Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 2.9, 65421-65424 [2024-17687]
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Federal Register / Vol. 89, No. 154 / Friday, August 9, 2024 / Notices
whether to disapprove, the proposed
rule change (File No. SR–CboeBYX–
2024–009).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–17696 Filed 8–8–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–035, OMB Control No.
3235–0029]
ddrumheller on DSK120RN23PROD with NOTICES1
Submission for OMB Review;
Comment Request; Extension: Rule
17f–2(c)
Upon Written Request, Copies
Available From: Securities and
Exchange Commission, Office of FOIA
Services, 100 F Street NE, Washington,
DC 20549–2736.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for approval of
extension of the previously approved
collection of information provided for in
Rule 17f–2(c) (17 CFR 240.17f–2(c)),
under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.).
Rule 17f–2(c) allows persons required
to be fingerprinted pursuant to Section
17(f)(2) of the Act to submit their
fingerprints to the Attorney General of
the United States or its designee (i.e.,
the Federal Bureau of Investigation
(‘‘FBI’’)) through a registered national
securities exchange or a registered
national securities association
(collectively, also known as ‘‘selfregulatory organizations’’ or ‘‘SROs’’)
pursuant to a fingerprint plan filed with,
and declared effective by, the
Commission. Fingerprint plans have
been approved for the American,
Boston, Chicago, New York, and
Philadelphia stock exchanges and for
the Financial Industry Regulatory
Authority (‘‘FINRA’’) and the Chicago
Board Options Exchange. Currently, the
bulk of the fingerprints are submitted
through FINRA.
It is estimated that 3,800 respondents
submit approximately 278,455 sets of
fingerprints (consisting of
approximately 258,646 electronic sets
and 19,809 hard copy sets) to SROs on
an annual basis. The Commission
estimates that it takes approximately 15
minutes to create and submit each
fingerprint card. The total time burden
is therefore estimated to be
approximately 69,614 hours per year.
In addition, the SROs charge an
estimated $31 fee for processing
fingerprint cards submitted
electronically, resulting in a total annual
cost to all 3,800 respondents of
approximately $8,018,026 per year. The
SROs charge an estimated $41 fee for
processing fingerprint cards submitted
in hard copy, resulting in a total annual
cost to all 3,800 respondents of
approximately $812,169 per year. The
combined annual cost to all respondents
is thus approximately $8,830,195 per
year.
Because the FBI will not accept
fingerprint cards directly from
submitting organizations, Commission
approval of fingerprint plans from
certain SROs is essential to carry out the
Congressional goal to fingerprint
securities industry personnel. Filing
these plans for review assures users and
their personnel that fingerprint cards
will be handled responsibly and with
due care for confidentiality.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent by
September 9, 2024 to (i)
www.reginfo.gov/public/do/PRAMain
and (ii) Austin Gerig, Director/Chief
Data Officer, Securities and Exchange
Commission, c/o Oluwaseun Ajayi, 100
F Street NE, Washington, DC 20549, or
by sending an email to: PRA_Mailbox@
sec.gov.
Dated: August 6, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–17727 Filed 8–8–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100658; File No. SR–
NYSENAT–2024–21]
Self-Regulatory Organizations; NYSE
National, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 2.9
August 5, 2024.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on July 25,
2024, NYSE National, Inc. (‘‘NYSE
National’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 2.9 (Dues, Assessments and Other
Charges) to permit direct debiting of
undisputed or final fees or other sums
due the Exchange by ETP Holders with
one or more Trading Permits and each
applicant for a Trading Permit. The
proposed rule change is available on the
Exchange’s website at www.nyse.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
6 17
CFR 200.30–3(a)(31).
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Federal Register / Vol. 89, No. 154 / Friday, August 9, 2024 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
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The Exchange proposes to amend
Rule 2.9 (Dues, Assessments and Other
Charges) to permit direct debiting of
undisputed or final fees or other sums
due the Exchange by ETP Holders with
one or more Trading Permits and each
applicant for a Trading Permit.
Rule 2.9 currently provides that the
Exchange may prescribe such
reasonable assessments, dues or other
charges as it may, in its discretion, deem
appropriate. The rule further provides
that such assessments and charges shall
be equitably allocated among ETP
Holders, issuers and other persons using
the Exchange’s facilities.
