Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change Regarding Registration and Qualification Requirements for Associated Persons, 80091-80097 [2010-31951]
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Federal Register / Vol. 75, No. 244 / Tuesday, December 21, 2010 / Notices
to all similarly situated Exchange
participants.
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.
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 foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) of the Act 5 and
subparagraph (f)(2) of Rule 19b–4
thereunder,6 because it establishes a
due, fee, or other charge imposed by
NYSE Amex.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSEAmex–2010–119 on
the subject line.
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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–NYSEAmex–2010–119.
This file number should be included on
the subject line if e-mail is used. To help
the Commission process and review
your comments more efficiently, please
use only one method. The Commission
will post all comments on the
Commission’s Internet Web site (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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEAmex–2010–119 and should be
submitted on or before January 11, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–31950 Filed 12–20–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63554; File No. SR–ISE–
2010–115]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing of Proposed Rule
Change Regarding Registration and
Qualification Requirements for
Associated Persons
December 15, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
1, 2010, the International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) filed with the Securities and
7 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
5 15
U.S.C. 78s(b)(3)(A).
6 17 CFR 240.19b–4(f)(2).
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Exchange 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 ISE proposes to amend its rules
to amend its rules [sic] regarding the
registration of associated persons. The
text of the proposed rule change is
provided below (italics indicate
additions; [brackets] indicate deletions):
Rule 313. Registration Requirements
(a) Registration of Individual
Associated Persons Engaged in the
Securities Business.
(1) Individual associated persons
engaged or to be engaged in the
securities business of a Member shall be
registered with the Exchange in the
category of registration appropriate to
the function to be performed as
prescribed by the Exchange. Before the
registration can become effective, the
individual associated person shall
submit the appropriate application for
registration, pass a qualification
examination appropriate to the category
of registration as prescribed by the
Exchange and submit any required
registration and examination fees. A
Member shall not maintain a
registration with the Exchange for any
person (1) who is no longer active in the
Member’s securities business; (2) who is
no longer functioning in the registered
capacity; or (3) where the sole purpose
is to avoid an examination requirement.
A Member shall not make application
for the registration of any person where
there is no intent to employ that person
in the Member’s securities business. A
Member may, however, maintain or
make application for the registration of
an individual who performs legal,
compliance, internal audit, back-office
operations, or similar responsibilities for
the Member, or a person who performs
administrative support functions for
registered personnel, or a person
engaged in the securities business of a
foreign securities affiliate or subsidiary
of the Member.
(2) Persons Exempt from Registration.
The following individual associated
persons of Members are exempt from
the registration requirements set forth in
paragraph (1):
(A) individual associated persons
whose functions are solely and
exclusively clerical or ministerial;
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(B) individual associated persons who
are not actively engaged in the securities
business;
(C) individual associated persons
whose functions are related solely and
exclusively to the Member’s need for
nominal corporate officers or for capital
participation;
(D) individual associated persons
whose functions are related solely and
exclusively to:
(i) transactions in commodities;
(ii) transactions in security futures;
and/or
(iii) effecting transactions on the floor
of another national securities exchange
and who are registered as floor members
with such exchange.
(b) Financial/Operations Principal.
Each Member subject to Exchange Act
Rule 15c3–1 shall designate a Financial/
Operations Principal. The duties of a
Financial/Operations Principal shall
include taking appropriate actions to
assure that the Member complies with
applicable financial and operational
requirements under the Rules and the
Exchange Act, including but not limited
to those requirements relating to the
submission of financial reports and the
maintenance of books and records. Each
Financial/Operations Principal is
required to have successfully completed
the Financial and Operations Principal
Examination (Series 27 Exam). Each
Financial/Operations Principal
designated by a Trading Member shall
be registered in that capacity with the
Exchange as prescribed by the
Exchange. A Financial/Operations
Principal of a Member may be a fulltime employee, a part-time employee or
independent contractor of the Member.
