Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Section 4(c) of Schedule A to the FINRA By-Laws To Increase Qualification Examination Fees and Assess a Service Charge for Regulatory Element Continuing Education Sessions Taken Outside the United States, 12635-12637 [2012-4914]
Download as PDF
<![CDATA[
Federal Register / Vol. 77, No. 41 / Thursday, March 1, 2012 / Notices
Underlying Funds, which have been
approved for listing and trading on the
Exchange by the Commission.28
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act 29 and the rules and
regulations thereunder applicable to a
national securities exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,30 that the
proposed rule change (SR–NYSEArca–
2011–97) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
Kevin M. O’Neill,
Secretary.
[FR Doc. 2012–4915 Filed 2–29–12; 8:45 am]
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 the Substance
of the Proposed Rule Change
FINRA is proposing to amend Section
4(c) of Schedule A to the FINRA ByLaws to (1) increase qualification
examination fees, and (2) assess a
service charge for any Regulatory
Element sessions taken in a test center
located outside the territorial limits of
the United States. The text of the
proposed rule change is available on
FINRA’s Web site at https://
www.finra.org, at the principal office of
FINRA 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
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66465; File No. SR–FINRA–
2012–009]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Section 4(c) of
Schedule A to the FINRA By-Laws To
Increase Qualification Examination
Fees and Assess a Service Charge for
Regulatory Element Continuing
Education Sessions Taken Outside the
United States
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
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 February
23, 2012, 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
mstockstill on DSK4VPTVN1PROD with NOTICES
February 24, 2012.
As discussed in further detail below,
the proposed rule change amends
Section 4(c) of Schedule A to the FINRA
By-Laws to (1) increase qualification
examination fees, and (2) assess a
service charge for any Regulatory
Element session taken in a test center
located outside the territorial limits of
the United States.
28 See
supra note 6.
U.S.C. 78f(b)(5).
30 15 U.S.C. 78s(b)(2).
31 17 CFR 200.30–3(a)(12).
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).
29 15
VerDate Mar<15>2010
17:25 Feb 29, 2012
Qualification Examination Fees
NASD Rules 1021(a) and 1031(a)
require that persons engaged, or to be
engaged, in the investment banking or
securities business of a FINRA member
who are to function as principals or
representatives register with FINRA in
each category of registration appropriate
to their functions as specified in NASD
Rules 1022 and 1032.5 Such individuals
must pass an appropriate qualification
5 See also NASD Rules 1041 and 1050 and FINRA
Rule 1230(b)(6) regarding the qualification and
registration requirements for Order Processing
Assistant Representatives, Research Analysts and
Operations Professionals, respectively.
Jkt 226001
PO 00000
Frm 00083
Fmt 4703
Sfmt 4703
12635
examination before their registration can
become effective. These mandatory
qualification examinations cover a
broad range of subjects regarding
financial markets and products,
individual responsibilities, securities
industry rules, and regulatory structure.
FINRA develops, maintains, and
delivers all qualification examinations
for individuals who are registered or
seeking registration with FINRA. FINRA
also administers and delivers
examinations sponsored (i.e.,
developed) by the Municipal Securities
Rulemaking Board (‘‘MSRB’’), the North
American Securities Administrators
Association, the National Futures
Association, the Federal Deposit
Insurance Corporation, and other selfregulatory organizations.
FINRA currently administers
examinations via computer through the
PROCTOR® system 6 at testing centers
operated by vendors under contract
with FINRA. FINRA charges an
examination fee to candidates for
FINRA-sponsored and co-sponsored
examinations to cover the development,
maintenance, and delivery of these
examinations. For qualification
examinations sponsored by a FINRA
client and administered by FINRA,
FINRA charges a delivery fee that
represents either a portion of or the
entire examination fee for the
examination.7
FINRA regularly conducts a
comprehensive review of the
examination fee structure, including an
analysis of the costs associated with
developing, administering, and
delivering examinations. Based on the
results of its review, FINRA may
propose changes to better align the
examination fee structure with the costs
associated with the programs. In this
regard, the most recent review revealed
that certain operational costs have
increased and, based on current
information, will continue to increase
over the next few years. In particular,
these costs consist of (1) fees that
vendors charge FINRA for delivering
qualification examinations, and (2)
PROCTOR maintenance and
enhancement expenses. FINRA believes
that the proposed rule change will help
6 PROCTOR is a computer system that is
specifically designed for the administration and
delivery of computer-based testing and training.
