[Federal Register Volume 88, Number 14 (Monday, January 23, 2023)]
[Notices]
[Pages 4065-4067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01123]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96683; File No. SR-NYSECHX-2023-01]


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 17, 2023.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on January 3, 2023, the 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 
and II below, which Items have been prepared by the self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 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 certain regulatory fees related 
to the Central Registration Depository (``CRD'' or ``CRD system''), 
which are collected by the Financial Industry Regulatory Authority, 
Inc. (``FINRA''). The Exchange proposes to implement the fee change on 
January 3, 2023. 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 self-regulatory organization 
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 those 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 parts 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 
certain regulatory fees collected by FINRA for use of CRD.\4\ The 
Exchange proposes to implement the fee changes effective January 3, 
2023.
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    \4\ 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'').\5\ 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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    \5\ The Exchange originally adopted fees for use of the CRD 
system in in 2008 and amended those fees in 2013 and 2022. See 
Securities Exchange Act Release No. 57587 (March 31, 2008), 73 FR 
18598 (April 4, 2008) (SR-CHX-2007-21); Securities Exchange Act 
Release No. 68647 (January 14, 2013), 78 FR 4506 (January 22, 2013) 
(SR-CHX-2013-01); Securities Exchange Act Release No. 93907 (January 
5, 2022), 87 FR 1468 (January 11, 2022) (SR-NYSECHX-2021-18). While 
the Exchange lists these fees in its Fee Schedule, it does not 
collect or retain these fees.
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    FINRA recently amended two of the fees assessed for use of the CRD 
system.\6\ Accordingly, the Exchange 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 2023.\7\ 
Specifically, the Exchange proposes to amend the Fee Schedule to modify 
the fee charged to Non-FINRA Participants for additional processing of 
each 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

[[Page 4066]]

from $110 to $155 \8\ and the fee for processing and posting to the CRD 
system each set of fingerprints submitted electronically to FINRA, plus 
any other charge that may be imposed by the U.S. Department of Justice 
for processing each set of fingerprints, from $15 to $20.\9\
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    \6\ See Securities Exchange Act Release No. 90176 (October 14, 
2020), 85 FR 66592 (October 20, 2020) (SR-FINRA-2020-032).
    \7\ 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 5, supra. Participants that are 
also FINRA members are charged CRD system fees according to Section 
4 of Schedule A to the FINRA By-Laws.
    \8\ See Section (4)(b)(3) of Schedule A to the FINRA By-laws.
    \9\ See Section (4)(b)(4) 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.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\10\ in general, and furthers the 
objectives of section 6(b)(4) \11\ 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,\12\ 
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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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 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 2023 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 is 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 
2023, as is proposed by the Exchange.

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

    In accordance with section 6(b)(8) of the Act,\13\ 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 2023 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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    \13\ 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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
section 19(b)(3)(A) \14\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \15\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such 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 under 
section 19(b)(2)(B) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \16\ 15 U.S.C. 78s(b)(2)(B).
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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-2023-01 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-2023-01. 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

[[Page 4067]]

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-
NYSECHX-2023-01, and should be submitted on or before February 13, 
2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-01123 Filed 1-20-23; 8:45 am]
BILLING CODE 8011-01-P