The Exchange proposes to require that
ETP Holders that hold a Trading Permit,
and each applicant for a Trading Permit,
provide one or more clearing account
numbers that correspond to an
account(s) at the National Securities
Clearing Corporation (‘‘NSCC’’) for
purposes of permitting the Exchange to
collect through direct debit any
undisputed or final fees and/or other
sums due to the Exchange. The
Exchange would, however, permit an
ETP Holder or applicant for a Trading
Permit to opt-out of the requirement to
provide NSCC clearing account numbers
and establish alternative payment
arrangements. In addition, consistent
with current Rule 3.8 (Liability for
Payment), the proposed change would
not apply to disciplinary fines or
monetary sanctions governed by Rule
10.8320. The proposed rule would also
not apply to regulatory fees related to
the Central Registration Depository
(‘‘CRD system’’), which are collected by
the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’).4 The
proposed change is based on the rules
of the Exchange’s affiliates NYSE
American LLC (‘‘NYSE American’’) and
4 The CRD system is the central licensing and
registration system for the U.S. securities industry.
The CRD system enables individuals and firms
seeking registration with multiple states and selfregulatory organizations to do so by submitting a
single form, fingerprint card and a combined
payment of fees to FINRA. Through the CRD
system, FINRA maintains the qualification,
employment and disciplinary histories of registered
associated persons of broker-dealers. Certain of the
regulatory fees provided in the Schedule of Fees
and Rebates are collected and retained by FINRA
via the CRD system for the registration of ETP
Holders and employees of ETP Holders that are not
FINRA members. These fees would be excluded
from direct debiting.
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NYSE Chicago, Inc. (‘‘NYSE Chicago’’)
as well as other exchanges.5
Under the proposal, the Exchange
would send a monthly invoice to each
ETP Holder, generally on the 5th
business day of each month as is
currently the practice, for the debit
amount due to the Exchange for the
prior month. The Exchange would also
send files to NSCC each month on or
about the 11th business day of the
month in order to initiate the debit of
the amount due to the Exchange as
provided for in the prior month’s
invoice.6 The Exchange anticipates that
NSCC will process the debits on the day
it receives the file or the following
business day. Because ETP Holders
would be provided with an invoice
approximately 1 week before the debit
date, ETP Holders will have adequate
time to contact the Exchange with any
questions concerning the invoice. If an
ETP Holder disagrees with the invoice
in whole or in part, the Exchange would
not commence the debit for the disputed
amount until the dispute is resolved.
Specifically, the Exchange would not
include the disputed amount (or the
entire invoice if it is not feasible to
identify the disputed amounts) in the
NSCC debit amount where the ETP
Holder provides written notification of
the dispute to the Exchange by the later
of the 15th of the month, or the
5 See NYSE American Rule 41 (Collection of and
Failure to Pay Exchange Fees); NYSE Chicago
Article 7, Rule 11 (Fixing and Paying Fees and
Charges). See also, e.g., MEMX LLC (‘‘MEMX’’) Rule
15.3(a) (Collection of Exchange Fees and Other
Claims and Billing Policy) requires each MEMX
member and all applicants for registration as
members are required to provide one or more
clearing account numbers that correspond to an
account(s) at the NSCC for purposes of permitting
the Exchange to debit certain fees, fines, charges
and/or other monetary sanctions or other monies
due to the Exchange. As noted, the proposed rule
would not apply to disciplinary fines or monetary
sanctions, and the proposal does not propose to
change this. The MEMX rule also requires members
to submit billing disputes within a certain time
period. The Exchange’s current billing disputes
policy is set forth in the first bullet under ‘‘Fees and
Credits Applicable to Market Participants’’ in the
Schedule of Fees and Rebates, available at https://
www.nyse.com/publicdocs/nyse/regulation/nyse/
NYSE_National_Schedule_of_Fees.pdf, and
provides that all fee disputes must be submitted no
later than sixty days after receipt of a billing
invoice. The proposal does not modify or rescind
the Exchange’s billing disputes policy, and that
policy would continue to apply to all billing
disputes.
