Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Fees for the New TRACE Security Activity Report and End-of-Day TRACE Transaction File, 51658-51660 [2017-24131]

Download as PDF 51658 Federal Register / Vol. 82, No. 214 / Tuesday, November 7, 2017 / Notices SECURITIES AND EXCHANGE COMMISSION and C below, of the most significant aspects of such statements. [Release No. 34–81995; File No. SR–FINRA– 2017–033] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish Fees for the New TRACE Security Activity Report and End-of-Day TRACE Transaction File November 1, 2017. 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 October 24, 2017, 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to amend Rule 7730 to establish fees for the new TRACE Security Activity Report and End-of-Day TRACE Transaction File. 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. ethrower on DSK3G9T082PROD with NOTICES 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, 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 2 17 VerDate Sep<11>2014 17:29 Nov 06, 2017 Jkt 244001 1. Purpose FINRA’s TRACE data product offerings, set forth in Rule 7730 (Trade Reporting and Compliance Engine (TRACE)), include both real-time as well as historic data for most TRACE-eligible securities.5 The SEC recently approved a new (i) TRACE Security Activity Report and (ii) End-of-Day TRACE Transaction File.6 The new TRACE Security Activity Report is a monthly report that provides aggregated statistics by security for TRACE-Eligible Securities that are Corporate and Agency Bonds (‘‘CA Bonds’’). The report will contain basic descriptive security elements, aggregate par value volume information, number of transactions, number of unique market participant identifiers (‘‘MPIDs’’), and top 5 statistics for disseminated transactions in CA Bonds. The new End-of-Day TRACE Transaction File is a daily file available after the TRACE system closes that includes all transaction data disseminated as part of Real-Time TRACE transaction data on that day and is separately available for each data set for which Real-Time TRACE transaction data is available (i.e., the Corporate Bond Data Set, Agency Data Set, SP Data Set, and Rule 144A Data Set). FINRA is now proposing to amend Rule 7730 to establish fees for the TRACE Security Activity Report and the End-of-Day TRACE Transaction File. FINRA is proposing to establish a fee of $750 per month for receipt of the TRACE Security Activity Report, unless the subscriber is a qualifying tax-exempt organization, in which case FINRA would charge $250 per month. FINRA also is proposing to establish a fee of $750 per month per data set for receipt of the End-of-Day TRACE Transaction File, unless the subscriber is a qualifying tax-exempt organization, in 5 Rule 6710 (Definitions) provides that a ‘‘TRACEEligible Security’’ is a debt security that is United States (‘‘U.S.’’) dollar-denominated and issued by a U.S. or foreign private issuer, and, if a ‘‘restricted security’’ as defined in Securities Act Rule 144(a)(3), sold pursuant to Securities Act Rule 144A; or is a debt security that is U.S. dollardenominated and issued or guaranteed by an Agency as defined in paragraph (k) or a Government-Sponsored Enterprise as defined in paragraph (n); or a U.S. Treasury Security as defined in paragraph (p). ‘‘TRACE-Eligible Security’’ does not include a debt security that is issued by a foreign sovereign or a Money Market Instrument as defined in paragraph (o). 6 Id. [sic] PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 which case FINRA would charge $250 per month per data set. However, subscribers to the Vendor Real-Time Data Feed will not be charged a fee to receive the End-of-Day TRACE Transaction File for the Vendor RealTime data set(s) to which they have subscribed. FINRA believes that these fees are reasonable, and notes that subscribing to each product is optional for members and others. FINRA has filed the proposed rule change for immediate effectiveness. The effective date of the proposed rule change will be the date of effectiveness of the TRACE Security Activity Report and End-of-Day TRACE Transaction File.7 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of 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. Pursuant to the proposal, FINRA will establish fees for (i) the TRACE Security Activity Report that will provide interested parties with a means for receiving aggregated statistics by security for CA Bonds, and (ii) the Endof-Day TRACE Transaction File that will provide interested parties with an alternative means of receiving the transaction information disseminated each trading day as part of the RealTime TRACE transaction data product. The TRACE Security Activity Report will be made available to subscribers for a fee of $750 per month, or $250 per month for qualifying tax-exempt organizations. FINRA believes that the proposed fees are reasonable. The TRACE Security Activity Report is an entirely new report and is not comparable to any current FINRA TRACE data product offering. FINRA cannot at this time estimate the number of persons that may subscribe to the product. However, as indicated by the comment letters received by the Commission on the proposal to adopt 7 See Securities Exchange Act Release No. 81318 (August 4, 2017), 82 FR 37484 (August 10, 2017) (Order Approving File No. SR–FINRA–2017–021); see also Securities Exchange Act Release No. 81114 (July 11, 2017), 82 FR 32728 (July 17, 2017) (Order Approving File No. SR–FINRA–2017–015). FINRA will announce the effective date of each data product in a Regulatory Notice. The effective date will be no later than 365 days following Commission approval of each respective data product. 