(c) Chief Compliance Officer. Each
Member shall designate a Chief
Compliance Officer on Schedule A of
Form BD. An individual designated as
a Chief Compliance Officer is required
to register with the Exchange and pass
the appropriate heightened qualification
examination(s) as prescribed by the
Exchange. A person who has been
designated as a Chief Compliance
Officer on Schedule A of Form BD for
at least two years immediately prior to
January 1, 2002, and who has not been
subject within the last ten years to any
statutory disqualification as defined in
Section 3(a)(39) of the Act; a
suspension; or the imposition of a fine
of $5,000 or more for a violation of any
provision of any securities law or
regulation, or any agreement with, rule
or standard of conduct of any securities
governmental agency, securities selfregulatory organization, or as imposed
by any such regulatory or self-regulatory
organization in connection with a
disciplinary proceeding shall be
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required to register in the category of
registration appropriate to the function
to be performed as prescribed by the
Exchange, but shall be exempt from the
requirement to pass the heightened
qualification examination as prescribed
by the Exchange.
(d) Registration Required Under
Chapter 6. Individual associated
persons of a Member that conduct a
public customer business must also
comply with the registration
requirements set forth in Rule 601 and
Rule 602. These additional registration
categories include: (i) Registered
Options Principal; and (ii) Registered
Representative.
(e) Requirement for Examination on
Lapse of Registration. Any person whose
registration has been revoked by the
Exchange as a disciplinary sanction or
whose most recent registration has been
terminated for two or more years
immediately preceding the date of
receipt by the Exchange of a new
application shall be required to pass a
qualification examination appropriate
to the category of registration as
prescribed by the Exchange.
Supplementary Material to Rule 313
.01 Each individual required to
register under this Rule shall
electronically file a Uniform
Application for Securities Industry
Registration (‘‘Form U4’’) through the
Central Registration Depository system
(‘‘Web CRD’’) operated by the Financial
Industry Regulatory Authority,
Incorporated (‘‘FINRA’’).
.02 Each individual required to
register under this Rule shall
electronically submit to Web CRD any
required amendments to Form U4.
.03 Any Member that discharges or
terminates the employment or retention
of an individual required to register
under this Rule shall comply with the
termination filing requirements set forth
in Rule 601(c) and Rule 603, which
include the filing of a Form U5.
.04 Each individual required to
register under this Rule is required to
satisfy the continuing education
requirements set forth in Rule 604 or
any other applicable continuing
education requirements as prescribed by
the Exchange.
.05 The Exchange may, in
exceptional cases and where good cause
is show, waive the applicable
qualification examination and accept
other standards as evidence of an
applicant’s qualifications for
registration. Advanced age or physical
infirmity will not individually of
themselves constitute sufficient grounds
to waive a qualification examination.
Experience in fields ancillary to the
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securities business may constitute
sufficient grounds to waive a
qualification examination.
.06 For purposes of paragraph (a)(1)
above, the Exchange shall consider an
individual associated person to be
engaged in the securities business of a
Member if:
(a) the individual associated person
engages in one or more of the following
activities on behalf of the Member:
(1) proprietary trading;
(2) market-making;
(3) effecting transactions on behalf of
a broker-dealer;
(4) supervision or monitoring of
proprietary trading, market-making, or
brokerage activities;
(5) supervision or training of those
engaged in proprietary trading, marketmaking, or brokerage activities with
respect to those activities; or
(b) the individual associated person
engages in the management of one or
more of the activities enumerated in
subparagraphs (1) through (5) above as
an officer, partner or a director.
.07 Each Member must register with
the Exchange each individual acting in
any of the following capacities: (i)
officer; (ii) partner; (iii) director; (iv)
supervisor of proprietary trading,
market-making or brokerage activities;
and/or (v) supervisor of those engaged
in proprietary trading, market-making
or brokerage activities with respect to
those activities. Each Member must
register with the Exchange at least two
individuals acting in one or more of the
capacities described in (i)–(v) above.
The Exchange may waive this
requirement if a Member demonstrates
conclusively that only one individual
acting in one or more of the capacities
described in (i) through (v) above should
be required to register. A Member that
conducts proprietary trading only and
has 25 or fewer registered persons shall
only be required to have one officer or
partner who is registered in this
capacity.