6 As discussed below, if an ETP Holder disputes
an invoice, the Exchange would not include the
disputed amount in the automatic debit if the ETP
Holder has disputed the amount in writing to the
Exchange by the 15th of the month, or the following
business day if the 15th is not a business day, and
the disputed amount is at least $10,000 or greater.
As a practical matter, the Exchange would not send
a file to the NSCC until the proposed time in Rule
2.9 for a member organization to dispute an invoice
subject to automatic debit has passed.
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following business day if the 15th is not
a business day, and the amount in
dispute is at least $10,000 or greater.
Following receipt of the file from the
Exchange, NSCC would proceed to debit
the amounts indicated from the account
of the ETP Holder that clears the
applicable transactions (‘‘Clearing ETP
Holder,’’ i.e., either an ETP Holder that
is self-clearing or another ETP Holder
that provides clearing services on behalf
of the ETP Holder) and disburse such
amounts to the Exchange. Where an ETP
Holder clears through another a ETP
Holder, the Exchange understands that
the estimated transaction fees owed to
the Exchange are typically debited by
the Clearing ETP Holder on a daily basis
using daily transaction detail reports
provided by the Exchange to the
Clearing ETP Holder in order to ensure
adequate funds have been escrowed.
The Exchange notes that it is proposing
to permit an ETP Holder to designate
one or more clearing account numbers
that correspond to an account(s) at
NSCC to permit ETP Holders that clear
through multiple different clearing
accounts to set up the billing process
with the Exchange in a manner that is
most efficient for internal reconciliation
and billing purposes of the ETP Holder.
The Exchange believes that the
proposed debiting process would
provide an efficient method of
collecting undisputed or final fees
and/or sums due to the Exchange
consistent with the practice on other
exchanges.7 Moreover, the Exchange
believes that it is reasonable to permit
an ETP Holder and applicants for a
Trading Permit to opt-out of the
requirement to provide an NSCC
account number to permit direct
debiting and instead establish
alternative payment arrangements.
Finally, the Exchange believes that it is
also reasonable to provide for a $10,000
limitation on pre-debit billing disputes
since it would be inefficient to delay a
direct debit for a de minimis amount.
An ETP Holder would still be able to
dispute billing amounts that are less
than $10,000 pursuant to the billing
policy set forth in the Schedule of Fees
and Rebates.8
To effectuate this change, the
Exchange would add the following text
to Rule 2.9 (italicized):
Each ETP Holder that has one or more
Trading Permits, and each applicant for
a Trading Permit, shall be required to
7 See note 5, supra. In addition to MEMX, IEX,
Nasdaq, Nasdaq BX, and Nasdaq Phlx all provide
for collection of fees and fines through direct debits.
See IEX Rule 15.120; Nasdaq Rule Equity 7, Section
70; Nasdaq BX Rule Equity 7, Section 111; and
Nasdaq Phlx Rule Equity 7, Section 2.
8 See note 5, supra.
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provide one or more clearing account
numbers that correspond to an
account(s) at the National Securities
Clearing Corporation (‘‘NSCC ’’) for
purposes of permitting the Exchange to
collect through direct debit any
undisputed or final fees and/or other
sums due to the Exchange; provided,
however, that an ETP Holder or
applicant may request to opt-out of the
requirement to provide an NSCC
clearing account number and establish
alternative payment arrangements. If an
ETP Holder disputes an invoice, the
Exchange will not include the disputed
amount in the debit if the ETP Holder
has disputed the amount in writing to
the Exchange by the 15th of the month,
or the following business day if the 15th
is not a business day, and the amount
in dispute is at least $10,000 or greater.
The Exchange will not debit fees related
to the CRD system set forth in the
Schedule of Fees and Rebates, which
are collected and retained by FINRA.
The remaining provisions of the
current rule would remain unchanged.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act,9
in general, and furthers the objectives of
Section 6(b)(5),10 in particular, because
it is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments to, and perfect the
mechanism of, a free and open market
and a national market system and, in
general, to protect investors and the
public interest. Specifically, the
Exchange believes that the proposed
direct debit process would provide ETP
Holders with an efficient process to pay
undisputed or final fees and/or sums
due to the Exchange.
