[Federal Register Volume 87, Number 13 (Thursday, January 20, 2022)]
[Notices]
[Pages 3138-3140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01069]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93982; File No. SR-BOX-2022-03]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule on the BOX Options Market LLC (``BOX'') Facility
January 14, 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 January 12, 2022, BOX Exchange LLC (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 Exchange filed the
proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\
and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the BOX Options Fee
Schedule at Section VI, Regulatory Fees to reflect adjustments to sub-
section B. FINRA Fees and sub-section C. Registration and Continuing
Education Fees.\5\
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\5\ 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). See also SR-FINRA-2021-034.
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While changes to the fee schedule pursuant to this proposal will be
effective upon filing, the Exchange has designated that the proposed
annual Maintaining Qualifications Program (``MQP'') fee will be
implemented on January 31, 2022 \6\ and the proposed revised fee for
the Regulatory Element will be implemented on January 1, 2023.\7\
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\6\ The Exchange notes that this proposed implementation date
coincides with the date FINRA proposes to implement the MQP Fee, as
eligible individuals can begin making their election to participate
in the MQP on January 31, 2022. The annual MQP fee is set forth in
proposed Section 4(f)(2) of Schedule A to the FINRA By-Laws. See SR-
FINRA-2021-034. See also FINRA Rule 1240(c) (Continuing Education
Program for Persons Maintaining Their Qualification Following the
Termination of a Registration Category).
\7\ The Exchange notes that this proposed implementation date
coincides with the date FINRA has designated the proposed annual
Regulatory Element fee to go into effect. FINRA has designated
January 1, 2023 as the effective date of the transition to the
annual Regulatory Element requirement. See SR-FINRA-2021-034. The
Regulatory Element Fee is set forth in Section 4(f)(1) of Schedule A
to the FINRA By-Laws. See SR-FINRA-2021-034. See also See also FINRA
Rule 1240(a) (Regulatory Element).
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The text of the proposed changes is attached [sic] as Exhibit 5.
The text of the proposed rule change is available from the
principal office of the Exchange, at the Commission's Public Reference
Room and also on the Exchange's internet website at http://boxexchange.com.
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
The Exchange proposes to amend the Fee Schedule for trading on the
BOX Options Market at Section VI.B. (FINRA Fees) and Section VI.C.
(Registration and Continuing Education) to make clarifying changes to
the section and reflect adjustments to FINRA Registration Fees.\8\ The
FINRA fees are collected and retained by FINRA via Web CRD for the
registration of employees of BOX Participants 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. Today, Sections VI.B. and VI.C., of the BOX Options Fee
Schedule, provide a list of FINRA Web CRD Fees, Fingerprint Processing
Fees, and Continuing Education Fees. The Exchange proposes to amend the
introductory paragraph of Section VI.B. to add a sentence to make it
clear that FINRA collects the fees listed within this section. The
Exchange also proposes to add the heading, General Registration Fees,
before the list of fees collected by FINRA. The fees listed within
Section VI.B., reflect fees set by FINRA. Specifically, 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.\9\ The Exchange
is proposing additional technical and conforming amendments to the Fee
Schedule, including updating the footnote numbering in Section VII,
Billing, and Section VIII, Participant Fees.
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\8\ 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-dealer.
\9\ FINRA noted in its rule change that it was adjusting its
fees to provide sustainable funding for FINRA's regulatory mission.
See Securities Exchange Act Release No. 90176 (October 14, 2020), 85
FR 66592 (October 20, 2020) (SR-FINRA-2020-032).
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The proposed rule change also makes non-substantive clarifying
changes to certain provisions of the Fee Schedule at Section VI,
Regulatory Fees, VI.B. (FINRA Fees) and VI.C. (Registration and
Continuing Education). The Exchange proposes to add clarifying language
to Section VI.B. Specifically, the Exchange is proposing to add
[[Page 3139]]
footnote 26 to clarify that the FINRA Web CRD Processing Fee is paid
directly to FINRA for each initial Form U4 filed for the registration
of a representative or principal. The Exchange is also proposing to
adopt footnote 27, to make clear that the FINRA Disclosure Processing
Fee is paid directly to FINRA for the additional processing of each
initial or amended Form U4, Form U5 or Form BD that includes the
initial reporting, amendment, or certification of one of more
disclosure events or proceedings. The Exchange proposes to add language
to make it clear that the FINRA Annual System Processing Fee is
assessed only during renewals and that the Fingerprinting Fees are
processing fees.