For purposes of this Supplementary
Material .07 to Rule 313, a Member shall
be considered to conduct only
proprietary trading if the Member has
the following characteristics:
(a) The Member is not required by
Section 15(b)(8) of the Exchange Act to
become a FINRA member but is a
member of another registered securities
exchange not registered solely under
Section 6(g) of the Exchange Act;
(b) All funds used or proposed to be
used by the Member are the Trading
Member’s own capital, traded through
the Member’s own accounts;
(c) The Member does not, and will
not, have customers; and
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(d) All persons registered on behalf of
the Member acting or to be acting in the
capacity of a trader must be owners of,
employees of, or contractors to the
Member.
Rule 601. Registration of Options
Principals
(a) No change.
(b) In connection with their
registration, Options Principals shall
electronically file a Uniform
Application for Securities Industry
Registration or Transfer (‘‘Form U4’’)
[with] through the Central Registration
Depository system (‘‘Web CRD’’)
[System] operated by the Financial
Industry Regulatory Authority,
Incorporated (‘‘FINRA’’), shall
successfully complete an examination
prescribed by the Exchange for the
purpose of demonstrating an adequate
knowledge of the options business and
of the Rules of the Exchange, and shall
further agree in the U4 filing to abide by
the Constitution and Rules of the
Exchange and the Rules of the Options
Clearing Corporation. Any person
required to complete Form U4 shall
promptly electronically file any
required amendments to Form U4 [with
the] through Web CRD.
(c) Termination of employment or
affiliation of any Options Principal in
such capacity shall be promptly
electronically reported [to the] through
Web CRD together with a brief statement
of the reason for such termination on
[Form U5] a Uniform Termination
Notice for Securities Industry
Registration (‘‘Form U5’’).
(d) and (e) no change.
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Rule 602. Registration of
Representatives
(a) and (b) no change
(c) In connection with their
registration, Representatives shall
electronically file a [Uniform
Application for Securities Industry
Registration or Transfer (Form U4) with
the NASD’s] Form U4 through Web CRD
[System] by appropriately checking the
ISE as a requested registration on the
electronic U4 filing, and shall
successfully complete an examination
for the purpose of demonstrating an
adequate knowledge of the securities
business, and shall further agree in the
U4 filing to abide by the Constitution
and Rules of the Exchange and the Rules
of the Clearing Corporation. Any person
required to complete Form U4 shall
promptly electronically file any
required amendments to Form U4 [with
the NASD’s] through Web CRD
[System].
(d) no change.
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Rule 603. Termination of Registered
Persons
(a) The discharge or termination of
employment of any registered person,
together with the reasons therefore,
shall be electronically reported [to the
NASD’s] through Web CRD [System], by
a Member immediately following the
date of termination, but in no event later
than thirty (30) days following
termination on Form U5 [a Uniform
Termination Notice for Securities
Industry Registration (Form U–5)]. A
copy of said termination notice shall be
provided concurrently to the person
whose association has been terminated.
(b) The Member shall electronically
report [to the NASD’s] through Web
CRD [System], by means of an
amendment to the Form [U–5] U5 filed
pursuant to paragraph (a) above, in the
event that the Member learns of facts or
circumstances causing any information
set forth in the notice to become
inaccurate or incomplete. Such
amendment shall be provided
concurrently to the person whose
association has been terminated no later
than thirty (30) days after the Member
learns of the facts or circumstances
giving rise to the amendment.
Rule 604. Continuing Education for
Registered Persons
(a) no change.
(b) In-house Delivery of Regulatory
Element: Members will be permitted to
administer the Regulatory Element of
the Continuing Education program to
their registered persons by instituting a
firm program acceptable to the
Exchange. The following procedures are
required:
(1) Senior Officer or Partner in
Charge. The Member has designated a
senior officer or partner to be
responsible for the firm’s delivery of the
Regulatory Element of the Continuing
Education program.
(2) Site Requirements. The location of
all delivery sites will be under the
control of the Member. Delivery of
Regulatory Element continuing
education will take place in an
environment conducive to training (i.e.,
a training facility, conference room or
other area dedicated to this type of
purpose would be appropriate.