8 15 U.S.C. 78o–3(b)(5). E:\FR\FM\07NON1.SGM 07NON1 Federal Register / Vol. 82, No. 214 / Tuesday, November 7, 2017 / Notices ethrower on DSK3G9T082PROD with NOTICES the TRACE Security Activity Report,9 FINRA believes that there will be some interest in the report, including in connection with compliance efforts with respect to regulatory obligations under the Investment Company Act of 1940.10 FINRA believes that the fee of $750 per month is reasonable given the costs to be incurred by FINRA in developing the report and providing ongoing administrative, functional and technical support to subscribers, while still being priced at an amount that should allow it to be accessible to interested parties. FINRA also notes that, for a qualifying tax-exempt organization, the fee for the TRACE Security Activity Report will be $250 per month. Where feasible, FINRA generally endeavors to provide TRACE data products to qualifying tax-exempt organizations at a reduced subscription fee to encourage access to TRACE data to facilitate bond market research. The End-of-Day TRACE Transaction File will be made available to subscribers for a fee of $750 per month per data set, $250 per month per data set for qualifying tax-exempt organizations, or at no cost to subscribers to the Vendor Real-Time Data Feed for the Vendor Real-Time data set(s) to which they have subscribed. FINRA believes that the proposed fees are reasonable. FINRA currently charges $1,500 per month per data set for the Vendor RealTime Data Feed. The End-of-Day TRACE Transaction File will provide access to all of the transactions that were disseminated via the Real-Time Data Feed throughout the trading day, but in a single file only available at the end of the trading day. This option not only provides a lower-priced alternative to the Vendor Real-Time Data Feed, it also requires less technological infrastructure from subscribers. Given the current fees established for this somewhat related product, FINRA believes that the proposed fee of $750 per month per data set is reasonable, which is half of the cost of the Vendor Real-Time Data Feed. FINRA also believes this fee is reasonable given the costs to be incurred by FINRA in developing the report and providing ongoing administrative, functional and technical support to subscribers. FINRA also notes that any current subscribers to Vendor Real-Time Data will not be charged a fee for receipt of the End-of9 See letter to Brent J. Fields, Secretary, Commission, from Bennett Golub, Chief Risk Officer, and Alexis Rosenblum, Director, BlackRock, Inc., dated July 20, 2017; and letter to Robert W. Errett, Deputy Secretary, Commission, from Sean Davy, Managing Director, Capital Markets Division, Securities Industry and Financial Markets Association, dated July 20, 2017. 10 17 CFR 270.22e–4. VerDate Sep<11>2014 17:29 Nov 06, 2017 Jkt 244001 Day TRACE Transaction File for the Vendor Real-Time data set(s) to which they have subscribed. FINRA cannot at this time estimate the number of persons that may subscribe to the product; however, as stated in the Notice, some market participants have indicated that a simpler alternative that allows them to receive transaction information once a day in an end-of-day file would be useful.11 As is the case with the TRACE Security Activity Report, FINRA will make the End-ofDay TRACE Transaction File available to qualifying tax-exempt organizations at a reduced subscription fee (of $250 per month per data set) to encourage access to TRACE data to facilitate bond market research. FINRA believes that the proposed fees are reasonable, and notes that the fees will be applied equally to all similarly situated interested parties that choose to subscribe to either data product. Thus, FINRA believes that the proposed rule change is consistent with the Act. 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. The proposal to establish fees in connection with the new TRACE Security Activity Report and End-of-Day TRACE Transaction File applies only to members that choose to subscribe to these data products, and the proposed fees for each data product will apply equally to all similarly situated subscribers. Subscribers to the Vendor Real-Time Data Feed will not be charged a fee to receive the End-of-Day TRACE Transaction File for the Vendor Real-Time data set(s) to which they have subscribed. 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 11 See Securities Exchange Act Release No. 80805 (May 30, 2017), 82 FR 25862 (June 5, 2017) (Notice of Filing of File No. SR–FINRA–2017–015) (‘‘Notice’’). 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b–4(f)(2). PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 51659 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–2017–033 on the subject line. Paper Comments • Send paper comments in triplicate to Robert W. Errett, Deputy Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–FINRA–2017–033. 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, 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 such filing also will be available for inspection and copying at the principal office of FINRA. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal E:\FR\FM\07NON1.SGM 07NON1 51660 Federal Register / Vol. 82, No. 214 / Tuesday, November 7, 2017 / Notices identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–FINRA– 2017–033 and should be submitted on or before November 28, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–24131 Filed 11–6–17; 8:45 am] BILLING CODE 8011–01–P investment trusts outside of the same group of investment companies as the series to acquire Shares; and (f) certain series to create and redeem Shares in kind in a master-feeder structure. The Order would incorporate by reference terms and conditions of a previous order granting the same relief sought by applicants, as that order may be amended from time to time (‘‘Reference Order’’).1 The application was filed on October 4, 2017 and amended on October 12, 2017. FILING DATE: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on November 27, 2017, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. HEARING OR NOTIFICATION OF HEARING: SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 32892; 812–14830] Reinhart Partners, Inc., et al. November 1, 2017. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. ethrower on DSK3G9T082PROD with NOTICES AGENCY: Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 22c–1 under the Act, under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and (a)(2) of the Act, and under section 12(d)(1)(J) of the Act for an exemption from sections 12(d)(1)(A) and (B) of the Act. APPLICANTS: Reinhart Partners, Inc. (the ‘‘Adviser’’), Managed Portfolio Series (the ‘‘Trust’’), and Quasar Distributors, LLC (the ‘‘Distributor’’). SUMMARY OF APPLICATION: Applicants request an order (‘‘Order’’) that permits: (a) Actively managed series of certain open-end management investment companies to issue shares (‘‘Shares’’) redeemable in large aggregations only (‘‘Creation Units’’); (b) secondary market transactions in Shares to occur at the next-determined net asset value plus or minus a market-determined premium or discount that may vary during the trading day; (c) certain series to pay redemption proceeds, under certain circumstances, more than seven days from the tender of Shares for redemption; (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of Creation Units; (e) certain registered management investment companies and unit 14 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:29 Nov 06, 2017 Jkt 244001 Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. Applicants: Reinhart Partners, Inc., 1500 West Market Street, Suite 100, Mequon, Wisconsin 53092; Managed Portfolio Series, 615 East Michigan Street, 4th Floor, Milwaukee, Wisconsin 53202; Quasar Distributors, LLC, 777 East Wisconsin Avenue, 6th Floor, Milwaukee, Wisconsin 53202. ADDRESSES: Summary of the Application 1. The Trust is registered as an openend management investment company under the Act and is a statutory trust organized under the laws of Delaware. Applicants seek relief with respect to Reinhart Intermediate Bond NextShares (the ‘‘Initial Fund’’). The portfolio positions of each Fund (as defined below) will consist of securities and other assets selected and managed by its Adviser or Subadviser (as defined below) to pursue the Fund’s investment objective. 2. The Adviser, a Wisconsin corporation, will be the investment adviser to the Initial Fund. An Adviser (as defined below) will serve as investment adviser to each Fund. The Adviser is, and any other Adviser will be, registered as an investment adviser under the Investment Advisers Act of 1940 (‘‘Advisers Act’’). The Adviser may retain one or more subadvisers (each a ‘‘Subadviser’’) to manage the portfolios of the Funds. Any Subadviser will be registered, or not subject to registration, under the Advisers Act. 3. The Distributor is a Delaware limited liability company and a brokerdealer registered under the Securities Exchange Act of 1934 and will act as the principal underwriter of Shares of the Funds. Applicants request that the requested relief apply to any distributor of Shares, whether affiliated or unaffiliated with the Adviser (included in the term ‘‘Distributor’’). Any Distributor will comply with the terms and conditions of the Order. Requested Exemptive Relief The following is a summary of the application. The complete application may be obtained via the Commission’s Web site by searching for the file number, or for an applicant using the Company name box, at https:// www.sec.gov/search/search.htm or by calling (202) 551–8090. 4. Applicants seek the requested Order under section 6(c) of the Act for an exemption from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 22c–1 under the Act, under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and 17(a)(2) of the Act, and under section 12(d)(1)(J) of the Act for an exemption from sections 12(d)(1)(A) and (B) of the Act. The requested Order would permit applicants to offer exchange-traded managed funds. Because the relief requested is the same as the relief granted by the Commission under the Reference Order and because the Adviser has entered into, or anticipates entering into, a licensing agreement with Eaton Vance Management, or an affiliate thereof in order to offer exchange-traded managed funds,2 the Order would incorporate by reference 1 Eaton Vance Management, et al., Investment Company Act Rel. Nos. 31333 (Nov. 6, 2014) (notice) and 31361 (Dec. 2, 2014) (order). 2 Eaton Vance Management has obtained patents with respect to certain aspects of the Funds’ method of operation as exchange-traded managed funds. FOR FURTHER INFORMATION CONTACT: Courtney S. Thornton, Senior Counsel, at (202) 551–6812, or Robert H. Shapiro, Branch Chief, at (202) 551–6821 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 E:\FR\FM\07NON1.SGM 07NON1

