[Federal Register Volume 89, Number 12 (Thursday, January 18, 2024)]
[Notices]
[Pages 3450-3452]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00855]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99334; File No. SR-NYSEARCA-2023-88]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend its NYSE 
Arca Options Fees and Charges

January 11, 2024.
    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, 2023, NYSE Arca, Inc. (``NYSE Arca'' 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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[[Page 3451]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its NYSE Arca Options Fees and 
Charges (the ``Fee Schedule'') with respect to the system processing 
fee for the Central Registration Depository (``CRD'' or ``CRD system'') 
collected by the Financial Industry Regulatory Authority, Inc. 
(``FINRA''). The Exchange proposes to implement the fee change on 
January 2, 2024. The proposed rule change is available on the 
Exchange's website 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 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 with respect to the 
system processing fee for use of CRD collected by collected by 
FINRA.\3\ The Exchange proposes to implement the fee changes effective 
January 2, 2024.
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    \3\ CRD 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 CRD for the 
registration of associated persons of Exchange OTP Holders and OTP 
Firms that are not FINRA members (``Non-FINRA OTP Holders'').\4\ 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 OTP Holder.
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    \4\ The Exchange originally adopted fees for use of the CRD 
system in 2005 and amended those fees in 2013, 2022 and 2023. See 
Securities Exchange Act Release Nos. 51641 (May 2, 2005), 70 FR 
24155 (May 6, 2005) (SR-PCX-2005-49); 68590 (January 4, 2013), 78 FR 
2470 (January 11, 2013) (SR-NYSEArca-2012-145); 93899 (January 5, 
2022), 87 FR 1455 (January 11, 2022) (SR-NYSEArca-2021-106); and 
96698 (January 18, 2023), 88 FR 4260 (January 24, 2023) (SR-
NYSEArca-2023-03). While the Exchange lists these fees in its Fee 
Schedule, it does not collect or retain these fees.
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    In 2020, FINRA amended certain fees assessed for use of the CRD 
system for implementation between 2022 and 2024.\5\ The Exchange 
accordingly proposes to amend the Fee Schedule to mirror the system 
processing fee assessed by FINRA, which will be implemented 
concurrently with the amended FINRA fee as of January 2024.\6\ 
Specifically, the Exchange proposes to amend the Fee Schedule to modify 
the system processing fee charged to Non-FINRA OTP Holders for each 
registered representative and principal from $45 to $70.\7\
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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).
    \6\ The Exchange notes that it has only adopted the CRD system 
fees charged by FINRA to Non-FINRA OTP Holders 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 
Arca-only OTP Holders. Non-FINRA OTP Holders have been charged CRD 
system fees since 2005. See note 4, supra. OTP Holders that are also 
FINRA members are charged CRD system fees according to Section 4 of 
Schedule A to the FINRA By-Laws.
    \7\ See Section (4)(b)(7) of Schedule A to the FINRA By-laws.
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    The Exchange notes that the proposed change is not otherwise 
intended to address any other issues surrounding regulatory fees, and 
the Exchange is not aware of any problems that OTP Holders would have 
in complying with the proposed change.
1. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Section 6(b)(4) \9\ of the Act, in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges. The Exchange also believes that the proposed 
rule change is consistent with Section 6(b)(5) of the Act,\10\ in that 
it is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed fee change is reasonable 
because the fee will be identical to that adopted by FINRA for use of 
the CRD system to submit an 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 and the posting to CRD 
each set of fingerprints submitted electronically to FINRA. The costs 
of operating and improving the CRD system are similarly borne by FINRA 
when a Non-FINRA OTP Holder uses the CRD system; accordingly, the fees 
collected for such use should, as proposed by the Exchange, mirror the 
fees assessed to FINRA members. In addition, as FINRA noted in amending 
its fees, it believes that its proposed pricing structure is reasonable 
and correlates fees with the components that drive its regulatory costs 
to the extent feasible. The Exchange further believes that the change 
is reasonable because it will provide greater specificity regarding the 
CRD system fees that are applicable to Non-FINRA OTP Holders. All 
similarly situated OTP Holders are subject to the same fee structure, 
and every OTP Holder 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 proposed by the Exchange.
    The Exchange also believes that the proposed fee change provides 
for the equitable allocation of reasonable fees and other charges, and 
does not unfairly discriminate between customers, issuers, brokers, and 
dealers. The fee applies equally to all individuals and firms required 
to report information the CRD system, and the proposed change will 
result in the same regulatory fees being charged to all OTP Holders 
required to report information to CRD and for services performed by 
FINRA regardless of whether such OTP Holders are FINRA members. 
Accordingly, the Exchange believes that the fee collected for such use 
should increase in lockstep with the fee adopted by FINRA as of January 
2024, as proposed by the Exchange.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\11\ the Exchange 
believes that the

[[Page 3452]]

proposed rule change would not 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 
reflect fees that will be assessed by FINRA as of January 2024 and will 
thus result in the same regulatory fees being charged to all OTP 
Holders required to report information to the CRD system and for 
services performed by FINRA, regardless of whether or not such OTP 
Holders are FINRA members.
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    \11\ See 15 U.S.C. 78f(b)(8).
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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 \12\ and Rule 19b-4(f)(2) \13\ thereunder.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 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-NYSEARCA-2023-88 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-NYSEARCA-2023-88. 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 a.m. and 3 
p.m. Copies of the filing also will be available for inspection and 
copying at the principal office of the Exchange. Do not include 
personal identifiable information in submissions; you should submit 
only information that you wish to make available publicly. We may 
redact in part or withhold entirely from publication submitted material 
that is obscene or subject to copyright protection. All submissions 
should refer to file number SR-NYSEARCA-2023-88 and should be submitted 
on or before February 8, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-00855 Filed 1-17-24; 8:45 am]
BILLING CODE 8011-01-P