Inappropriate locations would include a
personal office or any location that is
not or cannot be secured from traffic
and interruptions). Where multiple
delivery terminals are placed in a room,
adequate separation between terminals
will be maintained.
(3) Technology Requirements. The
communication links and firm delivery
computer hardware must comply with
standards defined by the Exchange or
its designated vendor.
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(4) Supervision. The Member’s written
supervisory procedures must contain
the procedures implemented to comply
with the requirements of its delivery of
Regulatory Element continuing
education. The Member’s written
supervisory procedures must identify
the senior officer or partner designated
pursuant to paragraph (b)(1) above and
contain a list of individuals authorized
by the Member to serve as a proctor.
Member locations for delivery of
Regulatory Element continuing
education will be specifically listed in
the Member’s written supervisory
procedures.
(5) Proctors. All sessions will be
proctored by an authorized person
during the entire Regulatory Element
continuing education session. Proctors
must be present in the session room or
must be able to view the person(s) sitting
for Regulatory Element continuing
education through a window or by video
monitor. The individual responsible for
proctoring at each administration will
sign a certification that required
procedures have been followed, that no
material from Regulatory Element
continuing education has been
reproduced, and that no candidate
received any assistance to complete the
session. Such certification may be a part
of the sign-in log required under
paragraph (b)(6) below. Individuals
serving as proctors must be individuals
registered with the Exchange as
‘‘proctors’’ and supervised by the
designated senior officer/partner for
purposes of Member delivery of
Regulatory Element continuing
education. Proctors will check and
verify the identification of all
individuals taking Regulatory Element
continuing education.
(6) Administration. All appointments
will be scheduled in advance using the
procedures and software specified by
the Exchange, its agent or designated
vendor to communicate with the Proctor
system and the NASD’s CRD System.
The Member/proctor will conduct each
session in accordance with the
administrative and appointment
scheduling procedures required by the
Exchange or its designated vendor.
A sign-in log will be maintained at the
delivery facility. Logs will contain the
date of each session, the name and
social security number of the individual
taking the session, that required
identification was checked, the sign-in
time, the sign-out time, and the name of
the individual proctoring the session.
Such logs are required to be retained
pursuant to Securities Exchange Act of
1934 Rules 17a–3 and 17a–4. No
material will be permitted to be utilized
for the session nor may any session-
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related material be removed. Delivery
sites will be made available for
inspection by the SROs. Before
commencing in-firm delivery of the
Regulatory Element continuing
education, Members are required to file
with their Designated Examining
Authority (‘‘DEA’’), a letter of attestation
(as specified below) signed by a senior
officer or partner, attesting to the
establishment of required procedures
addressing senior officer or partner incharge, supervision, site, technology,
proctors, and administrative
requirements.
Letter of Attestation for In-Firm
Delivery of Regulatory Element
Continuing Education [Name of senior
officer or partner] has established
procedures for delivering Regulatory
Element continuing education on its
premises. I have determined that these
procedures are reasonably designed to
comply with SRO requirements
pertaining to in-firm delivery of
Regulatory Element continuing
education, including that such
procedures have been implemented to
comply with senior officer or partner incharge, supervision, site, technology,
proctors, and administrative
requirements.
llllllllllllllllll
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Signature
llllllllllllllllll
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Printed name
llllllllllllllllll
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Title [Must be signed by a Principal
Executive Officer (or Executive
Representative) of the firm]
llllllllllllllllll
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Date
(7) Annual Representation. Each
Member will be required to represent to
the Exchange, annually, that they have
continued to maintain, and reasonably
believe that they have complied with, all
required procedures outlined in
paragraphs (b)(1)-(b)(6) above for the
previous year. Such attestation must be
signed by a senior officer or partner.
