Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Granting Approval of a Proposed Rule Change Relating to FINRA's Trading Activity Fee Rate for Transactions in Covered Equity Securities, 33388-33389 [2011-14062]

Download as PDF 33388 Federal Register / Vol. 76, No. 110 / Wednesday, June 8, 2011 / Notices Electronic Comments 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 Because the foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b– 4(f)(6) thereunder.10 The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because the proposal should promote competition by allowing the Exchange, without undue delay, to list and trade option series that are trading on other options exchanges. Therefore, the Commission designates the proposal operative upon filing.11 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. 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: 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange’s intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission has waived the five-day prefiling requirement in this case. 11 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). sroberts on DSK5SPTVN1PROD with NOTICES 10 17 VerDate Mar<15>2010 21:51 Jun 07, 2011 Jkt 223001 • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Phlx-2011–74 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–Phlx-2011–74. This file number should be included on the subject line if e-mail 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 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. 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–Phlx2011–74 and should be submitted on or before June 29, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–14079 Filed 6–7–11; 8:45 am] BILLING CODE 8011–01–P 12 17 PO 00000 CFR 200.30–3(a)(12). Frm 00198 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64590; File No. SR–FINRA– 2011–020] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Granting Approval of a Proposed Rule Change Relating to FINRA’s Trading Activity Fee Rate for Transactions in Covered Equity Securities June 2, 2011. I. Introduction On April 26, 2011, the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b-4 thereunder,2 a proposed rule change related to FINRA’s Trading Activity Fee (‘‘TAF’’) for transactions in Covered Securities. The proposed rule change was published for comment in the Federal Register on May 3, 2011.3 The Commission received no comments on the proposal. This order approves the proposed rule change. II. Description of the Proposal FINRA’s proposal would amend Section 1 of Schedule A to the FINRA By-Laws to adjust the rate of FINRA’s TAF for transactions in Covered Securities that are exchange-registered equity securities. Covered Securities are defined in Section 1 of Schedule A to the FINRA By-Laws as: exchangeregistered securities wherever executed (except debt securities that are not TRACE–Eligible Securities); OTC Equity Securities; security futures; TRACE– Eligible Securities (provided that the transaction is a Reportable TRACE Transaction); and all municipal securities subject to Municipal Securities Rulemaking Board reporting requirements. The rules governing the TAF also include a list of exempt transactions.4 The TAF, along with the Personnel Assessment and the Gross Income Assessment fees, are used to fund FINRA’s regulatory activities, including examinations; financial monitoring; and FINRA’s policymaking, rulemaking, and enforcement activities.5 The current TAF rate is $0.000075 per share for each sale of a Covered Security, with a maximum charge of 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 64353 (April 27, 2011), 76 FR 24942 (‘‘Notice’’). 4 See FINRA By-Laws, Schedule A, § 1(b)(2). 5 See FINRA By-Laws, Schedule A, § 1(a). 2 17 E:\FR\FM\08JNN1.SGM 08JNN1 Federal Register / Vol. 76, No. 110 / Wednesday, June 8, 2011 / Notices $3.75 per trade. In the Notice, the Exchange stated that over 95% of TAF revenue is generated by transactions in Covered Securities that are equity securities. Thus, FINRA’s revenue from the TAF is substantially affected by changes in trading volume in the equities markets and, due to the substantial decrease in average daily share volumes since 2009, FINRA has experienced a commensurate substantial decline in revenue from the TAF. Accordingly, FINRA has proposed to increase the TAF rate for Covered Securities that are equity securities by $0.000015 per share, from $0.000075 per share to $0.000090 per share, with a corresponding increase to the pertransaction cap for Covered Securities that are equity securities from $3.75 to $4.50.6 FINRA stated in the Notice that the TAF for covered securities that are equity securities rate has not been adjusted in over six years, and that the proposal is designed to ‘‘stabilize revenue flows necessary to support FINRA’s regulatory mission.’’ FINRA proposes July 1, 2011 as the effective date of the adjusted TAF and will announce the effective date of the proposed rule change in a Regulatory Notice. III. Discussion and Commission’s Findings After carefully considering the proposed rule change, the Commission finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association.7 In particular, the Commission finds that the proposal is consistent with Section 15A(b)(5) of the Act,8 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. The Commission believes that the proposal is reasonably designed to secure adequate funding to support FINRA’s regulatory duties. IV. Conclusion sroberts on DSK5SPTVN1PROD with NOTICES It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,9 that the 6 Because transactions in Covered Securities that are equity securities account for over 95% of TAF revenues, FINRA is not proposing adjustments to the TAF rates for other types of Covered Securities. 7 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 8 15 U.S.C. 78o–3(b)(5). 9 15 U.S.C. 78s(b)(2). VerDate Mar<15>2010 21:51 Jun 07, 2011 Jkt 223001 proposed rule change (SR–FINRA– 2011–020), be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–14062 Filed 6–7–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64581; File No. SR– NYSEAmex–2011–35] Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Fees Relating to the Sale of Trading Licenses June 2, 2011. 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 May 26, 2011, NYSE Amex LLC (‘‘NYSE Amex’’ 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 self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to modify the fees it charges for the issuance of trading licenses that are required in order to effect transactions on the floor of the Exchange or through any facility of the Exchange. The Exchange proposes to amend Rule 300—NYSE Amex Equities (Trading Licenses) to (i) Create a twotiered pricing structure for the annual fee, under which the fee would continue to be $40,000 per license for the first two licenses held by a member organization but would be reduced to $25,000 per license for any additional trading licenses held by that member organization, (ii) provide a formula for proration of the annual fee during a calendar month in which a trading license has been in place for less than the full month and (iii) provide that the monthly installments of the annual fee be payable in arrears at the end of each 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00199 Fmt 4703 Sfmt 4703 33389 month. These changes will become operational on June 1, 2011. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, http://www.sec.gov, and http://www.nyse.com. 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to modify the fees it charges for the issuance of trading licenses that are required in order to effect transactions on the floor of the Exchange or through any facility of the Exchange. As currently provided in Rule 300—NYSE Amex Equities (Trading Licenses), the price per trading license sold in each annual offering of such licenses is $40,000 or such other price as the Exchange may set per trading license. The Exchange proposes to modify the structure of its annual fee for trading licenses by moving from a single price of $40,000 for all such licenses to a twotiered pricing structure. Under the proposal, the annual fee would continue to be $40,000 per license for the first two trading licenses held by a member organization but would be reduced to $25,000 per license for any additional trading licenses held by that member organization. Pursuant to Rule 300(e)—NYSE Amex Equities, a buyer of a trading license is required to pay the Exchange the trading license fee in equal monthly installments in advance over the period during which the trading license is in effect. The Exchange proposes to change its billing schedule so that the monthly installments are payable in arrears at the end of each month. Finally, Rule 300(d)—NYSE Amex Equities provides that, following the annual offering and at any time thereafter during the following calendar year, the Exchange shall sell additional E:\FR\FM\08JNN1.SGM 08JNN1

