Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Limited Waiver of the TRACE Professional Real-Time Data Display Fee Pilot, 60003-60005 [2013-23683]
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Federal Register / Vol. 78, No. 189 / Monday, September 30, 2013 / Notices
FICC–2013–08) be and hereby is
approved.15
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2013–23682 Filed 9–27–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70483; File No. SR–FINRA–
2013–040]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Extend the Limited
Waiver of the TRACE Professional
Real-Time Data Display Fee Pilot
September 24, 2013.
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
September 17, 2013, the 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 19b4(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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
tkelley on DSK3SPTVN1PROD with NOTICES
FINRA is proposing to amend FINRA
Rule 7730(c)(1)(A)(i) to extend the pilot
program to November 7, 2014. The pilot
program provides a limited waiver of
the Professional Real-Time Data Display
Fee of $60 to access Real-Time Trade
Reporting and Compliance Engine
(‘‘TRACE’’) transaction data in
15 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
16 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).
VerDate Mar<15>2010
18:06 Sep 27, 2013
Jkt 229001
connection with certain free trials of
data products.
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.
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 FINRA Rule
7730(c)(1)(A), FINRA charges a
Professional $60 per month, per display
application per Data Set 5 of Real-Time 6
TRACE transaction data. The fee waiver
pilot program in FINRA Rule
7730(c)(1)(A)(i) waives the $60 fee for
one month for a Professional to access
Real-Time TRACE transaction data in
connection with a vendor’s offer of a
free trial of a data product that displays
Real-Time TRACE transaction data.7
5 FINRA makes Real-Time TRACE transaction
data available in three Data Sets—the Corporate
Bond Data Set, the Agency Data Set and the ABS
Data Set. A fourth Data Set, the Rule 144A Data Set,
will become available in 2014. See Securities
Exchange Act Release No. 70345 (September 6,
2013), 78 FR 56251 (September 12, 2013) (Order
Approving File No. SR–FINRA–2013–029) (SEC
approves a proposed rule change to disseminate
transactions in TRACE-Eligible Securities that are
effected pursuant to Rule 144A (17 CFR 239.144A)
under the Securities Act of 1933 (15 U.S.C. 77a et
seq.) and to establish the Rule 144A Data Set).
6 Real-Time is defined in FINRA Rule 7730(f)(3).
7 See Securities Exchange Act Release No. 68255
(November 19, 2012), 77 FR 70515 (November 26,
2012) (Notice of Filing and Immediate Effectiveness
of File No. SR–FINRA–2012–049) (proposed rule
change establishing the fee waiver pilot program).
In general, Real-Time TRACE transaction data is
accessed not directly from FINRA but through a
vendor, such as Bloomberg, L.P. and its Bloomberg
display application, or other redistributors
(collectively, ‘‘vendors’’) of financial market data.
Under this arrangement, a Professional pays the
vendor for the license to use the vendor’s display
application and if the display application displays
Real-Time TRACE transaction data, the payment
must include the applicable TRACE fee, which the
vendor remits to FINRA. Vendors continually
develop new products and offer free trials of such
products to members and other Professional end
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60003
The fee waiver pilot program permits
Professionals to access Real-Time
TRACE transaction data on a free trial
basis in connection, and concurrently,
with the free trial of the vendor’s
product. The pilot program will expire
on November 8, 2013.
FINRA proposes to extend the fee
waiver pilot program approximately one
year to November 7, 2014 to permit
more time to assess the effectiveness of
the pilot program. All other terms and
conditions of the fee waiver pilot
program would remain the same. The
FINRA fee waiver would continue to be
limited to one month (i.e., a period not
longer than 31 days). In addition, the
FINRA fee waiver would continue to be
available to not more than four
Professionals associated with, employed
by, or otherwise affiliated with a
member, employer or other person
during one free trial period.8 As is
currently the case, once the Real-Time
Data Display Fee had been waived, a
Professional and the member, employer
or other person whom the Professional
is associated with, employed by, or
otherwise affiliated with would not be
eligible for the FINRA fee waiver again
in connection with another free trial
offered by the same vendor until 12
months had lapsed from the last day of
the prior fee waiver.9 However, a
Professional and the member, employer
or other person with whom the
Professional is associated or otherwise
affiliated would be eligible for a FINRA
fee waiver in connection with a free trial
offered by a different vendor regarding
its data products.
FINRA has filed the proposed rule
change for immediate effectiveness. The
implementation date will be the date of
filing.
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,10 which
requires, among other things, that
users of market data. Such new products may
display, among other data, Real-Time TRACE
transaction data.