(8) Definition of Senior Officer/
Partner. For purposes of paragraph (b)
of this rule, ‘‘senior officer or partner’’
means the chief executive officer or
managing partner or either (A) any other
officer or partner who is a member of
the Member’s executive or management
committee or its equivalent committee
or group or (B) if the Member has no
such committee or group, any officer or
partner having senior executive or
management responsibility who reports
directly to the chief executive officer or
managing partner. If the chief executive
officer or managing partner does not
sign the attestation, a copy of the
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attestation shall be provided to the chief
executive officer or managing partner.
[(b)] (c) Firm Element
(1) through (3) no change.
Supplementary Material to Rule 604
.01 For purposes of this Rule, the
term ‘‘registered person’’ means any
Member, Representative or other person
registered or required to be registered
under the Rules[, but does not include
any such person whose activities are
limited solely to the transaction of
business on the Exchange with Members
or registered broker-dealers].
.02 through .04 no 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
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 these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization 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
ISE is proposing to amend its rules
regarding qualification, registration and
continuing education of individual
associated persons.3 Specifically, in
response to a request by the Division of
Trading and Markets of the U.S.
Securities and Exchange Commission
and in light of recent market events, the
Exchange is proposing to expand its
registration and qualification
requirements to include additional
types of individual associated persons.
The Exchange believes the proposed
rule changes are consistent with Rule
15b7–1,4 promulgated under the
3 Under ISE Rule 100(a)(3), the term ‘‘associated
person’’ or ‘‘person associated with a Member’’
means any partner, officer, director or branch
manager of Member (or any person occupying a
similar status or performing similar functions), any
person directly or indirectly controlling, controlled
by, or under common control with a Member or any
employee of a Member. This filing refers
specifically to the classification of ‘‘individual
associated persons’’ as an organization could fall
within the scope of this definition, and it is not
ISE’s intention to require registration by an
organization.
4 17 CFR 240.15b7–1.
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Securities Exchange Act of 1934, as
amended (‘‘Exchange Act’’),5 which
provides: ‘‘No registered broker or dealer
shall effect any transaction in* * *any
security unless any natural person
associated with such broker or dealer
who effects or is involved in effecting
such transaction is registered or
approved in accordance with the
standards of training, experience,
competence, and other qualification
standards* * *established by the rules
of any national securities exchange
* * *’’.
Proposed Rule 313 establishes the
qualification and registration
requirements for associated persons of
Members. This proposed rule also
establishes registration requirements for
a Chief Compliance Officer for each
Member and for a Financial/Operations
Principal for each Member subject to the
Exchange Act Rule 15c3–1.6 Proposed
Rule 313 also references the registration
requirements set forth in Chapter 6 of
the Exchange’s Rulebook for associated
persons of Members that conduct a
public customer business.7
Under the proposal, individual
associated persons acting in the capacity
of a sole proprietor, officer, partner,
director or Chief Compliance Officer
will be subject to heightened
qualification requirements. In addition,
an individual associated person that is
engaged in the supervision or
monitoring of proprietary trading,
market-making or brokerage activities
and/or that is engaged in the
supervision or training of those engaged
in proprietary trading, market-making or
brokerage activities with respect to
those activities will be subject to
heightened qualification requirements.
The Exchange believes that the
heightened qualification requirements
should enhance the supervisory
structure for Members that do not
conduct a public customer business.8
Specifically, the Exchange is
proposing to require additional
associated persons to submit the
appropriate application for registration
online through the Central Registration
5 15
U.S.C. 78a et seq.
CFR 240.15c3–1.
7 These proposed rule changes are consistent with
those recently adopted by the Chicago Board of
Options Exchange. Securities Exchange Act Release
No. 62977 (Sept. 22, 2010), 75 FR 59773 (Sept. 28,
2010) (‘‘CBOE Registration Proposal’’); Securities
Exchange Act Release No. 63314 (November 12,
2010), 75 FR 70957 (November 19, 2010) (‘‘CBOE
Approval Order’’).
8 Proposed Rule 313 specifies that individual
associated persons, including Registered Options
Principals and Registered Representatives, are also
subject to the registration requirements set forth in
Chapter 6 of ISE’s Rules, which is generally
applicable to Members that conduct a public
customer business.