The Exchange believes that the
proposal to debit NSCC accounts
directly is reasonable because it would
ease the administrative burden on ETP
Holders of paying monthly invoices and
avoiding overdue balances, and would
provide efficient collection from all ETP
Holders who owe monies to the
Exchange. Moreover, the Exchange
believes that the minimum time frame
provided to ETP Holders to dispute
invoices is reasonable and adequate to
enable ETP Holders to identify
potentially erroneous charges. In
addition, the Exchange believes that the
$10,000 limitation on pre-debit billing
disputes is reasonable because it would
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
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be inefficient to delay a direct debit for
a de minimis amount. The same $10,000
limitation is in place on exchanges that
have adopted direct debit rules.11 ETP
Holders will still be able to dispute
billing amounts that are less than
$10,000 pursuant to the Exchange’s
Schedule of Fees and Rebates. Finally,
the Exchange believes that it is
reasonable to permit ETP Holders or
applicants to request to opt-out of the
requirement to provide NSCC account
information and instead establish
alternative payment arrangements with
the Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change would apply
uniformly to all ETP Holders that have
one or more Trading Permits and to all
applicants for Trading Permits, and will
not disproportionately burden or
otherwise impact any single ETP
Holder.
The Exchange does not believe that
the proposal will create an intermarket
burden on competition since the
Exchange will only debit fees (other
than de minimis fees below $10,000)
that are undisputed by the ETP Holder
and ETP Holders will have a reasonable
opportunity to dispute the fees both
before and after the direct debit process.
In addition, ETP Holders will have a
reasonable opportunity to opt-out of the
requirement to provide clearing account
information and instead adopt
alternative payment arrangements.
The Exchange also does not believe
that the proposal will create an
intramarket burden on competition,
since the proposed direct debit process
will be applied equally to all ETP
Holders. Moreover, other exchanges
utilize a similar process which the
Exchange believes is generally familiar
to ETP Holders. Consequently, the
Exchange does not believe that the
proposal raises any new or novel issues
that have not been previously
considered by the Commission in
connection with direct debit and billing
policies of other exchanges. Further,
this proposal is expected to provide a
cost savings to the Exchange in that it
would alleviate administrative
processes related to the collection of
monies owed to the Exchange. In
addition, the debiting process would
mitigate against ETP Holder accounts
becoming overdue.
11 See
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65423
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 12 and Rule
19b–4(f)(6) thereunder.13 Because the
proposed rule change does not: (i)
significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 14 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),15 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 16 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
12 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
14 Id. In addition, Rule 19b–4(f)(6)(iii) requires the
Exchange to give the Commission written notice of
the Exchange’s intent to file the proposed rule
change along with a brief description and the text
of the proposed rule change, at least five business
days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this prefiling requirement.
15 17 CFR 240.19b–4(f)(6)(iii).
16 15 U.S.C. 78s(b)(2)(B).
13 17
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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:
SECURITIES AND EXCHANGE
COMMISSION
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–
NYSENAT–2024–21 on the subject line.
Self-Regulatory Organizations; Cboe
EDGA Exchange, Inc.; Suspension of
and Order Instituting Proceedings To
Determine Whether To Approve or
Disapprove Proposed Rule Change To
Amend the Exchange’s Fee Schedule
Related to Physical Port Fees
ddrumheller on DSK120RN23PROD with NOTICES1
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–NYSENAT–2024–21. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (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 website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–NYSENAT–2024–21 and should be
submitted on or before August 30, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–17687 Filed 8–8–24; 8:45 am]
BILLING CODE 8011–01–P
17 17
CFR 200.30–3(a)(12).
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[Release No. 34–100650; File No. SR–
CboeEDGA–2024–022]
August 5, 2024
I. Introduction
On June 7, 2024, Cboe EDGA
Exchange, Inc. (the ‘‘Exchange’’ or
‘‘EDGA’’) filed with the Securities and
Exchange Commission (‘‘Commission’’
or ‘‘SEC’’), pursuant to Section 19(b)(1)
of the Securities Exchange Act of 1934
(‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule
19b–4 thereunder,2 a proposed rule
change (File Number SR–CboeEDGA–
2024–022) to increase fees for 10 gigabit
(‘‘Gb’’) physical ports (‘‘Proposal’’). The
proposed rule change was immediately
effective upon filing with the
Commission pursuant to Section
19(b)(3)(A) of the Act.3 The proposed
rule change was published for comment
in the Federal Register on June 21,
2024.4 Pursuant to Section 19(b)(3)(C) of
the Act,5 the Commission is hereby: (1)
temporarily suspending the proposed
rule change; and (2) instituting
proceedings to determine whether to
approve or disapprove the proposed
rule change.