8 The fee waiver pilot program is not applicable
to Professionals associated with, employed by or
otherwise affiliated with entities that obtain
unlimited internal use of market data through any
number of display applications by paying a flat fee
of $7,500 (per month per Data Set) under Rule
7730(c)(1)(A) (‘‘enterprise fee’’). The enterprise fee
structure is inconsistent with the limitation that the
fee waiver apply to not more than four Professionals
per entity per trial period.
9 For example, if a Professional were granted a
waiver for one month beginning on November 15,
2013, the Professional would not be eligible for
another waiver in connection with another free trial
offered by the same vendor until December 15,
2014.
10 15 U.S.C. 78o-3(b)(6).
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Federal Register / Vol. 78, No. 189 / Monday, September 30, 2013 / Notices
FINRA rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest, and Section 15A(b)(5) of
the Act,11 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
proposed extension of the pilot
program, which encourages additional
Professionals to test and use Real-Time
TRACE transaction data, may promote
more accurate and timely pricing and
valuations of debt securities by
members, and may prevent fraudulent
and manipulative acts and practices
regarding pricing and valuations, for the
protection of investors and the public
interest.
FINRA believes that the extension of
the pilot program providing for a
limited waiver of the monthly fee per
display application for access to RealTime TRACE transaction data also
results in reasonable fees and financial
benefits from fee waivers that are
equitably allocated. The financial
benefit of the fee waiver would be
available to all Professionals that accept
an offer to test a vendor data product
that includes Real-Time TRACE
transaction data on a free trial basis.
Any Professional that tests data
products during a free trial would be
eligible for and would benefit from the
concurrent FINRA fee waiver, subject to
the proscriptions against a Professional
obtaining multiple free trials as
previously described.
In addition, the financial benefit of
the fee waiver would be available for a
very limited period (i.e., 31 days or
less), such that Professionals not eligible
for the fee waiver are not unfairly or
inequitably affected. The proposed
extension of the pilot period is
reasonable because the waiver of a
standard FINRA fee, and the financial
benefit from such waiver, is of limited
amount, duration (i.e., one month) and
application (i.e., only four Professionals
per member (or other end-user)), limited
to concurrent free trials of data products
offered by vendors, and subject to
restrictions on re-use, and is being
proposed to enhance a member’s ability
to access and test, among other things,
the uses of Real-Time TRACE
transaction data to determine if access
to such Real-Time TRACE transaction
data would further its business needs.
11 15
18:06 Sep 27, 2013
B. Self-Regulatory Organization’s
Statement on Burden on Competition
FINRA does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. FINRA
believes that the proposed extension of
the fee waiver pilot program, which is
designed to encourage additional
Professionals to test and use Real-Time
TRACE transaction data, may promote
more accurate and timely pricing and
valuations of debt securities by
members. Moreover, the extension of
the pilot program would not place an
unreasonable fee burden on members
and other persons (i.e., Professionals)
that currently subscribe to receive RealTime TRACE transaction data, nor
confer an uncompetitive benefit to
Professionals taking advantage of the
pilot program, in that the fee waiver
would be available for a very limited
period (i.e., 31 days or less), and the
financial impact of such a pilot program
on Professionals would be de minimis.
In addition, the proposed rule change
does not place a burden on competition
in that the financial benefit of the fee
waiver would be available in general to
all Professionals. Any Professional that
tests data products during a free trial
would be eligible for and would benefit
from the concurrent FINRA fee waiver,
subject to the proscriptions against a
Professional obtaining multiple free
trials previously described.
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.
U.S.C. 78o-3(b)(5).
VerDate Mar<15>2010
Finally, the proposed extension of the
fee waiver pilot program does not
unfairly discriminate between or among
Professionals and members (or other
end-users) in that the waiver would be
available to any of such persons that
accepts an offer to test a vendor data
product that includes Real-Time TRACE
transaction data on a free trial basis,
subject to the limitations described
above. The data vendor, rather than
FINRA, would decide initially whether
to offer a free trial of its data product to
a particular Professional, member, or
other end-user. FINRA’s role is limited
to refusing to extend a fee waiver to a
particular person previously identified
by the data vendor, due to the
prohibition against extending multiple
fee waivers to the same person.
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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 12 and paragraph (f)(2) of Rule
19b-4 thereunder.13 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:
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–2013–040 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–2013–040. 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
12 15
13 17
E:\FR\FM\30SEN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b-4(f)(2).