6 17
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Depository system (‘‘Web CRD’’), which
is operated by the Financial Industry
Regulatory Authority, Incorporated
(‘‘FINRA’’), successfully complete any
qualification examination(s) as
prescribed by the Exchange and submit
any required registration and
examination fees.9 Proposed Rule 313
will require registration and
qualification by individual associated
persons engaged or to be engaged in the
securities business of a Member.10 An
individual associated person will be
considered to be a person engaged in the
securities business of a Member if (i) the
individual associated person conducts
proprietary trading, acts as a marketmaker, effects transactions on behalf of
a broker-dealer account, supervises or
monitors proprietary trading, marketmaking or brokerage activities on behalf
of the broker-dealer, supervises or
conducts training for those engaged in
proprietary trading, market-making or
brokerage activities on behalf of a
broker-dealer account; or (ii) the
individual associated person engages in
the management of any individual
associated person identified in (i) above
as an officer, partner or director.11
ISE will require all associated persons
required to register under proposed Rule
313 that are not already registered in
Web CRD to register (i.e., complete a
Form U4) within 60 days of the
approval date of this filing by the U.S.
Securities and Exchange Commission.12
With respect to the examination
requirement associated with the
proposed rule,13 ISE is working with
other self-regulatory organizations
(‘‘SROs’’) to develop an additional
examination for associated persons who
previously may not have been required
to register under applicable SRO rules
(e.g., proprietary options traders) that
may be used as an alternative to the
9 Under the proposal, each individual associated
person subject to the registration requirements in
Rule 313 will be required to electronically file a
Uniform Application for Securities Industry
Registration (‘‘Form U4’’) through Web CRD.
10 An individual with an indirect ownership
interest in a Member that is engaged in the
securities business of such Member is required to
register under proposed Rule 313.
11 This requirement is consistent with FINRA’s
registration requirement for ‘‘Principals’’ (as defined
in NASD Rule 1021). ISE is declining to adopt the
term ‘‘Principal’’ in the Exchange proposed rule
change to avoid confusion with existing terms, such
as ‘‘Option Principal.’’
12 Web CRD has been enhanced by FINRA to
allow for general registration of applicable
associated persons.
13 The availability of the appropriate category on
Web CRD for any new qualification examinations
recognized by the Exchange may be subject to the
timing for any required systems development on
Web CRD.
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Jkt 223001
existing categories of registration.14 The
Exchange will notify its Members via
regulatory circular what qualification
examination(s) will be acceptable for
compliance with the requirements
proposed in Rule 313.
The Exchange is proposing to identify
in Rule 313 several categories of persons
that are exempt from these additional
registration requirements. The
categories of individual associated
persons that are exempt from the
registration requirements include (i)
Individual associated persons
functioning solely and exclusively in a
clerical or ministerial capacity; (ii)
individual associated persons that are
not actively engaged in the securities
business, (iii) individual associated
persons functioning solely and
exclusively to meet a need for nominal
corporate officers or for capital
participation; and (iv) individual
associated persons whose functions are
solely and exclusively related to
transactions in commodities,
transactions in security futures and/or
effecting transactions on the floor of
another national securities exchange
and who are registered as floor members
with such exchange. The Exchange
believes these registration exemptions
are appropriate because ISE would not
consider individuals that fall into the
exemptions to be actively engaged in
securities business unless they are
registered as floor members on another
national securities exchange, in which
case, they are already registered as floor
members and not required to register at
ISE. ISE believes incorporating these
exemptions into the rule provides
additional clarity to individual
associated persons as to who will or will
not be required to register under the
proposed rule. Any applicable FINRA
14 ISE intends to develop with other SROs, within
six months of the approval date of this filing, an
alternative qualification examination(s) that is
appropriate for the additional individual associated
persons required to register under the proposed
rule. Once the development of this examination(s)
has been completed, the implementation and
effective date will be subject to approval by the
Commission and any necessary systems
development schedules to implement the
examination. If an alternative examination(s) is not
completed within six months of the approval date
of this filing, the Exchange will establish a deadline
for qualification based on the existing categories of
registration and qualification examinations
available on Web CRD, until such time as the
development and implementation of an alternative
examination(s) has been completed. The referenced
categories of registration available on Web CRD
include, but may not be limited to, the General
Securities Representative (GS) and General
Securities Principal (GP), as applicable to the type
of business activities conducted. The accompanying
qualification examination for the General Securities
Representative is the Series 7 and the
accompanying qualification examination for the
General Securities Principal is the Series 24.
