
[Federal Register Volume 81, Number 251 (Friday, December 30, 2016)]
[Notices]
[Pages 96530-96532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31682]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79682; File No. SR-FINRA-2016-048]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Eliminate Fees for Historical Trade Data 
Accessed Through the FINRA ADDS Web Site

December 23, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 20, 2016, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by FINRA. FINRA has 
designated the proposed rule change as ``establishing or changing a 
due, fee or other charge'' under Section 19(b)(3)(A)(ii) of the Act \3\ 
and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal 
effective upon receipt of this filing by the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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

    FINRA is proposing to amend FINRA Rules 7510, 7710 and 7730 to 
eliminate the fees for historical trade data accessed through the FINRA 
Automated Data Delivery System (``FINRA ADDS'') Web site relating to 
trades reported to the Alternative Display Facility (``ADF''), OTC 
Reporting Facility (``ORF'') and Trade Reporting and Compliance Engine 
(``TRACE'').
    The text of the proposed rule change is available on FINRA's Web 
site at http://www.finra.org, at the principal office of FINRA and at 
the Commission's Public Reference Room.

[[Page 96531]]

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FINRA 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. FINRA 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
    FINRA ADDS is a data delivery system that provides members, by 
market participant identifier (``MPID''), access to trade journal files 
containing key information regarding the member's trades reported to 
the ADF, ORF and TRACE. FINRA ADDS also provides member clearing firms 
access to data regarding their correspondents' trades reported to the 
ORF. Members use the trade journal files to reconcile the trade 
information captured by their own systems and the information captured 
by the FINRA trade reporting systems. Members can access FINRA ADDS 
data via the secure FINRA ADDS Web site and via Secure File Transfer 
Protocol (``SFTP'').
    Pursuant to Rules 7510(d), 7710(c) and 7730(g), FINRA makes recent 
ADF, ORF and TRACE trade journals available for free and offers 
subscribers the option of receiving historical data and retrieving data 
automatically via SFTP for a fee.\5\ Specifically, a member has access 
via the FINRA ADDS Web site to ADF, ORF or TRACE trade data associated 
with its MPID for the three prior business days (ADF and ORF) or 30 
prior business days (TRACE) free of charge without having to subscribe 
and pay for additional optional data services.
---------------------------------------------------------------------------

    \5\ FINRA notes that a member that subscribes to the optional 
FINRA ADDS services via the FINRA ADDS Web site or SFTP for ADF, ORF 
and TRACE data pays three separate fees under Rules 7510(d), 7710(c) 
and 7730(g).
---------------------------------------------------------------------------

    In addition, members can subscribe to receive their data for dates 
older than the most recent three or 30 business days through the Data 
Delivery Plus service for a monthly fee. Through this service, 
subscribers can access up to two years of trade journal files via the 
FINRA ADDS Web site. The fee is charged per month to an MPID that is a 
subscriber for Data Delivery Plus reports (``Plus Reports''), which are 
provided in response to requests by the MPID. The monthly fees for ORF 
and TRACE data are based on the subscriber's reported volume and the 
number of Plus Reports the subscriber receives, and for ADF data, the 
fees are based on the number of Plus Reports the subscriber receives. 
The ORF and TRACE fees range from a low of $10 to a high of $100 a 
month, and the ADF fees range from a low of $60 to a high of $100 a 
month. Thus, subscribers' fees may vary during a calendar year, 
depending on the number of reports FINRA makes available to the 
subscriber in response to the subscriber's requests. Clearing firms 
that subscribe to access their correspondents' historic ORF data pay a 
flat fee of $150 per Clearing Number per month, irrespective of the 
number of reports received.
    FINRA is proposing to amend Rules 7510(d), 7710(c) and 7730(g) to 
eliminate the fees for historical data through the FINRA ADDS Web site. 
As such, all trade journals (recent and historical for up to two years) 
through the FINRA ADDS Web site will be free of charge.\6\ The proposed 
rule change will enable all ADF, ORF and TRACE participants to look up 
their historical trade data free of charge via the FINRA ADDS Web site 
to reconcile with transaction and clearing data captured by their own 
systems.
---------------------------------------------------------------------------

    \6\ FINRA notes that the proposed rule change does not modify 
the fees for FINRA ADDS data delivered via SFTP under Rules 7510(d), 
7710(c) and 7730(g).
---------------------------------------------------------------------------

    FINRA believes that the proposed rule change will assist members in 
meeting their trade reporting and trade management obligations and will 
not result in any burden on members. The overall revenue that FINRA 
collects from fees for Plus Reports through the FINRA ADDS Web site is 
de minimis, and as such, FINRA does not believe that the fees warrant 
the administrative burden of calculating members' fees based on 
reported volume and number of reports under the current fee schedule. 
In addition, the proposed rule change would eliminate the uncertainty 
of the current fee schedule for members, whose fees may vary according 
to the number of Plus Reports the member requests. Under the proposed 
rule change, members will be able to request an unlimited number of 
reports through the FINRA ADDS Web site at no charge.
    FINRA has filed the proposed rule change for immediate 
effectiveness. The operative date will be January 3, 2017.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(5) of the Act,\7\ which requires, among 
other things, that FINRA rules provide for the equitable allocation of 
reasonable dues, fees and other charges among members and issuers and 
other persons using any facility or system that FINRA operates or 
controls. All similarly situated members are subject to the same fee 
structure and access to the ADF, ORF and TRACE is offered on fair and 
non-discriminatory terms. FINRA believes that the proposed rule change 
provides for the equitable allocation of reasonable fees in that it 
will eliminate a fee and enable all ADF, ORF and TRACE participants to 
access their trade data through the FINRA ADDS Web site at no charge. 
Thus, all ADF, ORF and TRACE participants will have the ability to look 
up their historical trade data via the FINRA ADDS Web site to reconcile 
with transaction and clearing data captured by their own systems. 
Members will continue to have the option of subscribing and paying for 
FINRA ADDS data delivered via SFTP, if they prefer automated retrieval 
of their trade data.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------

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

    FINRA 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. FINRA believes that the 
proposed rule change, by eliminating the fee for historical ADF, ORF 
and TRACE data via the FINRA ADDS Web site and enabling all ADF, ORF 
and TRACE participants to access their trade data at no charge, will 
assist members in meeting their trade reporting and trade management 
obligations and will not result in any burden on members. To the extent 
that the fees that are being proposed to be eliminated were viewed as 
burdensome among market participants, those participants may choose to 
utilize the data accessed through the FINRA ADDS Web site to reconcile 
with transaction and clearing data captured by their own systems, which 
would permit members to mitigate any direct or indirect costs imposed 
by the inability to reconcile such data.

[[Page 96532]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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) of the Act \8\ and paragraph (f)(2) of Rule 19b-4 
thereunder.\9\ 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 should be approved or disapproved.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 rule-comments@sec.gov. Please include 
File Number SR-FINRA-2016-048 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-FINRA-2016-048. 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 Web site (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 Web site 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 FINRA. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-FINRA-2016-048, and should 
be submitted on or before January 20, 2017.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-31682 Filed 12-29-16; 8:45 am]
 BILLING CODE 8011-01-P