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Federal Register / Vol. 78, No. 189 / Monday, September 30, 2013 / Notices
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 FINRA. All comments received
will be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR-FINRA–
2013–040 and should be submitted on
or before October 21, 2013.
notice is hereby given that on
September 12, 2013, The NASDAQ
Stock Market LLC (‘‘NASDAQ’’ or
‘‘Exchange’’) 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 NASDAQ. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
NASDAQ is proposing changes to
modify Chapter XV, entitled ‘‘Options
Pricing,’’ at Section 2 governing pricing
for NASDAQ members using the
NASDAQ Options Market (‘‘NOM’’).
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaq.cchwallstreet.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
[FR Doc. 2013–23683 Filed 9–27–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70489; File No. SR–
NASDAQ–2013–120]
Self-Regulatory Organizations; the
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Modify
Chapter XV, at Section 2 Governing
Pricing for NASDAQ Members Using
the NASDAQ Options Market (‘‘NOM’’)
September 24, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
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. 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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NASDAQ proposes to modify Chapter
XV, entitled ‘‘Options Pricing,’’ at
Section 2(1) governing the rebates and
fees assessed for option orders entered
into NOM. The Exchange proposes to (1)
lower the Tier 6 volume threshold from
130,000 or more contracts per day in a
month to 115,000 or more contracts per
day in a month; (2) lower the Tier 7
volume threshold from 175,000 or more
contracts per day in a month to 150,000
or more contracts per day in a month;
and (3) include Non-Penny Pilot
Options Customer and/or Professional
volume that adds liquidity to compute
the numerator in the calculation of
percentage of total industry customer
equity and ETF option average daily
volume to qualify for certain tiers of the
Customer or Professional Penny Pilot
Options rebate program.
Today, the Exchange offers tiered
Penny Pilot Options Rebates to Add
Liquidity to Customers,3 Professionals 4
and NOM Market Makers 5 and a $0.10
per contract rebate in Penny Pilot
Options to liquidity added by Firms,6
Non-NOM Market Makers 7 and BrokerDealers.8 With respect to Customers and
Professionals, the Exchange pays Penny
Pilot Options Rebates to Add Liquidity
based on various criteria with rebates
currently ranging from $0.25 to $0.48
per contract as follows:
Rebate
to add
liquidity
Monthly volume
Tier 1 Participant adds Customer and/or Professional liquidity of up to 0.20% of total industry customer equity and ETF option
average daily volume (‘‘ADV’’) contracts per day in a month .............................................................................................................
Tier 2 Participant adds Customer and/or Professional liquidity of 0.21% to 0.30% of total industry customer equity and ETF option ADV contracts per day in a month ...............................................................................................................................................
Tier 3 Participant adds Customer and/or Professional liquidity of 0.31% to 0.49% of total industry customer equity and ETF option ADV contracts per day in a month ...............................................................................................................................................
Tier 4 Participant adds Customer and/or Professional liquidity of 0.5% or more of total industry customer equity and ETF option
ADV contracts per day in a month ......................................................................................................................................................
Tier 5 Participant adds (1) Customer and/or Professional liquidity of 25,000 or more contracts per day in a month, (2) the Participant has certified for the Investor Support Program set forth in Rule 7014, and (3) the Participant executed at least one order
on NASDAQ’s equity market ...............................................................................................................................................................
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 The term ‘‘Customer’’ applies to any transaction
that is identified by a Participant for clearing in the
Customer range at The Options Clearing
Corporation (‘‘OCC’’) which is not for the account
of broker or dealer or for the account of a
‘‘Professional’’ (as that term is defined in Chapter
I, Section 1(a)(48).
4 The term ‘‘Professional’’ means any person or
entity that (i) is not a broker or dealer in securities,
and (ii) places more than 390 orders in listed
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18:50 Sep 27, 2013
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options per day on average during a calendar month
for its own beneficial account(s) pursuant to
Chapter I, Section 1(a)(48)). All Professional orders
shall be appropriately marked by Participants.
5 The term ‘‘NOM Market Maker’’ is a Participant
that has registered as a Market Maker on NOM
pursuant to Chapter VII, Section 2, and must also
remain in good standing pursuant to Chapter VII,
Section 4. In order to receive NOM Market Maker
pricing in all securities, the Participant must be
registered as a NOM Market Maker in at least one
security. NOM Market Maker Rebates range from
$0.25 to $0.38 per contract depending on various
criteria.
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$0.25
0.40
0.43
0.45
0.42
6 The term ‘‘Firm’’ or (‘‘F’’) applies to any
transaction that is identified by a Participant for
clearing in the Firm range at OCC.