Agencies

[Federal Register Volume 76, Number 110 (Wednesday, June 8, 2011)]
[Notices]
[Pages 33388-33389]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-14062]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64590; File No. SR-FINRA-2011-020]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Order Granting Approval of a Proposed Rule Change 
Relating to FINRA's Trading Activity Fee Rate for Transactions in 
Covered Equity Securities

June 2, 2011.

I. Introduction

    On April 26, 2011, the Financial Industry Regulatory Authority, 
Inc. (``FINRA'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change related to FINRA's Trading Activity Fee (``TAF'') 
for transactions in Covered Securities. The proposed rule change was 
published for comment in the Federal Register on May 3, 2011.\3\ The 
Commission received no comments on the proposal. This order approves 
the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 64353 (April 27, 
2011), 76 FR 24942 (``Notice'').
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II. Description of the Proposal

    FINRA's proposal would amend Section 1 of Schedule A to the FINRA 
By-Laws to adjust the rate of FINRA's TAF for transactions in Covered 
Securities that are exchange-registered equity securities. Covered 
Securities are defined in Section 1 of Schedule A to the FINRA By-Laws 
as: exchange-registered securities wherever executed (except debt 
securities that are not TRACE-Eligible Securities); OTC Equity 
Securities; security futures; TRACE-Eligible Securities (provided that 
the transaction is a Reportable TRACE Transaction); and all municipal 
securities subject to Municipal Securities Rulemaking Board reporting 
requirements. The rules governing the TAF also include a list of exempt 
transactions.\4\ The TAF, along with the Personnel Assessment and the 
Gross Income Assessment fees, are used to fund FINRA's regulatory 
activities, including examinations; financial monitoring; and FINRA's 
policymaking, rulemaking, and enforcement activities.\5\
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    \4\ See FINRA By-Laws, Schedule A, Sec.  1(b)(2).
    \5\ See FINRA By-Laws, Schedule A, Sec.  1(a).
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    The current TAF rate is $0.000075 per share for each sale of a 
Covered Security, with a maximum charge of

[[Page 33389]]

$3.75 per trade. In the Notice, the Exchange stated that over 95% of 
TAF revenue is generated by transactions in Covered Securities that are 
equity securities. Thus, FINRA's revenue from the TAF is substantially 
affected by changes in trading volume in the equities markets and, due 
to the substantial decrease in average daily share volumes since 2009, 
FINRA has experienced a commensurate substantial decline in revenue 
from the TAF. Accordingly, FINRA has proposed to increase the TAF rate 
for Covered Securities that are equity securities by $0.000015 per 
share, from $0.000075 per share to $0.000090 per share, with a 
corresponding increase to the per-transaction cap for Covered 
Securities that are equity securities from $3.75 to $4.50.\6\ FINRA 
stated in the Notice that the TAF for covered securities that are 
equity securities rate has not been adjusted in over six years, and 
that the proposal is designed to ``stabilize revenue flows necessary to 
support FINRA's regulatory mission.''
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    \6\ Because transactions in Covered Securities that are equity 
securities account for over 95% of TAF revenues, FINRA is not 
proposing adjustments to the TAF rates for other types of Covered 
Securities.
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    FINRA proposes July 1, 2011 as the effective date of the adjusted 
TAF and will announce the effective date of the proposed rule change in 
a Regulatory Notice.

III. Discussion and Commission's Findings

    After carefully considering the proposed rule change, the 
Commission finds that it is consistent with the requirements of the Act 
and the rules and regulations thereunder applicable to a national 
securities association.\7\ In particular, the Commission finds that the 
proposal is consistent with Section 15A(b)(5) of the Act,\8\ 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. The Commission believes that the proposal 
is reasonably designed to secure adequate funding to support FINRA's 
regulatory duties.
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    \7\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78o-3(b)(5).
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IV. Conclusion

    It Is Therefore Ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-FINRA-2011-020), be, and 
hereby is, approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-14062 Filed 6-7-11; 8:45 am]
BILLING CODE 8011-01-P