The Exchange also proposes to amend Section VI.C., to reflect the
current fees assessed by FINRA and add clarifying language to provide
more transparency to the FINRA Fees listed within the BOX Fee Schedule.
The Exchange proposes to decrease the $55 fee per session to $18 per
session. This fee is assessed to each individual who completes the
Regulatory Element of the Continuing Education requirements pursuant to
FINRA rules. This amendment is made in accordance with a recent FINRA
rule change to adjust to its fees.\10\
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\10\ See SR-FINRA-2021-034 (December 30, 2021). FINRA notes that
the proposed $18 annual fee is comparable to the current $55 fee
over a three-year period.
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The Exchange proposes to remove the reference to the S101 within
Section VI.C.2., the Continuing Education Fee and the corresponding
footnote 29. This amendment will clarify that the Continuing Education
Fees that FINRA assesses applies to each individual who is required to
complete the Regulatory Element of the Continuing Education
requirements. The Exchange also proposes to add clarifying language to
footnote 28 to make it clear that the referenced $120 fee to be paid to
FINRA includes the fees for the Securities Industry Essentials Exam,
and the Series 57 exam.
The Exchange proposes to add Section VI.C.3., Maintaining
Qualifications Program Fee, to adopt the proposed annual MQP Fee of
$100. The Exchange also proposes to adopt footnote 30 to specify that
the MQP Fee will be paid directly to FINRA and will be assessed
annually to each individual electing to participate in the continuing
education program under FINRA Rule 1240(c). This amendment is made in
accordance with a recent FINRA rule change to adjust to its fees.\11\
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\11\ See SR-FINRA-2021-034 (December 30, 2021). FINRA notes that
the proposed MQP is a voluntary program.
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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.\12\
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\12\ The Exchange notes that other options exchanges have
recently filed similar proposals to increase the fee from $100 to
$125 for each initial Form U4 filed for the registration of a
representative or principal in accordance with a recent FINRA rule
change to adjust to its fees. See Securities Exchange Release No.
34-93582 (November 16, 2021), 86 FR 66373 (November 22, 2021) (SR-
ISE-2021-24) (Notice of Filing and Immediate Effectiveness). See
also Securities Exchange Release No. 34-93583 (November 16, 2021),
86 FR 66356 (November 22, 2021) (SR-GEMX-2021-10) (Notice of Filing
and Immediate Effectiveness). See also Securities Exchange Release
No. 34-93602 (November 17, 2021), 86 FR 66604 (November 23, 2021)
(SR-NASDAQ-2021-087) (Notice of Filing and Immediate Effectiveness).
See also Securities Exchange Release No. 34-93584 (November 16,
2021), 86 FR 66363 (November 22, 2021) (SR-MRX-2021-11) (Notice of
Filing and Immediate Effectiveness). See also Securities Exchange
Release No. 34-93587 (November 16, 2021), 86 FR 66375 (November 22,
2021) (SR-BX-2021-052) (Notice of Filing and Immediate
Effectiveness). See also Securities Exchange Release No. 34-93577
(November 15, 2021), 86 FR 64976 (November 19, 2021) (SR-PHLX-2021-
68) (Notice of Filing and Immediate Effectiveness).
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2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act, in general, and Section
6(b)(4) and 6(b)(5) of the Act,\13\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees, and other
charges among BOX Participants and other persons using its facilities
and does not unfairly discriminate between customers, issuers, brokers
or dealers.
