[Federal Register Volume 86, Number 222 (Monday, November 22, 2021)]
[Notices]
[Pages 66373-66375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25349]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34 93582; File No. SR-ISE-2021-24]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend FINRA Fees

November 16, 2021.
    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 November 5, 2021, Nasdaq ISE, LLC (``ISE'' or ``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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend ISE's Pricing Schedule at Options 7, 
Section 9, Legal & Regulatory, to reflect adjustments to FINRA 
Registration Fees. Additionally, this rule change amends the Continuing 
Education Fees.
    While the changes proposed herein are effective upon filing, the 
Exchange has designated the amendments become operative on January 2, 
2022.\3\
---------------------------------------------------------------------------

    \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 text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/ise/rules, 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
    This proposal amends ISE's Pricing Schedule at Options 7, Section 
9, Legal & Regulatory, to reflect adjustments to FINRA Registration 
Fees.\4\ Additionally, this rule change amends the Continuing Education 
Fees. The FINRA fees are collected and retained by FINRA via Web CRD 
for the registration of employees of ISE members 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.
---------------------------------------------------------------------------

    \4\ 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-dealers.
---------------------------------------------------------------------------

    Today, ISE Options 7, Section 9E, provides a list of FINRA Web CRD 
Fees, Fingerprint Processing Fees, and Continuing Education Fees. The 
Exchange proposes to amend the introductory paragraph to add a sentence 
to make clear that FINRA collects the fees listed within Options 7, 
Section 9E on behalf of the Exchange. The fees listed within Options 7, 
Section 9E 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.\5\
---------------------------------------------------------------------------

    \5\ Id. FINRA noted in its rule change that it was adjusting its 
fees to provide sustainable funding for FINRA's regulatory mission.
---------------------------------------------------------------------------

    The Exchange also proposes to amend the Continuing Education Fees 
to update those fees to reflect current fees assessed by FINRA. The 
Exchange proposes to provide an introductory paragraph which states, 
``The Continuing Education Fee will be assessed as to each individual 
who is required to complete the Regulatory Element of the Continuing 
Education Requirements pursuant to Exchange General 4, Section 1240. 
This fee is paid directly to FINRA.'' Additionally, the Exchange 
proposes to replace the current rule text \6\ with the following rule 
text, ``$100.00 ($55.00 if the Continuing Education is Web-based) for 
each individual who is required to complete the S101 or S201.'' This 
proposed rule text reflects a rule change previously made by FINRA \7\ 
which discontinued the S501 Regulatory Element. Since the time the S501 
fee was discontinued, FINRA has been collecting the appropriate 
registration fees for the S101 and S201 registrations. This amendment 
will make clear the current Continuing Education Fees that FINRA 
assesses today.
---------------------------------------------------------------------------

    \6\ The current rule text provides, ``$60-S501. Assessed to each 
individual who is solely registered as a Proprietary Trader required 
to complete the Regulatory Element of the Continuing Education 
Requirements pursuant to Nasdaq ISE Rule 1240.''
    \7\ See Securities Exchange Act Release No. 75581 (July 31, 
2015), 80 FR 47018 (August 6, 2015) (SR-FINRA-2015-015) (Order 
Approving a Proposed Rule Change to Provide a Web-based Delivery 
Method for Completing the Regulatory Element of the Continuing 
Education Requirements).
---------------------------------------------------------------------------

    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.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of 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 members and issuers and other persons using any facility, and is 
not designed to permit unfair

[[Page 66374]]

discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    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.\10\ 
The Exchange's rule text will reflect the current registration rate 
that will be assessed by FINRA as of January 2, 2022. Additionally, 
making clear that FINRA, on behalf of the Exchange, will bill and 
collect these fees will bring greater transparency to its fees. Also, 
amending the Continuing Education Fees to properly reflect the current 
fee of $100.00 for each individual who is required to complete the S101 
or S201 and $55.00 if the Continuing Education is Web-based will bring 
greater transparency to the Continuing Education fees currently 
assessed by FINRA. Finally, referencing the rule which governs the 
Regulatory Element of the Continuing Education Requirements and, noting 
that the fee is paid directly to FINRA, will provide more information 
to Members regarding the fees for Continuing Education. 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.
---------------------------------------------------------------------------

    \10\ See note 3 above.
---------------------------------------------------------------------------

    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 Members who require Form U4 filings as of January 2, 2022. 
Additionally, reflecting the current Continuing Education Fees for the 
S101 or S201 and removing outdated language is equitable and not 
unfairly discriminatory as FINRA currently assesses these rates to all 
Members that are required to have those registrations. Finally, making 
clear that FINRA, on behalf of the Exchange, will bill and collect 
these fees and referencing the rule which governs the Regulatory 
Element of the Continuing Education Requirements will bring greater 
transparency to FINRA's fees. 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 
Members who require Form U4 filings as of January 2, 2022. Also, 
reflecting the current Continuing Education Fees for the S101 or S201 
and removing outdated language does not impose an undue burden on 
competition as FINRA currently assesses these rates to all Members that 
are required to have those registrations. Finally, making clear that 
FINRA, on behalf of the Exchange, will bill and collect these fees and 
referencing the rule which governs the Regulatory Element of the 
Continuing Education Requirements will bring greater transparency to 
FINRA's fees. 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\11\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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.

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-ISE-2021-24 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-ISE-2021-24. 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. 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-ISE-2021-24, and should be submitted on 
or before December 13, 2021.
---------------------------------------------------------------------------

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


[[Page 66375]]


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

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25349 Filed 11-19-21; 8:45 am]
BILLING CODE 8011-01-P


