[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]


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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.
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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

    (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.
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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) (the ``FINRA Fee Filing'').
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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.
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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.
    \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.
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    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.
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    \7\ See supra note 3.
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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.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4) and (5).
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    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\
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    \10\ See supra note 3.
    \11\ See supra note 3.
    \12\ See supra note 3.
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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 
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\
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    \13\ See supra note 3.
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    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\
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    \14\ See supra note 3.
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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 
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.
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    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \16\ 17 CFR 240.19b-4(f)(2).
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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 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

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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\
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    \17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-00870 Filed 1-18-22; 8:45 am]
BILLING CODE 8011-01-P