Agencies

[Federal Register Volume 82, Number 214 (Tuesday, November 7, 2017)]
[Notices]
[Pages 51658-51660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24131]



[[Page 51658]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81995; File No. SR-FINRA-2017-033]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Establish Fees for the New TRACE Security 
Activity Report and End-of-Day TRACE Transaction File

November 1, 2017.
    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 October 24, 2017, 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to amend Rule 7730 to establish fees for the new 
TRACE Security Activity Report and End-of-Day TRACE Transaction File.
    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
    FINRA's TRACE data product offerings, set forth in Rule 7730 (Trade 
Reporting and Compliance Engine (TRACE)), include both real-time as 
well as historic data for most TRACE-eligible securities.\5\ The SEC 
recently approved a new (i) TRACE Security Activity Report and (ii) 
End-of-Day TRACE Transaction File.\6\ The new TRACE Security Activity 
Report is a monthly report that provides aggregated statistics by 
security for TRACE-Eligible Securities that are Corporate and Agency 
Bonds (``CA Bonds''). The report will contain basic descriptive 
security elements, aggregate par value volume information, number of 
transactions, number of unique market participant identifiers 
(``MPIDs''), and top 5 statistics for disseminated transactions in CA 
Bonds. The new End-of-Day TRACE Transaction File is a daily file 
available after the TRACE system closes that includes all transaction 
data disseminated as part of Real-Time TRACE transaction data on that 
day and is separately available for each data set for which Real-Time 
TRACE transaction data is available (i.e., the Corporate Bond Data Set, 
Agency Data Set, SP Data Set, and Rule 144A Data Set).
---------------------------------------------------------------------------