II. Background and Description of the
Proposed Rule Change
The Exchange proposes to amend its
fee schedule relating to physical
connectivity fees by increasing the
monthly fee for 10 Gb physical ports
from $7,500 to $8,500 per port.6 The
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A). A proposed rule change
may take effect upon filing with the Commission if
it is designated by the exchange as ‘‘establishing or
changing a due, fee, or other charge imposed by the
self-regulatory organization on any person, whether
or not the person is a member of the self-regulatory
organization.’’ 15 U.S.C. 78s(b)(3)(A)(ii).
4 See Securities Exchange Act Release No. 100349
(June 14, 2024), 89 FR 52118 (June 21, 2024)
(‘‘Notice’’).
5 15 U.S.C. 78s(b)(3)(C).
6 See Notice, 89 FR at 52118. The Exchange
initially filed the proposed fee changes on July 3,
2023 (SR–CboeEDGA–2023–011). On September 1,
2023, the Exchange withdrew that filing and
submitted SR–CboeEDGA–2023–015. On September
29, 2023, the Exchange states that the Securities and
Exchange Commission issued a Suspension of and
Order Instituting Proceedings to Determine whether
to Approve or Disapprove a Proposed Rule Change
to Amend its Fees Schedule Related to Physical
Port Fees. See Notice, 89 FR at 52118 n.3. On
2 17
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Exchanges states that, by way of
background, a physical port is utilized
by a Member or non-Member to connect
to the Exchange at the data centers
where the Exchange’s servers are
located.7 Prior to this proposed rule
change, the Exchange assessed the
following physical connectivity fees for
Members and non-Members on a
monthly basis: $2,500 per physical port
for a 1 Gb circuit and $7,500 per
physical port for a 10 Gb circuit.8 The
Exchange states the proposed fee change
better enables it to continue to maintain
and improve its market technology and
services and also notes that the
proposed fee amount, even as amended,
continues to be in line with, or even
lower than, amounts assessed by other
exchanges for similar connections.9 The
Exchange also states that a single 10 Gb
physical port can be used to access the
Systems of the following affiliate
exchanges: the Cboe BYX Exchange,
Inc., Cboe BZX Exchange, Inc. (options
and equities platforms), Cboe EDGX
Exchange, Inc. (options and equities
platforms), and Cboe C2 Exchange, Inc.
(‘‘Affiliate Exchanges’’).10 The Exchange
states that only one monthly fee applies
per 10 Gb physical port regardless of
how many affiliated exchanges are
accessed through that one port.11
September 29, 2023, the Exchange filed the
proposed fee change (SR–CboeEDGA–2023–016).
On October 13, 2023, the Exchange withdrew that
filing and submitted SR–CboeEDGA–2023–017. On
December 12, 2023, the Exchange withdrew that
filing and submitted SR–CboeEDGA–2023–022. On
February 9, 2024, the Exchange withdrew that filing
and submitted SR–CboeEDGA–2024–006. On April
9, 2024, the Exchange withdrew that filing and
submitted SR–CboeEDGA–2024–013. On June 7,
2024, the Exchange withdrew that filing and
submitted SR–CboeEDGA–2024–022.
7 See Notice, 89 FR at 52118.
8 See Notice, 89 FR at 52118.
9 See Notice, 89 FR at 52118 (citing The Nasdaq
Stock Market LLC (‘‘Nasdaq’’), General 8,
Connectivity to the Exchange. Nasdaq and its
affiliated exchanges charge a monthly fee of $15,000
for each 10Gb Ultra fiber connection to the
respective exchange, which is analogous to the
Exchange’s 10Gb physical port. See also id. (citing
New York Stock Exchange LLC, NYSE American
LLC, NYSE Arca, Inc., NYSE Chicago Inc., NYSE
National, Inc. Connectivity Fee Schedule, which
provides that 10 Gb LX LCN Circuits (which are
analogous to the Exchange’s 10 Gb physical port)
are assessed $22,000 per month, per port.)).