7 The term ‘‘Non-NOM Market Maker’’ or (‘‘O’’) is
a registered market maker on another options
exchange that is not a NOM Market Maker. A NonNOM Market Maker must append the proper NonNOM Market Maker designation to orders routed to
NOM.
8 The term ‘‘Broker-Dealer’’ or (‘‘B’’) applies to
any transaction which is not subject to any of the
other transaction fees applicable within a particular
category.
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]]>Agencies
[Federal Register Volume 78, Number 189 (Monday, September 30, 2013)]
[Notices]
[Pages 60003-60005]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23683]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70483; File No. SR-FINRA-2013-040]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change to Extend the Limited Waiver of the TRACE
Professional Real-Time Data Display Fee Pilot
September 24, 2013.
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 September 17, 2013, the 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 Substance
of the Proposed Rule Change
FINRA is proposing to amend FINRA Rule 7730(c)(1)(A)(i) to extend
the pilot program to November 7, 2014. The pilot program provides a
limited waiver of the Professional Real-Time Data Display Fee of $60 to
access Real-Time Trade Reporting and Compliance Engine (``TRACE'')
transaction data in connection with certain free trials of data
products.
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
Pursuant to FINRA Rule 7730(c)(1)(A), FINRA charges a Professional
$60 per month, per display application per Data Set \5\ of Real-Time
\6\ TRACE transaction data. The fee waiver pilot program in FINRA Rule
7730(c)(1)(A)(i) waives the $60 fee for one month for a Professional to
access Real-Time TRACE transaction data in connection with a vendor's
offer of a free trial of a data product that displays Real-Time TRACE
transaction data.\7\
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\5\ FINRA makes Real-Time TRACE transaction data available in
three Data Sets--the Corporate Bond Data Set, the Agency Data Set
and the ABS Data Set. A fourth Data Set, the Rule 144A Data Set,
will become available in 2014. See Securities Exchange Act Release
No. 70345 (September 6, 2013), 78 FR 56251 (September 12, 2013)
(Order Approving File No. SR-FINRA-2013-029) (SEC approves a
proposed rule change to disseminate transactions in TRACE-Eligible
Securities that are effected pursuant to Rule 144A (17 CFR 239.144A)
under the Securities Act of 1933 (15 U.S.C. 77a et seq.) and to
establish the Rule 144A Data Set).
\6\ Real-Time is defined in FINRA Rule 7730(f)(3).
\7\ See Securities Exchange Act Release No. 68255 (November 19,
2012), 77 FR 70515 (November 26, 2012) (Notice of Filing and
Immediate Effectiveness of File No. SR-FINRA-2012-049) (proposed
rule change establishing the fee waiver pilot program).
In general, Real-Time TRACE transaction data is accessed not
directly from FINRA but through a vendor, such as Bloomberg, L.P.
and its Bloomberg display application, or other redistributors
(collectively, ``vendors'') of financial market data. Under this
arrangement, a Professional pays the vendor for the license to use
the vendor's display application and if the display application
displays Real-Time TRACE transaction data, the payment must include
the applicable TRACE fee, which the vendor remits to FINRA. Vendors
continually develop new products and offer free trials of such
products to members and other Professional end users of market data.
Such new products may display, among other data, Real-Time TRACE
transaction data.
---------------------------------------------------------------------------
The fee waiver pilot program permits Professionals to access Real-
Time TRACE transaction data on a free trial basis in connection, and
concurrently, with the free trial of the vendor's product. The pilot
program will expire on November 8, 2013.
FINRA proposes to extend the fee waiver pilot program approximately
one year to November 7, 2014 to permit more time to assess the
effectiveness of the pilot program. All other terms and conditions of
the fee waiver pilot program would remain the same. The FINRA fee
waiver would continue to be limited to one month (i.e., a period not
longer than 31 days). In addition, the FINRA fee waiver would continue
to be available to not more than four Professionals associated with,
employed by, or otherwise affiliated with a member, employer or other
person during one free trial period.\8\ As is currently the case, once
the Real-Time Data Display Fee had been waived, a Professional and the
member, employer or other person whom the Professional is associated
with, employed by, or otherwise affiliated with would not be eligible
for the FINRA fee waiver again in connection with another free trial
offered by the same vendor until 12 months had lapsed from the last day
of the prior fee waiver.\9\ However, a Professional and the member,
employer or other person with whom the Professional is associated or
otherwise affiliated would be eligible for a FINRA fee waiver in
connection with a free trial offered by a different vendor regarding
its data products.