7 The delivery fee represents a portion of the
entire examination fee when a FINRA client has
established an additional fee for an examination
that it sponsors. For example, the fee to take the
Series 51 (Municipal Fund Securities Limited
Principal) examination is currently $145. Of this
amount, $85 is the FINRA administration and
delivery fee, and $60 is the development fee
determined by the FINRA client, the MSRB. See
MSRB Rule A–16.
E:\FR\FM\01MRN1.SGM
01MRN1
12636
Federal Register / Vol. 77, No. 41 / Thursday, March 1, 2012 / Notices
to better align the examination program
fees with these costs.
Therefore, FINRA is proposing to
amend Section 4(c) of Schedule A to the
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
Series
4 ..............................
6 ..............................
7 ..............................
9 ..............................
10 ............................
11 ............................
14 ............................
16 ............................
17 ............................
22 ............................
23 ............................
24 ............................
26 ............................
27 ............................
28 ............................
37 ............................
38 ............................
39 ............................
42 ............................
51 ............................
52 ............................
53 ............................
55 ............................
62 ............................
72 ............................
79 ............................
82 ............................
86 ............................
87 ............................
99 ............................
which was implemented in late 2011.8
The proposed fee changes are as
follows:
Registered Options Principal ..................................................................................................
Investment Company Products/Variable Contracts Representative ......................................
General Securities Representative .........................................................................................
General Securities Sales Supervisor—Options Module .........................................................
General Securities Sales Supervisor—General Module ........................................................
Assistant Representative—Order Processing ........................................................................
Compliance Official .................................................................................................................
Supervisory Analyst ................................................................................................................
Limited Registered Representative .........................................................................................
Direct Participation Programs Representative ........................................................................
General Securities Principal Sales Supervisor Module ..........................................................
General Securities Principal ...................................................................................................
Investment Company Products/Variable Contracts Principal .................................................
Financial and Operations Principal .........................................................................................
Introducing Broker-Dealer Financial and Operations Principal ..............................................
Canada Module of S7 (Options Required) .............................................................................
Canada Module of S7 (No Options Required) .......................................................................
Direct Participation Programs Principal ..................................................................................
Registered Options Representative ........................................................................................
Municipal Fund Securities Limited Principal ...........................................................................
Municipal Securities Representative .......................................................................................
Municipal Securities Principal .................................................................................................
Limited Representative—Equity Trader ..................................................................................
Corporate Securities Limited Representative .........................................................................
Government Securities Representative ..................................................................................
Investment Banking Qualification Examination ......................................................................
Limited Representative—Private Securities Offering .............................................................
Research Analyst—Analysis ...................................................................................................
Research Analyst—Regulatory ...............................................................................................
Operations Professional ..........................................................................................................
FINRA is proposing that the
implementation date of the proposed
rule change will be April 2, 2012.
Specifically, the proposed examination
fees would become effective for
examination requests made in the CRD
system on or after April 2, 2012. In
addition, the proposed foreign test
center Regulatory Element session
service charge would become effective
for Regulatory Element sessions
completed on or after April 2, 2012.
From $90 to $100.
From $85 to $95.
From $265 to $290.
From $70 to $75.
From $110 to $120.
From $70 to $75.
From $320 to $335.
From $210 to $230.
From $70 to $75.
From $85 to $95.
From $85 to $95.
From $105 to $115.
From $85 to $95.
From $105 to $115.
From $85 to $95.
From $160 to $175.
From $160 to $175.
From $80 to $90.
From $65 to $70.
From $85 to $95.
From $95 to $120. 9
From $95 to $105.
From $95 to $105.
From $80 to $90.
From $95 to $105.
From $265 to $290.
From $80 to $90.
From $160 to $175.
From $115 to $125.
$125 (No change).
Implementation
FINRA has filed the proposed rule
change for immediate effectiveness.
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(5) of the Act,10 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.
FINRA believes that the proposal
constitutes an equitable allocation of
fees as the qualification examination
fees will be assessed only on those
individuals who take qualification
examinations and the service charge for
foreign test center Regulatory Element
sessions will be assessed only on those
individuals who take such a session. In
addition, all candidates who register for
a particular qualification examination
will be charged the same amount, and
all individuals who take a Regulatory
Element session in a foreign test center
will be assessed the $15 service charge.