10 See Notice, 89 FR at 52118. The Affiliate
Exchanges are also submitted contemporaneous
substantively similar rule filings.
11 See Notice, 89 FR at 52118. The Exchange
states that conversely, other exchange groups charge
separate port fees for access to separate, but
affiliated, exchanges. See Notice, 89 FR at 52118 n.6
(citing Securities and Exchange Release No. 99822
(March 21, 2024), 89 FR 21337 (March 27, 2024)
(SR–MIAX–2024–016)).
E:\FR\FM\09AUN1.SGM
09AUN1
]]>Agencies
[Federal Register Volume 89, Number 154 (Friday, August 9, 2024)]
[Notices]
[Pages 65421-65424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17687]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100658; File No. SR-NYSENAT-2024-21]
Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 2.9
August 5, 2024.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on July 25, 2024, NYSE National, Inc. (``NYSE National'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 2.9 (Dues, Assessments and
Other Charges) to permit direct debiting of undisputed or final fees or
other sums due the Exchange by ETP Holders with one or more Trading
Permits and each applicant for a Trading Permit. The proposed rule
change is available on the Exchange's website at www.nyse.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
[[Page 65422]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 2.9 (Dues, Assessments and
Other Charges) to permit direct debiting of undisputed or final fees or
other sums due the Exchange by ETP Holders with one or more Trading
Permits and each applicant for a Trading Permit.
Rule 2.9 currently provides that the Exchange may prescribe such
reasonable assessments, dues or other charges as it may, in its
discretion, deem appropriate. The rule further provides that such
assessments and charges shall be equitably allocated among ETP Holders,
issuers and other persons using the Exchange's facilities.
The Exchange proposes to require that ETP Holders that hold a
Trading Permit, and each applicant for a Trading Permit, provide one or
more clearing account numbers that correspond to an account(s) at the
National Securities Clearing Corporation (``NSCC'') for purposes of
permitting the Exchange to collect through direct debit any undisputed
or final fees and/or other sums due to the Exchange. The Exchange
would, however, permit an ETP Holder or applicant for a Trading Permit
to opt-out of the requirement to provide NSCC clearing account numbers
and establish alternative payment arrangements. In addition, consistent
with current Rule 3.8 (Liability for Payment), the proposed change
would not apply to disciplinary fines or monetary sanctions governed by
Rule 10.8320. The proposed rule would also not apply to regulatory fees
related to the Central Registration Depository (``CRD system''), which
are collected by the Financial Industry Regulatory Authority, Inc.
(``FINRA'').\4\ The proposed change is based on the rules of the
Exchange's affiliates NYSE American LLC (``NYSE American'') and NYSE
Chicago, Inc. (``NYSE Chicago'') as well as other exchanges.\5\
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\4\ The CRD system is the central licensing and registration
system for the U.S. securities industry. The CRD system enables
individuals and firms seeking registration with multiple states and
self-regulatory organizations to do so by submitting a single form,
fingerprint card and a combined payment of fees to FINRA. Through
the CRD system, FINRA maintains the qualification, employment and
disciplinary histories of registered associated persons of broker-
dealers. Certain of the regulatory fees provided in the Schedule of
Fees and Rebates are collected and retained by FINRA via the CRD
system for the registration of ETP Holders and employees of ETP
Holders that are not FINRA members. These fees would be excluded
from direct debiting.
\5\ See NYSE American Rule 41 (Collection of and Failure to Pay
Exchange Fees); NYSE Chicago Article 7, Rule 11 (Fixing and Paying
Fees and Charges). See also, e.g., MEMX LLC (``MEMX'') Rule 15.3(a)
(Collection of Exchange Fees and Other Claims and Billing Policy)
requires each MEMX member and all applicants for registration as
members are required to provide one or more clearing account numbers
that correspond to an account(s) at the NSCC for purposes of
permitting the Exchange to debit certain fees, fines, charges and/or
other monetary sanctions or other monies due to the Exchange. As
noted, the proposed rule would not apply to disciplinary fines or
monetary sanctions, and the proposal does not propose to change
this. The MEMX rule also requires members to submit billing disputes
within a certain time period. The Exchange's current billing
disputes policy is set forth in the first bullet under ``Fees and
Credits Applicable to Market Participants'' in the Schedule of Fees
and Rebates, available at https://www.nyse.com/publicdocs/nyse/regulation/nyse/NYSE_National_Schedule_of_Fees.pdf, and provides
that all fee disputes must be submitted no later than sixty days
after receipt of a billing invoice. The proposal does not modify or
rescind the Exchange's billing disputes policy, and that policy
would continue to apply to all billing disputes.