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\8\ The fee waiver pilot program is not applicable to
Professionals associated with, employed by or otherwise affiliated
with entities that obtain unlimited internal use of market data
through any number of display applications by paying a flat fee of
$7,500 (per month per Data Set) under Rule 7730(c)(1)(A)
(``enterprise fee''). The enterprise fee structure is inconsistent
with the limitation that the fee waiver apply to not more than four
Professionals per entity per trial period.
\9\ For example, if a Professional were granted a waiver for one
month beginning on November 15, 2013, the Professional would not be
eligible for another waiver in connection with another free trial
offered by the same vendor until December 15, 2014.
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FINRA has filed the proposed rule change for immediate
effectiveness. The implementation date will be the date of filing.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\10\ which requires, among
other things, that
[[Page 60004]]
FINRA rules must be designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
and, in general, to protect investors and the public interest, and
Section 15A(b)(5) of the Act,\11\ 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 proposed extension of the pilot program, which
encourages additional Professionals to test and use Real-Time TRACE
transaction data, may promote more accurate and timely pricing and
valuations of debt securities by members, and may prevent fraudulent
and manipulative acts and practices regarding pricing and valuations,
for the protection of investors and the public interest.
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\10\ 15 U.S.C. 78o-3(b)(6).
\11\ 15 U.S.C. 78o-3(b)(5).
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FINRA believes that the extension of the pilot program providing
for a limited waiver of the monthly fee per display application for
access to Real-Time TRACE transaction data also results in reasonable
fees and financial benefits from fee waivers that are equitably
allocated. The financial benefit of the fee waiver would be available
to all Professionals that accept an offer to test a vendor data product
that includes Real-Time TRACE transaction data on a free trial basis.
Any Professional that tests data products during a free trial would be
eligible for and would benefit from the concurrent FINRA fee waiver,
subject to the proscriptions against a Professional obtaining multiple
free trials as previously described.
In addition, the financial benefit of the fee waiver would be
available for a very limited period (i.e., 31 days or less), such that
Professionals not eligible for the fee waiver are not unfairly or
inequitably affected. The proposed extension of the pilot period is
reasonable because the waiver of a standard FINRA fee, and the
financial benefit from such waiver, is of limited amount, duration
(i.e., one month) and application (i.e., only four Professionals per
member (or other end-user)), limited to concurrent free trials of data
products offered by vendors, and subject to restrictions on re-use, and
is being proposed to enhance a member's ability to access and test,
among other things, the uses of Real-Time TRACE transaction data to
determine if access to such Real-Time TRACE transaction data would
further its business needs.
Finally, the proposed extension of the fee waiver pilot program
does not unfairly discriminate between or among Professionals and
members (or other end-users) in that the waiver would be available to
any of such persons that accepts an offer to test a vendor data product
that includes Real-Time TRACE transaction data on a free trial basis,
subject to the limitations described above. The data vendor, rather
than FINRA, would decide initially whether to offer a free trial of its
data product to a particular Professional, member, or other end-user.
FINRA's role is limited to refusing to extend a fee waiver to a
particular person previously identified by the data vendor, due to the
prohibition against extending multiple fee waivers to the same person.
B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. FINRA believes that the
proposed extension of the fee waiver pilot program, which is designed
to encourage additional Professionals to test and use Real-Time TRACE
transaction data, may promote more accurate and timely pricing and
valuations of debt securities by members. Moreover, the extension of
the pilot program would not place an unreasonable fee burden on members
and other persons (i.e., Professionals) that currently subscribe to
receive Real-Time TRACE transaction data, nor confer an uncompetitive
benefit to Professionals taking advantage of the pilot program, in that
the fee waiver would be available for a very limited period (i.e., 31
days or less), and the financial impact of such a pilot program on
Professionals would be de minimis. In addition, the proposed rule
change does not place a burden on competition in that the financial
benefit of the fee waiver would be available in general to all
Professionals. Any Professional that tests data products during a free
trial would be eligible for and would benefit from the concurrent FINRA
fee waiver, subject to the proscriptions against a Professional
obtaining multiple free trials previously described.
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 \12\ and paragraph (f)(2) of Rule 19b-4
thereunder.\13\ 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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(2).
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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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-FINRA-2013-040 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-2013-040. 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
[[Page 60005]]
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 FINRA. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly. All submissions should refer to File Number
SR-FINRA-2013-040 and should be submitted on or before October 21,
2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-23683 Filed 9-27-13; 8:45 am]
BILLING CODE 8011-01-P