    \5\ Rule 6710 (Definitions) provides that a ``TRACE-Eligible 
Security'' is a debt security that is United States (``U.S.'') 
dollar-denominated and issued by a U.S. or foreign private issuer, 
and, if a ``restricted security'' as defined in Securities Act Rule 
144(a)(3), sold pursuant to Securities Act Rule 144A; or is a debt 
security that is U.S. dollar-denominated and issued or guaranteed by 
an Agency as defined in paragraph (k) or a Government-Sponsored 
Enterprise as defined in paragraph (n); or a U.S. Treasury Security 
as defined in paragraph (p). ``TRACE-Eligible Security'' does not 
include a debt security that is issued by a foreign sovereign or a 
Money Market Instrument as defined in paragraph (o).
    \6\ Id. [sic]
---------------------------------------------------------------------------

    FINRA is now proposing to amend Rule 7730 to establish fees for the 
TRACE Security Activity Report and the End-of-Day TRACE Transaction 
File. FINRA is proposing to establish a fee of $750 per month for 
receipt of the TRACE Security Activity Report, unless the subscriber is 
a qualifying tax-exempt organization, in which case FINRA would charge 
$250 per month. FINRA also is proposing to establish a fee of $750 per 
month per data set for receipt of the End-of-Day TRACE Transaction 
File, unless the subscriber is a qualifying tax-exempt organization, in 
which case FINRA would charge $250 per month per data set. However, 
subscribers to the Vendor Real-Time Data Feed will not be charged a fee 
to receive the End-of-Day TRACE Transaction File for the Vendor Real-
Time data set(s) to which they have subscribed. FINRA believes that 
these fees are reasonable, and notes that subscribing to each product 
is optional for members and others.
    FINRA has filed the proposed rule change for immediate 
effectiveness. The effective date of the proposed rule change will be 
the date of effectiveness of the TRACE Security Activity Report and 
End-of-Day TRACE Transaction File.\7\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 81318 (August 4, 
2017), 82 FR 37484 (August 10, 2017) (Order Approving File No. SR-
FINRA-2017-021); see also Securities Exchange Act Release No. 81114 
(July 11, 2017), 82 FR 32728 (July 17, 2017) (Order Approving File 
No. SR-FINRA-2017-015). FINRA will announce the effective date of 
each data product in a Regulatory Notice. The effective date will be 
no later than 365 days following Commission approval of each 
respective data product.
---------------------------------------------------------------------------

2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------

    Pursuant to the proposal, FINRA will establish fees for (i) the 
TRACE Security Activity Report that will provide interested parties 
with a means for receiving aggregated statistics by security for CA 
Bonds, and (ii) the End-of-Day TRACE Transaction File that will provide 
interested parties with an alternative means of receiving the 
transaction information disseminated each trading day as part of the 
Real-Time TRACE transaction data product. The TRACE Security Activity 
Report will be made available to subscribers for a fee of $750 per 
month, or $250 per month for qualifying tax-exempt organizations. FINRA 
believes that the proposed fees are reasonable.
    The TRACE Security Activity Report is an entirely new report and is 
not comparable to any current FINRA TRACE data product offering. FINRA 
cannot at this time estimate the number of persons that may subscribe 
to the product. However, as indicated by the comment letters received 
by the Commission on the proposal to adopt

[[Page 51659]]

the TRACE Security Activity Report,\9\ FINRA believes that there will 
be some interest in the report, including in connection with compliance 
efforts with respect to regulatory obligations under the Investment 
Company Act of 1940.\10\ FINRA believes that the fee of $750 per month 
is reasonable given the costs to be incurred by FINRA in developing the 
report and providing ongoing administrative, functional and technical 
support to subscribers, while still being priced at an amount that 
should allow it to be accessible to interested parties. FINRA also 
notes that, for a qualifying tax-exempt organization, the fee for the 
TRACE Security Activity Report will be $250 per month. Where feasible, 
FINRA generally endeavors to provide TRACE data products to qualifying 
tax-exempt organizations at a reduced subscription fee to encourage 
access to TRACE data to facilitate bond market research.
---------------------------------------------------------------------------