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Under the proposal, the Exchange would send a monthly invoice to
each ETP Holder, generally on the 5th business day of each month as is
currently the practice, for the debit amount due to the Exchange for
the prior month. The Exchange would also send files to NSCC each month
on or about the 11th business day of the month in order to initiate the
debit of the amount due to the Exchange as provided for in the prior
month's invoice.\6\ The Exchange anticipates that NSCC will process the
debits on the day it receives the file or the following business day.
Because ETP Holders would be provided with an invoice approximately 1
week before the debit date, ETP Holders will have adequate time to
contact the Exchange with any questions concerning the invoice. If an
ETP Holder disagrees with the invoice in whole or in part, the Exchange
would not commence the debit for the disputed amount until the dispute
is resolved. Specifically, the Exchange would not include the disputed
amount (or the entire invoice if it is not feasible to identify the
disputed amounts) in the NSCC debit amount where the ETP Holder
provides written notification of the dispute to the Exchange by the
later of the 15th of the month, or the following business day if the
15th is not a business day, and the amount in dispute is at least
$10,000 or greater.
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\6\ As discussed below, if an ETP Holder disputes an invoice,
the Exchange would not include the disputed amount in the automatic
debit if the ETP Holder has disputed the amount in writing to the
Exchange by the 15th of the month, or the following business day if
the 15th is not a business day, and the disputed amount is at least
$10,000 or greater. As a practical matter, the Exchange would not
send a file to the NSCC until the proposed time in Rule 2.9 for a
member organization to dispute an invoice subject to automatic debit
has passed.
---------------------------------------------------------------------------
Following receipt of the file from the Exchange, NSCC would proceed
to debit the amounts indicated from the account of the ETP Holder that
clears the applicable transactions (``Clearing ETP Holder,'' i.e.,
either an ETP Holder that is self-clearing or another ETP Holder that
provides clearing services on behalf of the ETP Holder) and disburse
such amounts to the Exchange. Where an ETP Holder clears through
another a ETP Holder, the Exchange understands that the estimated
transaction fees owed to the Exchange are typically debited by the
Clearing ETP Holder on a daily basis using daily transaction detail
reports provided by the Exchange to the Clearing ETP Holder in order to
ensure adequate funds have been escrowed. The Exchange notes that it is
proposing to permit an ETP Holder to designate one or more clearing
account numbers that correspond to an account(s) at NSCC to permit ETP
Holders that clear through multiple different clearing accounts to set
up the billing process with the Exchange in a manner that is most
efficient for internal reconciliation and billing purposes of the ETP
Holder.
The Exchange believes that the proposed debiting process would
provide an efficient method of collecting undisputed or final fees and/
or sums due to the Exchange consistent with the practice on other
exchanges.\7\ Moreover, the Exchange believes that it is reasonable to
permit an ETP Holder and applicants for a Trading Permit to opt-out of
the requirement to provide an NSCC account number to permit direct
debiting and instead establish alternative payment arrangements.
Finally, the Exchange believes that it is also reasonable to provide
for a $10,000 limitation on pre-debit billing disputes since it would
be inefficient to delay a direct debit for a de minimis amount. An ETP
Holder would still be able to dispute billing amounts that are less
than $10,000 pursuant to the billing policy set forth in the Schedule
of Fees and Rebates.\8\
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\7\ See note 5, supra. In addition to MEMX, IEX, Nasdaq, Nasdaq
BX, and Nasdaq Phlx all provide for collection of fees and fines
through direct debits. See IEX Rule 15.120; Nasdaq Rule Equity 7,
Section 70; Nasdaq BX Rule Equity 7, Section 111; and Nasdaq Phlx
Rule Equity 7, Section 2.
\8\ See note 5, supra.