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\13\ 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 representative or
principal to $125 in accordance with an adjustment to FINRA's fees.\14\
The Exchange's rule text will reflect the current registration rate
that will be assessed by FINRA as of January 2, 2022. Additionally,
adding language that makes it clear that FINRA will bill and collect
these general registration fees will bring greater transparency to the
FINRA fees as listed within the BOX Fee Schedule. The Exchange believes
it is reasonable to decrease the $55 per session fee to $18 per session
in accordance with a recent FINRA rule change to adjust to its
fees.\15\ Also, amending the Continuing Education Fees to remove the
reference to the S101 will bring greater clarity to the Continuing
Education fees currently assessed by FINRA and listed within the BOX
Fee Schedule. Noting that the fees are paid directly to FINRA and the
addition of the other proposed clarifying changes will provide more
information to Participants regarding the fees for Continuing
Education. The Exchange also believes it is reasonable to add Section
VI.C.3. to list the proposed MQP Fee of $100 in accordance with a
recent FINRA rule change to adjust to its fees.\16\ Finally, making
clear that the FINRA Annual System Processing Fee is assessed only
during renewals, the Fingerprinting Fees are processing fees, and that
Series 57 Exam fee includes the fee for the Securities Industry
Essentials Exam, will provide greater transparency regarding the fees
collected by FINRA and listed in the BOX Fee Schedule. 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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\14\ See supra note 5.
\15\ See supra note 10.
\16\ See supra note 11.
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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 Participants who require Form U4 filings as of January 2,
2022. The Exchange also believes that its proposal to decrease the
Continuing Education fee from $55 per session to $18 per session is not
unfairly discriminatory as the amendment will reflect the current fee
that will be assessed by FINRA to all Participants who complete the
Regulatory Element of the Continuing Education requirements pursuant to
FINRA rules. Additionally, reflecting the current Continuing Education
Fees for the S101 or S201 is equitable and not unfairly discriminatory
as FINRA currently assesses these rates to all Participants that are
required to have those registrations. The Exchange also believes that
its proposal to list the MQP Fee of $100 is not unfairly discriminatory
as the amendment will reflect the annual fee that will be assessed by
FINRA to all Participants who elect to participate in the MQP pursuant
to FINRA rules. Finally, making clear that FINRA will bill and collect
these fees will bring greater
[[Page 3140]]
transparency to FINRA's fees as listed within the BOX Fee Schedule.
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 does not believe
that this proposal creates an unnecessary or inappropriate inter-market
burden on competition as FINRA's fees apply to all market participants.
Additionally, the Exchange does not believe that this proposal creates
an unnecessary or inappropriate intra-market burden on competition as
the increased fee for each initial Form U4 filed for the registration
of a representative or principal will be assessed by FINRA to all
Participants who require Form U4 filings as of January 2, 2022.
The Exchange does not believe that this proposal creates an
unnecessary or inappropriate intra-market burden on competition as the
decreased Continuing Education fee from will be assessed by FINRA to
all Participants who complete the Regulatory Element of the Continuing
Education requirements pursuant to FINRA rules. Also, clarifying that
the Continuing Education Fees apply to all individual required to
complete the Regulatory Element of the Continuing Education
requirements does not impose an undue burden on competition as FINRA
currently assesses these rates to all Participants that are required to
have those registrations. The Exchange also does not believe that its
proposal to list the proposed annual MQP Fee of $100 creates an
unnecessary or inappropriate intra-market burden on competition as this
annual fee that will be assessed by FINRA to all Participants who elect
to participate in the MQP pursuant to FINRA rules. Additionally, making
clear that FINRA will bill and collect these fees will bring greater
transparency to the FINRA fees listed within the BOX Fee Schedule.
Finally, clarifying that the FINRA Annual System Processing Fee is
assessed only during renewals, the Fingerprinting Fees are processing
fees, and that Series 57 exam fee includes the fee for the Securities
Industry Essentials Exam, will provide more information to Participants
regarding the fees collected by FINRA and listed within the BOX Fee
Schedule. 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 Effectiveness
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Exchange Act \17\ and Rule 19b-4(f)(2)
thereunder,\18\ because it establishes or changes a due, or fee.
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\17\ 15 U.S.C. 78s(b)(3)(A)(ii).
\18\ 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 the rule
change if it appears to the Commission that the action is necessary or
appropriate in the public interest, for the protection of investors, or
would otherwise further 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-BOX-2022-03 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-BOX-2022-03. 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 such 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-BOX-2022-03 and should be submitted on
or before February 10, 2022.
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\19\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01069 Filed 1-19-22; 8:45 am]
BILLING CODE 8011-01-P