FINRA further believes that the
proposed qualification examination
changes are reasonable because they
will more closely align the overall
examination program fees with the
overall costs associated with the
programs. In this regard, FINRA notes
that the last time that it increased fees
for any of the qualification examinations
set forth in Schedule A to the FINRA
By-Laws was January 2009.11 Since that
time, vendor fees and the costs
associated with the enhancement and
8 See Securities Exchange Act Release No. 64687
(June 16, 2011), 76 FR 36586 (June 22, 2011) (Order
Approving Proposed Rule Change; File No. SR–
FINRA–2011–013); Securities Exchange Act Release
No. 65221 (August 30, 2011), 76 FR 55441
(September 7, 2011) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change;
File No. SR–FINRA–2011–042).
9 The $25 fee increase for the Series 52
examination has two components: (1) $15 of the fee
increase is attributable to the MSRB’s increase in
the length of the examination in January 2011, see
Securities Exchange Act Release No. 63310
(November 12, 2010), 75 FR 70760 (November 18,
2010) (Notice of Filing and Immediate Effectiveness
of Proposed Rule Change; File No. SR–MSRB–
2010–12); and (2) $10 of the fee increase is
attributable to the increase in the costs associated
with administering and delivering the examination.
10 15 U.S.C. 78o–3(b)(5).
11 See Securities Exchange Act Release No. 59076
(December 10, 2008), 73 FR 76431 (December 16,
2008) (Order Approving Proposed Rule Change; File
No. SR–FINRA–2008–053).
Service Charge for Foreign Test Center
Regulatory Element Sessions
FINRA assesses a service charge of
$15 for any qualification examination
that is taken in a foreign test center (i.e.,
a test center located outside of the
territorial limits of the United States) to
help offset the higher fees that vendors
charge FINRA for delivering
qualification examinations in such
locations. Vendors also charge FINRA
higher fees for the delivery of
Regulatory Element sessions in foreign
test centers; however, all individuals are
currently assessed the same amount for
a Regulatory Element session regardless
of where they take the session.
Therefore, FINRA is proposing to assess
a $15 service charge for any Regulatory
Element session taken in a foreign test
center to more closely align the fee with
the cost of such sessions.
mstockstill on DSK4VPTVN1PROD with NOTICES
FINRA By-Laws to increase the fees for
the qualification examinations set forth
in Section 4(c), except for the Series 99
Operations Professional examination,
VerDate Mar<15>2010
17:25 Feb 29, 2012
Jkt 226001
2. Statutory Basis
PO 00000
Frm 00084
Fmt 4703
Sfmt 4703
E:\FR\FM\01MRN1.SGM
01MRN1
Federal Register / Vol. 77, No. 41 / Thursday, March 1, 2012 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
maintenance of the PROCTOR system
have increased and, based on current
information, will continue to increase
over the next few years. Specifically,
FINRA has recently completed a
significant technological upgrade of the
PROCTOR system and is working on
considerable enhancements to the
software used to deliver examinations at
testing centers, which is scheduled for
operational release in 2013. These
increased costs, coupled with the
significant decrease in the number of
examinations taken during the past
three years,12 has caused a divergence in
the fees and costs associated with the
examination programs.
To better align the fees and costs
associated with the examination
programs, FINRA is proposing a modest
increase in examination fees. In this
regard, FINRA notes that no
examination fee will increase by more
than $25 and the majority of
examination fees will increase by only
$10. Furthermore, to help control the
overall costs of the qualification
examination and Regulatory Element
programs and thereby minimize fee
increases, FINRA earlier this year
instituted a fee for individuals who
cancel or reschedule a qualification
examination or Regulatory Element
session three to 10 business days prior
to the appointment date.13 This
cancellation/rescheduling fee has
helped to limit the amount of the
proposed examination fee increases by
allowing FINRA to (1) receive a lower
examination delivery rate from one of
its vendors, and (2) apply the revenue
from the fee to help offset the expenses
of the qualification examination
programs.
With respect to the proposed service
charge for foreign test center Regulatory
Element sessions, FINRA believes that
the service charge is reasonable because
it helps to offset the higher delivery
costs associated with such sessions.
Specifically, vendors charge FINRA
higher fees for delivering Regulatory
Element sessions in a foreign test center
than they do for delivering such
sessions in a U.S. test center.
Accordingly, FINRA believes that the
proposed qualification examination fee
changes and the service charge for
foreign test center Regulatory Element
12 In 2009, the number of examinations
administered and delivered by FINRA decreased by
approximately 27 percent. Although examination
volumes have increased modestly since that time,
they have not returned to 2008 levels.
