerprint Fees: 
(1) the $29.50 Initial Submission (Electronic) fee to $31.25; \7\ (2) 
the $44.50 Initial Submission (Paper) fee to $41.25; \8\ (3) the $29.50 
Third Submission (Electronic) fee to $31.25; \9\ and (4) the $44.50 
Third Submission (Paper) fee to $41.25.\10\ Specifically, today, the 
FBI fingerprint charge is $11.25 \11\ and the FINRA electronic 
Fingerprint Fee will increase from $15 to $20 in 2023.\12\ While FINRA 
did not amend the paper Fingerprint Fee, previously the FBI Fee was 
reduced from $14.50 to $11.25.\13\ The paper Fingerprint Fees are not 
currently reflecting the amount assessed by FINRA. The amendment to the 
paper Fingerprint Fees will conform these fees with those of FINRA.
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    \7\ This fee includes a $20.00 FINRA fee and $11.25 FBI fee). 
See https://www.finra.org/registration-exams-ce/classic-crd/fingerprints/fingerprint-fees.
    \8\ This fee includes a $30 FINRA Fee and a $11.25 FBI Fee. See 
https://www.finra.org/registration-exams-ce/classic-crd/fingerprints/fingerprint-fees.
    \9\ This fee includes a $20.00 FINRA fee and $11.25 FBI fee). 
See https://www.finra.org/registration-exams-ce/classic-crd/fingerprints/fingerprint-fees.
    \10\ This fee includes a $30 FINRA Fee and a $11.25 FBI Fee. See 
https://www.finra.org/registration-exams-ce/classic-crd/fingerprints/fingerprint-fees.
    \11\ 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) (``2012 Rule 
Change'')
    \12\ See note 4.
    \13\ See 2012 Rule Change at note 6. The FBI does not charge its 
fee on a second fingerprint transaction when it identifies the first 
set of fingerprints as illegible for the same individual.
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    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,\14\ in general, and furthers the objectives of 
sections 6(b)(4) and 6(b)(5) of the Act,\15\ 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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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes it is reasonable to increase: (1) the $110 
fee for the additional processing of each initial or amended Form U4, 
Form U5 or Form BD that includes the initial reporting, amendment, or 
certification or one or more disclosure events or proceedings to $155; 
(2) the $45 FINRA Annual System Processing Fee Assessed only during 
Renewals to $70; and (3) the electronic Fingerprint Fees from $15 to 
$20 in accordance with an adjustment to FINRA's fees \16\ because 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.
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    \16\ The $20 FINRA Fee is in addition to the $11.25 FBI Fee 
except for the second fingerprint transaction.
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    These costs are borne by FINRA when a Non-FINRA member uses Web 
CRD. The Exchange's rule text will reflect the current registration and 
electronic fingerprint rates that will be assessed by

[[Page 72552]]

FINRA as of January 2, 2023 for the additional processing of each 
initial or amended Form U4, Form U5 or Form BD and Second Submission 
(Electronic) Fingerprint Processing Fee and the registration rates that 
will be assessed by FINRA as of January 2, 2024 for the FINRA Annual 
System Processing Fee Assessed only during Renewals.\17\
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    \17\ See note 4.
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    The Exchange believes it is reasonable to correct the paper 
Fingerprint Fees to reflect the reduced FBI Fee of $11.25.\18\ The 
amendments to the paper Fingerprint Fees will provide all Phlx members 
and member organizations with the correct Fingerprint Fees.
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    \18\ See 2012 Rule Change at note 6. The FBI does not charge its 
fee on a second fingerprint transaction when it identifies the first 
set of fingerprints as illegible for the same individual.
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    The Exchange believes it is equitable and not unfairly 
discriminatory to increase: (1) the $110 fee for the additional 
processing of each initial or amended Form U4, Form U5 or Form BD that 
includes the initial reporting, amendment, or certification or one or 
more disclosure events or proceedings to $155; (2) the $45 FINRA Annual 
System Processing Fee Assessed only during Renewals to $70; and (3) the 
electronic Fingerprint Fees from $15 to $20 in accordance with an 
adjustment to FINRA's fees \19\ 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. Similarly, the Exchange believes it is equitable 
and not unfairly discriminatory to correct the paper Fingerprint Fees 
to reflect the reduced FBI Fee of $11.25 \20\ 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.
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    \19\ The $20 FINRA Fee is in addition to the $11.25 FBI Fee 
except for the second fingerprint transaction.
    \20\ See 2012 Rule Change at note 6. The FBI does not charge its 
fee on a second fingerprint transaction when it identifies the first 
set of fingerprints as illegible for the same individual.
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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: (1) the $110 
fee for the additional processing of each initial or amended Form U4, 
Form U5 or Form BD that includes the initial reporting, amendment, or 
certification or one or more disclosure events or proceedings to $155; 
(2) the $45 FINRA Annual System Processing Fee Assessed only during 
Renewals to $70; and (3) the electronic Fingerprint Fees from $15 to 
$20 in accordance with an adjustment to FINRA's fees \21\ 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. The proposal will reflect the fees that will be 
assessed by FINRA to all members who register or require fingerprints 
as of January 2, 2023 and January 2, 2024, respectively.
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    \21\ The $20 FINRA Fee is in addition to the $11.25 FBI Fee 
except for the second fingerprint transaction.
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    Similarly, the Exchange believes it does not impose an undue burden 
on competition to correct the paper Fingerprint Fees to reflect the 
reduced FBI Fee of $11.25 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.\22\
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    \22\ 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-Phlx-2022-47 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-Phlx-2022-47. 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-Phlx-2022-47 and 
should be submitted on or before December 16, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-25670 Filed 11-23-22; 8:45 am]
BILLING CODE 8011-01-P