PO 00000
Frm 00062
Fmt 4703
Sfmt 4703
80095
registration requirements would
continue to apply to Members that are
also members of FINRA.
Additionally, under the proposal, the
Exchange may waive the qualification
examination requirement where good
cause is shown. Similar rules are in
place at the New York Stock Exchange,
Inc. (‘‘NYSE’’) and FINRA.15 In
determining whether a waiver shall be
granted, the Exchange shall consider,
among other things, previous industry
employment, training and/or the
successful completion of similar
qualification examinations of other selfregulatory organizations. Under the
proposed Rule, individual associated
persons whose activities are limited
solely to the transaction of business on
the floor of another exchange will be
subject to the continuing education
requirements set forth in Rule 604 or
any other continuing education
requirements as prescribed by the
Exchange.
The Exchange also is proposing to
require the designation of a Financial/
Operations Principal by each member
that is subject to Exchange Act Rule
15c3–1, and the designation of a Chief
Compliance Officer by each Member.
Under the proposed rule, the Financial/
Operations Principal and Chief
Compliance Officer are required to
register and pass the appropriate
qualification examination.16 The
registration requirements for a
Financial/Operations Principal are
consistent with CBOE Rule 3.6A,17 and
the requirements for a Chief Compliance
Officer are consistent with proposed
amendments to CBOE Rule 3.6A (which
in turn are consistent with FINRA Rule
3130 and NASD Rule 1022).18 The
proposal includes a limited exemption
from the requirement to pass the
appropriate qualification examination
by a Chief Compliance Officer.
Specifically, a person that has been
15 See NASD Rule 1070 (Qualification
Examinations and Waiver of Requirements) and
NYSE Rule 345 (Employees—Registration,
Approval, Records).
16 The appropriate qualification examination for a
Financial/Operations Principal is the Series 27
exam. The appropriate qualification examination
for a Chief Compliance Officer is the Series 14
exam. ISE is working with FINRA to establish this
category of registration and make the accompanying
qualification examination available at ISE on Web
CRD.
17 The duties of a Financial/Operations Principal
include taking appropriate actions to assure that the
Member complies with applicable financial and
operational requirements under SRO rules and the
Exchange Act. The Exchange notes that it is not the
Designated Examining Authority for any of its
Members, but for consistency with other SRO rules,
the Exchange is proposing to include the
designation of a Financial/Operations Principal in
its Rules.
18 CBOE Registration Proposal, supra note 7.
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designated as a Chief Compliance
Officer on Schedule A of Form BD for
at least two years immediately prior to
January 1, 2002, and who has not been
subject within the last ten years to any
statutory disqualification as defined in
Section 3(a)(39) of the Act; a
suspension; or the imposition of a
$5,000 or more fine for a violation(s) of
any provision of any securities law or
regulation, or any agreement with, rule
or standard of conduct of any securities
governmental agency, securities selfregulatory organization, or as imposed
by any such self-regulatory organization
in connection with a disciplinary
proceeding, shall be required to register
in the category of registration
appropriate to the function to be
performed as prescribed by the
Exchange, but shall be exempt from the
requirement to pass the heightened
qualification examination as prescribed
by the Exchange.
In addition, the Exchange is
proposing to require registration and
successful completion of a heightened
qualification examination by at least
two individuals that are each an officer,
partner or director of each Member.19
However, the Exchange notes that all
individuals who engage in supervisory
functions of the Member’s securities
business shall be required to register
and pass the appropriate heightened
qualification examination(s) relevant to
the particular category of registration.