    \9\ See letter to Brent J. Fields, Secretary, Commission, from 
Bennett Golub, Chief Risk Officer, and Alexis Rosenblum, Director, 
BlackRock, Inc., dated July 20, 2017; and letter to Robert W. 
Errett, Deputy Secretary, Commission, from Sean Davy, Managing 
Director, Capital Markets Division, Securities Industry and 
Financial Markets Association, dated July 20, 2017.
    \10\ 17 CFR 270.22e-4.
---------------------------------------------------------------------------

    The End-of-Day TRACE Transaction File will be made available to 
subscribers for a fee of $750 per month per data set, $250 per month 
per data set for qualifying tax-exempt organizations, or at no cost to 
subscribers to the Vendor Real-Time Data Feed for the Vendor Real-Time 
data set(s) to which they have subscribed. FINRA believes that the 
proposed fees are reasonable. FINRA currently charges $1,500 per month 
per data set for the Vendor Real-Time Data Feed. The End-of-Day TRACE 
Transaction File will provide access to all of the transactions that 
were disseminated via the Real-Time Data Feed throughout the trading 
day, but in a single file only available at the end of the trading day. 
This option not only provides a lower-priced alternative to the Vendor 
Real-Time Data Feed, it also requires less technological infrastructure 
from subscribers. Given the current fees established for this somewhat 
related product, FINRA believes that the proposed fee of $750 per month 
per data set is reasonable, which is half of the cost of the Vendor 
Real-Time Data Feed. FINRA also believes this fee is reasonable given 
the costs to be incurred by FINRA in developing the report and 
providing ongoing administrative, functional and technical support to 
subscribers. FINRA also notes that any current subscribers to Vendor 
Real-Time Data will not be charged a fee for receipt of the End-of-Day 
TRACE Transaction File for the Vendor Real-Time data set(s) to which 
they have subscribed. FINRA cannot at this time estimate the number of 
persons that may subscribe to the product; however, as stated in the 
Notice, some market participants have indicated that a simpler 
alternative that allows them to receive transaction information once a 
day in an end-of-day file would be useful.\11\ As is the case with the 
TRACE Security Activity Report, FINRA will make the End-of-Day TRACE 
Transaction File available to qualifying tax-exempt organizations at a 
reduced subscription fee (of $250 per month per data set) to encourage 
access to TRACE data to facilitate bond market research.
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release No. 80805 (May 30, 
2017), 82 FR 25862 (June 5, 2017) (Notice of Filing of File No. SR-
FINRA-2017-015) (``Notice'').
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    FINRA believes that the proposed fees are reasonable, and notes 
that the fees will be applied equally to all similarly situated 
interested parties that choose to subscribe to either data product. 
Thus, FINRA believes that the proposed rule change is consistent with 
the Act.

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. The proposal to establish fees 
in connection with the new TRACE Security Activity Report and End-of-
Day TRACE Transaction File applies only to members that choose to 
subscribe to these data products, and the proposed fees for each data 
product will apply equally to all similarly situated subscribers. 
Subscribers to the Vendor Real-Time Data Feed will not be charged a fee 
to receive the End-of-Day TRACE Transaction File for the Vendor Real-
Time data set(s) to which they have subscribed.

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-2017-033 on the subject line.

Paper Comments

     Send paper comments in triplicate to Robert W. Errett, 
Deputy Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-FINRA-2017-033. 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, 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 such filing also will be available 
for inspection and copying at the principal office of FINRA. All 
comments received will be posted without change. Persons submitting 
comments are cautioned that we do not redact or edit personal

[[Page 51660]]

identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-FINRA-2017-033 and should be 
submitted on or before November 28, 2017.

    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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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24131 Filed 11-6-17; 8:45 am]
 BILLING CODE 8011-01-P
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