13 See Securities Exchange Act Release No. 64961
(July 26, 2011), 76 FR 45883 (August 1, 2011)
(Notice of Filing and Immediate Effectiveness of
Proposed Rule Change; File No. SR–FINRA–2011–
026).
VerDate Mar<15>2010
17:25 Feb 29, 2012
Jkt 226001
sessions are equitably allocated and
reasonable.
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.
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 14 and paragraph (f)(2) of Rule
19b–4 thereunder.15 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.
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:
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
(https://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 on official business
days between the hours of 10 a.m. and
3 p.m. Copies of such filing also will be
available for inspection and copying at
the principal offices 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–FINRA–2012–009, and
should be submitted on or before March
22, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–4914 Filed 2–29–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66463; File No. SR–
NYSEAMEX–2012–12]
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–FINRA–21012–009 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–FINRA–2012–009. This file
number should be included on the
subject line if email is used.
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing of
Proposed Rule Change Amending the
NYSE Amex Equities Definition of
Approved Person To Exclude Foreign
Affiliates, Eliminating the Application
Process for Approved Persons, and
Making Related Technical and
Conforming Changes
February 24, 2012.
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 February
14, 2012, NYSE Amex LLC (the
16 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
14 15
15 17
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
Frm 00085
Fmt 4703
12637
Sfmt 4703
E:\FR\FM\01MRN1.SGM
01MRN1
]]>Agencies
[Federal Register Volume 77, Number 41 (Thursday, March 1, 2012)]
[Notices]
[Pages 12635-12637]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-4914]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66465; File No. SR-FINRA-2012-009]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Section 4(c) of Schedule A to the FINRA
By-Laws To Increase Qualification Examination Fees and Assess a Service
Charge for Regulatory Element Continuing Education Sessions Taken
Outside the United States
February 24, 2012.
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 February 23, 2012, 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 Section 4(c) of Schedule A to the FINRA
By-Laws to (1) increase qualification examination fees, and (2) assess
a service charge for any Regulatory Element sessions taken in a test
center located outside the territorial limits of the United States. The
text of the proposed rule change is available on FINRA's Web site at
https://www.finra.org, at the principal office of FINRA 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, 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
As discussed in further detail below, the proposed rule change
amends Section 4(c) of Schedule A to the FINRA By-Laws to (1) increase
qualification examination fees, and (2) assess a service charge for any
Regulatory Element session taken in a test center located outside the
territorial limits of the United States.
Qualification Examination Fees
NASD Rules 1021(a) and 1031(a) require that persons engaged, or to
be engaged, in the investment banking or securities business of a FINRA
member who are to function as principals or representatives register
with FINRA in each category of registration appropriate to their
functions as specified in NASD Rules 1022 and 1032.\5\ Such individuals
must pass an appropriate qualification examination before their
registration can become effective. These mandatory qualification
examinations cover a broad range of subjects regarding financial
markets and products, individual responsibilities, securities industry
rules, and regulatory structure. FINRA develops, maintains, and
delivers all qualification examinations for individuals who are
registered or seeking registration with FINRA. FINRA also administers
and delivers examinations sponsored (i.e., developed) by the Municipal
Securities Rulemaking Board (``MSRB''), the North American Securities
Administrators Association, the National Futures Association, the
Federal Deposit Insurance Corporation, and other self-regulatory
organizations.
---------------------------------------------------------------------------
\5\ See also NASD Rules 1041 and 1050 and FINRA Rule 1230(b)(6)
regarding the qualification and registration requirements for Order
Processing Assistant Representatives, Research Analysts and
Operations Professionals, respectively.
---------------------------------------------------------------------------
FINRA currently administers examinations via computer through the
PROCTOR[supreg] system \6\ at testing centers operated by vendors under
contract with FINRA. FINRA charges an examination fee to candidates for
FINRA-sponsored and co-sponsored examinations to cover the development,
maintenance, and delivery of these examinations. For qualification
examinations sponsored by a FINRA client and administered by FINRA,
FINRA charges a delivery fee that represents either a portion of or the
entire examination fee for the examination.\7\
---------------------------------------------------------------------------
\6\ PROCTOR is a computer system that is specifically designed
for the administration and delivery of computer-based testing and
training.
\7\ The delivery fee represents a portion of the entire
examination fee when a FINRA client has established an additional
fee for an examination that it sponsors. For example, the fee to
take the Series 51 (Municipal Fund Securities Limited Principal)
examination is currently $145. Of this amount, $85 is the FINRA
administration and delivery fee, and $60 is the development fee
determined by the FINRA client, the MSRB. See MSRB Rule A-16.
