[Federal Register Volume 89, Number 12 (Thursday, January 18, 2024)]
[Notices]
[Pages 3479-3481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00919]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99338; File No. SR-NYSECHX-2023-25]


Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its 
Schedule of Fees and Rebates

January 12, 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 Chicago, Inc. (``NYSE Chicago'' 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

    The Exchange proposes to amend its Schedule of Fees and Rebates 
(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.

[[Page 3480]]

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 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 Participants that are 
not FINRA members (``Non-FINRA Participants'').\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 Participant.
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    \4\ The Exchange originally adopted fees for use of the CRD 
system in in 2008 and amended those fees in 2013, 2022 and 2023. See 
Securities Exchange Act Release Nos. 57587 (March 31, 2008), 73 FR 
18598 (April 4, 2008) (SR-CHX-2007-21); 68647 (January 14, 2013), 78 
FR 4506 (January 22, 2013) (SR-CHX-2013-01); 93907 (January 5, 
2022), 87 FR 1468 (January 11, 2022) (SR-NYSECHX-2021-18); and 96683 
(January 17, 2023), 88 FR 4065 (January 23, 2013) (SR-NYSECHX-2023-
01). 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 fees 
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 Participants that are not FINRA Members 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 Participants 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 
Chicago-only Participants. Non-FINRA Participants have been charged 
CRD system fees since 2008. See note 4, supra. Participants 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 Participants 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 as of 
January 2024 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 Participant 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 Participants. All similarly situated 
Participants are subject to the same fee structure, and every 
Participant 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 Participants 
required to report information to CRD and for services performed by 
FINRA regardless of whether such Participants 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 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 Participants required to report information to the CRD 
system and for services performed by FINRA, regardless of whether or 
not such Participants are FINRA members.
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    \11\ See 15 U.S.C. 78f(b)(8).

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[[Page 3481]]

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-NYSECHX-2023-25 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-NYSECHX-2023-25. 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-NYSECHX-2023-25 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. 2024-00919 Filed 1-17-24; 8:45 am]
BILLING CODE 8011-01-P