[Federal Register Volume 87, Number 12 (Wednesday, January 19, 2022)]
[Notices]
[Pages 2958-2960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-00870]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93954; File No. SR-MEMX-2021-20]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend Exchange
Rule 15.1(e) Regarding FINRA Registration and Processing Fees
January 12, 2022.
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 December 29, 2021, MEMX LLC (``MEMX'' 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 Exchange. 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
(a) The Exchange is filing with the Commission a proposed rule
change to amend Exchange Rule 15.1(e) to reflect adjustments to the
Financial Industry Regulatory Authority, Inc. (``FINRA'') Registration
and Processing Fees related to the Central Registration Depository
System (``CRD system''), which will be collected by FINRA. While the
changes proposed herein are effective upon filing, the Exchange has
designated the amendments become operative on January 3, 2022.\3\ The
text of the proposed rule change is provided in Exhibit 5.
---------------------------------------------------------------------------
\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) (the ``FINRA Fee Filing'').
---------------------------------------------------------------------------
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
Today, Exchange Rule 15.1(e) provides a list of FINRA Registration
and Processing Fees that will be collected and retained by FINRA via
the CRD system. The Exchange does not collect or retain these fees. The
Exchange is proposing to amend Exchange Rule 15.1(e) to reflect
adjustments to FINRA's Registration and Processing Fees related to the
CRD
[[Page 2959]]
system.\4\ FINRA charges a single fee to register any representative or
principal of a member firm in the CRD system irrespective of if the
member firm is also a member of FINRA. Because FINRA separately
collects the CRD system fee for any Member \5\ that is also a FINRA
member,\6\ this fee filing only applies to Members who are not FINRA
members.
---------------------------------------------------------------------------
\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.
\5\ See Exchange Rule 1.5(p).
\6\ Members that are also FINRA members are charged CRD system
fees according to Section (4) of Schedule A to the FINRA By-Laws.
---------------------------------------------------------------------------
Effective January 3, 2022, FINRA is increasing the fee it charges
for each initial Form U4 filed for the registration of a representative
or principal of any firm registered in the CRD system from $100 to
$125.\7\ Accordingly, the Exchange is proposing to update Exchange Rule
15.1(e) to reflect the new $125 CRD system fee that will take effect
starting January 3, 2022. Because these costs are borne by FINRA when a
non-FINRA member uses the CRD system, FINRA will continue to collect
and retain these fees for the registration of associated persons of
Members that are not also FINRA members.
---------------------------------------------------------------------------
\7\ See supra note 3.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\8\ in general, and with
Sections 6(b)(4) and 6(b)(5) of the Act,\9\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among its Members and other persons using its facilities
and is not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers. All similarly situated Members are
subject to the same fee structure, and every Member firm must use the
CRD system for registration and disclosure.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The proposed fee is reasonable because it is identical to the fee
adopted by FINRA for use of the CRD system for disclosure and the
registration of associated persons of FINRA members.\10\ Thus, the
Exchange Rule 15.1(e) will reflect the current registration rate that
will be assessed by FINRA as of January 3, 2022 for any Members that
are not also FINRA members. The Exchange also believes the proposed fee
change is reasonable, because, as noted in the FINRA Fee Filing, FINRA
is increasing the CRD system fees to provide enough revenue to support
its regulatory mission.\11\ Notably, FINRA has not increased CRD system
fees since 2012.\12\
---------------------------------------------------------------------------
\10\ See supra note 3.
\11\ See supra note 3.
\12\ See supra note 3.
---------------------------------------------------------------------------
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
because the equivalent fees will be charged by FINRA of all users of
the CRD system, whether or not they are FINRA members. Therefore, all
users of the CRD system will equally bear the cost of maintaining the
system.\13\
---------------------------------------------------------------------------
\13\ See supra note 3.
---------------------------------------------------------------------------
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 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.\14\
---------------------------------------------------------------------------
\14\ See supra note 3.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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. Specifically,
the Exchange believes that the proposed fees will result in the same
regulatory fees being charged to all Members required to report
information to the CRD system and for services performed by FINRA,
regardless of whether or not such Members are FINRA members.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
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 \15\ and Rule 19b-4(f)(2) \16\ thereunder.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
\16\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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 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 to
determine whether the proposed rule change 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-MEMX-2021-20 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-MEMX-2021-20. 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; the Commission does not edit
personal identifying information from submissions. You should submit
only
[[Page 2960]]
information that you wish to make available publicly. All submissions
should refer to File Number SR-MEMX-2021-20 and should be submitted on
or before February 9, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-00870 Filed 1-18-22; 8:45 am]
BILLING CODE 8011-01-P