---------------------------------------------------------------------------
FINRA regularly conducts a comprehensive review of the examination
fee structure, including an analysis of the costs associated with
developing, administering, and delivering examinations. Based on the
results of its review, FINRA may propose changes to better align the
examination fee structure with the costs associated with the programs.
In this regard, the most recent review revealed that certain
operational costs have increased and, based on current information,
will continue to increase over the next few years. In particular, these
costs consist of (1) fees that vendors charge FINRA for delivering
qualification examinations, and (2) PROCTOR maintenance and enhancement
expenses. FINRA believes that the proposed rule change will help
[[Page 12636]]
to better align the examination program fees with these costs.
Therefore, FINRA is proposing to amend Section 4(c) of Schedule A
to the FINRA By-Laws to increase the fees for the qualification
examinations set forth in Section 4(c), except for the Series 99
Operations Professional examination, which was implemented in late
2011.\8\ The proposed fee changes are as follows:
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 64687 (June 16,
2011), 76 FR 36586 (June 22, 2011) (Order Approving Proposed Rule
Change; File No. SR-FINRA-2011-013); Securities Exchange Act Release
No. 65221 (August 30, 2011), 76 FR 55441 (September 7, 2011) (Notice
of Filing and Immediate Effectiveness of Proposed Rule Change; File
No. SR-FINRA-2011-042).
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Series 4................................ Registered Options Principal... From $90 to $100.
Series 6................................ Investment Company Products/ From $85 to $95.
Variable Contracts
Representative.
Series 7................................ General Securities From $265 to $290.
Representative.
Series 9................................ General Securities Sales From $70 to $75.
Supervisor--Options Module.
Series 10............................... General Securities Sales From $110 to $120.
Supervisor--General Module.
Series 11............................... Assistant Representative--Order From $70 to $75.
Processing.
Series 14............................... Compliance Official............ From $320 to $335.
Series 16............................... Supervisory Analyst............ From $210 to $230.
Series 17............................... Limited Registered From $70 to $75.
Representative.
Series 22............................... Direct Participation Programs From $85 to $95.
Representative.
Series 23............................... General Securities Principal From $85 to $95.
Sales Supervisor Module.
Series 24............................... General Securities Principal... From $105 to $115.
Series 26............................... Investment Company Products/ From $85 to $95.
Variable Contracts Principal.
Series 27............................... Financial and Operations From $105 to $115.
Principal.
Series 28............................... Introducing Broker-Dealer From $85 to $95.
Financial and Operations
Principal.
Series 37............................... Canada Module of S7 (Options From $160 to $175.
Required).
Series 38............................... Canada Module of S7 (No Options From $160 to $175.
Required).
Series 39............................... Direct Participation Programs From $80 to $90.
Principal.
Series 42............................... Registered Options From $65 to $70.
Representative.
Series 51............................... Municipal Fund Securities From $85 to $95.
Limited Principal.
Series 52............................... Municipal Securities From $95 to $120. \9\
Representative.
Series 53............................... Municipal Securities Principal. From $95 to $105.
Series 55............................... Limited Representative--Equity From $95 to $105.
Trader.
Series 62............................... Corporate Securities Limited From $80 to $90.
Representative.
Series 72............................... Government Securities From $95 to $105.
Representative.
Series 79............................... Investment Banking From $265 to $290.
Qualification Examination.
Series 82............................... Limited Representative--Private From $80 to $90.
Securities Offering.
Series 86............................... Research Analyst--Analysis..... From $160 to $175.
Series 87............................... Research Analyst--Regulatory... From $115 to $125.
Series 99............................... Operations Professional........ $125 (No change).
----------------------------------------------------------------------------------------------------------------
Service Charge for Foreign Test Center Regulatory Element Sessions
FINRA assesses a service charge of $15 for any qualification
examination that is taken in a foreign test center (i.e., a test center
located outside of the territorial limits of the United States) to help
offset the higher fees that vendors charge FINRA for delivering
qualification examinations in such locations. Vendors also charge FINRA
higher fees for the delivery of Regulatory Element sessions in foreign
test centers; however, all individuals are currently assessed the same
amount for a Regulatory Element session regardless of where they take
the session. Therefore, FINRA is proposing to assess a $15 service
charge for any Regulatory Element session taken in a foreign test
center to more closely align the fee with the cost of such sessions.