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To effectuate this change, the Exchange would add the following
text to Rule 2.9 (italicized):
Each ETP Holder that has one or more Trading Permits, and each
applicant for a Trading Permit, shall be required to
[[Page 65423]]
provide one or more clearing account numbers that correspond to an
account(s) at the National Securities Clearing Corporation (``NSCC '')
for purposes of permitting the Exchange to collect through direct debit
any undisputed or final fees and/or other sums due to the Exchange;
provided, however, that an ETP Holder or applicant may request to opt-
out of the requirement to provide an NSCC clearing account number and
establish alternative payment arrangements. If an ETP Holder disputes
an invoice, the Exchange will not include the disputed amount in the
debit if the ETP Holder has disputed the amount in writing to the
Exchange by the 15th of the month, or the following business day if the
15th is not a business day, and the amount in dispute is at least
$10,000 or greater. The Exchange will not debit fees related to the CRD
system set forth in the Schedule of Fees and Rebates, which are
collected and retained by FINRA.
The remaining provisions of the current rule would remain
unchanged.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\9\ in general, and furthers the objectives of Section 6(b)(5),\10\
in particular, because it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system and, in general, to protect investors and
the public interest. Specifically, the Exchange believes that the
proposed direct debit process would provide ETP Holders with an
efficient process to pay undisputed or final fees and/or sums due to
the Exchange.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposal to debit NSCC accounts
directly is reasonable because it would ease the administrative burden
on ETP Holders of paying monthly invoices and avoiding overdue
balances, and would provide efficient collection from all ETP Holders
who owe monies to the Exchange. Moreover, the Exchange believes that
the minimum time frame provided to ETP Holders to dispute invoices is
reasonable and adequate to enable ETP Holders to identify potentially
erroneous charges. In addition, the Exchange believes that the $10,000
limitation on pre-debit billing disputes is reasonable because it would
be inefficient to delay a direct debit for a de minimis amount. The
same $10,000 limitation is in place on exchanges that have adopted
direct debit rules.\11\ ETP Holders will still be able to dispute
billing amounts that are less than $10,000 pursuant to the Exchange's
Schedule of Fees and Rebates. Finally, the Exchange believes that it is
reasonable to permit ETP Holders or applicants to request to opt-out of
the requirement to provide NSCC account information and instead
establish alternative payment arrangements with the Exchange.
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\11\ See notes 7 & 8, supra.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change
would apply uniformly to all ETP Holders that have one or more Trading
Permits and to all applicants for Trading Permits, and will not
disproportionately burden or otherwise impact any single ETP Holder.
The Exchange does not believe that the proposal will create an
intermarket burden on competition since the Exchange will only debit
fees (other than de minimis fees below $10,000) that are undisputed by
the ETP Holder and ETP Holders will have a reasonable opportunity to
dispute the fees both before and after the direct debit process. In
addition, ETP Holders will have a reasonable opportunity to opt-out of
the requirement to provide clearing account information and instead
adopt alternative payment arrangements.
The Exchange also does not believe that the proposal will create an
intramarket burden on competition, since the proposed direct debit
process will be applied equally to all ETP Holders. Moreover, other
exchanges utilize a similar process which the Exchange believes is
generally familiar to ETP Holders. Consequently, the Exchange does not
believe that the proposal raises any new or novel issues that have not
been previously considered by the Commission in connection with direct
debit and billing policies of other exchanges. Further, this proposal
is expected to provide a cost savings to the Exchange in that it would
alleviate administrative processes related to the collection of monies
owed to the Exchange. In addition, the debiting process would mitigate
against ETP Holder accounts becoming overdue.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
Because the proposed rule change does not: (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
---------------------------------------------------------------------------
\14\ Id. In addition, Rule 19b-4(f)(6)(iii) requires the
Exchange to give the Commission written notice of the Exchange's
intent to file the proposed rule change along with a brief
description and the text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this pre-filing requirement.
\15\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\16\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
[[Page 65424]]
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 [email protected]. Please include
file number SR-NYSENAT-2024-21 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSENAT-2024-21. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (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 website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NYSENAT-2024-21 and should
be submitted on or before August 30, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-17687 Filed 8-8-24; 8:45 am]
BILLING CODE 8011-01-P