---------------------------------------------------------------------------
\9\ The $25 fee increase for the Series 52 examination has two
components: (1) $15 of the fee increase is attributable to the
MSRB's increase in the length of the examination in January 2011,
see Securities Exchange Act Release No. 63310 (November 12, 2010),
75 FR 70760 (November 18, 2010) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change; File No. SR-MSRB-2010-12);
and (2) $10 of the fee increase is attributable to the increase in
the costs associated with administering and delivering the
examination.
---------------------------------------------------------------------------
Implementation
FINRA has filed the proposed rule change for immediate
effectiveness. FINRA is proposing that the implementation date of the
proposed rule change will be April 2, 2012. Specifically, the proposed
examination fees would become effective for examination requests made
in the CRD system on or after April 2, 2012. In addition, the proposed
foreign test center Regulatory Element session service charge would
become effective for Regulatory Element sessions completed on or after
April 2, 2012.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(5) of the Act,\10\ 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.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------
FINRA believes that the proposal constitutes an equitable
allocation of fees as the qualification examination fees will be
assessed only on those individuals who take qualification examinations
and the service charge for foreign test center Regulatory Element
sessions will be assessed only on those individuals who take such a
session. In addition, all candidates who register for a particular
qualification examination will be charged the same amount, and all
individuals who take a Regulatory Element session in a foreign test
center will be assessed the $15 service charge.
FINRA further believes that the proposed qualification examination
changes are reasonable because they will more closely align the overall
examination program fees with the overall costs associated with the
programs. In this regard, FINRA notes that the last time that it
increased fees for any of the qualification examinations set forth in
Schedule A to the FINRA By-Laws was January 2009.\11\ Since that time,
vendor fees and the costs associated with the enhancement and
[[Page 12637]]
maintenance of the PROCTOR system have increased and, based on current
information, will continue to increase over the next few years.
Specifically, FINRA has recently completed a significant technological
upgrade of the PROCTOR system and is working on considerable
enhancements to the software used to deliver examinations at testing
centers, which is scheduled for operational release in 2013. These
increased costs, coupled with the significant decrease in the number of
examinations taken during the past three years,\12\ has caused a
divergence in the fees and costs associated with the examination
programs.
---------------------------------------------------------------------------
\11\ See Securities Exchange Act Release No. 59076 (December 10,
2008), 73 FR 76431 (December 16, 2008) (Order Approving Proposed
Rule Change; File No. SR-FINRA-2008-053).
\12\ In 2009, the number of examinations administered and
delivered by FINRA decreased by approximately 27 percent. Although
examination volumes have increased modestly since that time, they
have not returned to 2008 levels.
---------------------------------------------------------------------------
To better align the fees and costs associated with the examination
programs, FINRA is proposing a modest increase in examination fees. In
this regard, FINRA notes that no examination fee will increase by more
than $25 and the majority of examination fees will increase by only
$10. Furthermore, to help control the overall costs of the
qualification examination and Regulatory Element programs and thereby
minimize fee increases, FINRA earlier this year instituted a fee for
individuals who cancel or reschedule a qualification examination or
Regulatory Element session three to 10 business days prior to the
appointment date.\13\ This cancellation/rescheduling fee has helped to
limit the amount of the proposed examination fee increases by allowing
FINRA to (1) receive a lower examination delivery rate from one of its
vendors, and (2) apply the revenue from the fee to help offset the
expenses of the qualification examination programs.
---------------------------------------------------------------------------
\13\ See Securities Exchange Act Release No. 64961 (July 26,
2011), 76 FR 45883 (August 1, 2011) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change; File No. SR-FINRA-2011-026).
---------------------------------------------------------------------------
With respect to the proposed service charge for foreign test center
Regulatory Element sessions, FINRA believes that the service charge is
reasonable because it helps to offset the higher delivery costs
associated with such sessions. Specifically, vendors charge FINRA
higher fees for delivering Regulatory Element sessions in a foreign
test center than they do for delivering such sessions in a U.S. test
center.
Accordingly, FINRA believes that the proposed qualification
examination fee changes and the service charge for foreign test center
Regulatory Element sessions are equitably allocated and reasonable.
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.
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 \14\ and paragraph (f)(2) of Rule 19b-4
thereunder.\15\ 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.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-FINRA-21012-009 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-FINRA-2012-009. 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 (https://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 on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of such filing also will be available for inspection and copying at the
principal offices 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-FINRA-2012-009, and should be submitted on or before
March 22, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-4914 Filed 2-29-12; 8:45 am]
BILLING CODE 8011-01-P