Members that are sole proprietors are
exempt from this requirement. In
addition, the Exchange may waive the
requirement to have two officers,
partners and/or directors registered if a
Member conclusively demonstrates that
only one officer, partner or director
should be required to register. For
example, a Member could conclusively
demonstrate that only one individual is
required to register if such Member is
owned by one individual (such as a
single member limited liability
company), such individual acts as the
only trader on behalf of the Member,
and the Member employs only one other
individual who functions only in a
clerical capacity. The ability to waive
this registration requirement is
consistent with similar FINRA rules
regarding principal registration.20
ISE is also proposing to allow a
Member that conducts proprietary
trading only and has 25 or fewer
registered persons to have only one
officer or partner registered under this
19 With the exception of its application to sole
proprietors, this requirement is consistent with the
registration requirement set forth in NASD Rule
1021 addressing registration of two Principals (as
defined in NASD Rule 1021).
20 See NASD Rule 1021(e).
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20:40 Dec 20, 2010
Jkt 223001
section rather than two. This exception
is similar to that of several other
exchanges and reflects that such
Members do not necessitate the same
level of supervisory structure as those
Members that have customers or are
larger in size. For purposes of this
requirement, a Member is be [sic]
considered to conduct only proprietary
trading if it has the following
characteristics: (i) The Member is not
required by Section 15(b)(8) of the
Exchange Act to become a FINRA
member but is a member of another
registered securities exchange not
registered solely under Section 6(g) of
the Exchange Act; (ii) all funds used or
proposed to be used by the Member are
the Member’s own capital, traded
through the Member’s own accounts;
(iii) the Member does not, and will not,
have customers; and (iv) all persons
registered on behalf of the Member
acting or to be acting in the capacity of
a trader must be owners of, employees
of, or contractors to the Member. The
description of what constitutes
proprietary trading for purposes of this
requirement is appropriate in that it
provides additional clarity for
associated persons to evaluate whether
two individuals are required to register.
Proposed Rule 313 also sets forth the
requirements for examinations where
there is a lapse in registration.
Specifically, an individual associated
person shall be required to pass the
appropriate qualification examination
for the category of registration if the
individual associated person’s
registration has been revoked by the
Exchange as a disciplinary sanction or
whose most recent registration has been
terminated for a period of two or more
years.
Additionally, the Exchange proposes
to update Rule 604 regarding continuing
education requirements so that it is
consistent with other SRO rules.21
Specifically, the Exchange proposes to
add a provision detailing the procedures
required for in-house delivery of the
regulatory element. The required
procedures address responsibly [sic] for
the education program, site
requirements, technology requirements,
supervision requirements, and
administration of the program. Members
are required to file with their Designated
Examining Authority, a letter of
attestation signed by a senior officer or
partner, attesting to the establishment of
the required procedures, and must
annually represent that they have
continued to maintain all required
procedures for the previous year. While
the Exchange does not have a floor, for
21 E.g.,
PO 00000
CBOE Rule 9.3A.
Frm 00063
Fmt 4703
Sfmt 4703
consistency with other SRO rules, the
Exchange also proposes to delete
language that excludes those people
whose activities are limited solely to the
transaction of business on a floor from
the definition of ‘‘registered person’’ for
purposes of the Rule 604.22
Finally, this filing proposes to make
non-substantive changes to ISE Rule 601
(Registration of Options Principals),
Rule 602 (Registration of
Representatives) and Rule 603
(Termination of Registered Persons) to
define and reference certain terms
consistently within these rules and with
proposed Rule 313. Specifically, these
rules currently contain inconsistent
references to the Central Registration
Depository, and the registration and
termination forms required to be filed
under the rules. Additionally, these
rules contain reference to the National
Association of Securities Dealers or
‘‘NASD’’ which is now known as the
Financial Industry Regulatory Authority
or ‘‘FINRA.’’
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) of the Act,23 in general, and furthers
the objectives of Section 6(b)(5) of the
Act,24 which requires, among other
things, that the Exchange’s rules be
designed to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and protect investors and the
public interest. Specifically, the
enhanced registration and qualification
requirements will provide additional
protection to investors and further
promote the public interest.
In addition, the Exchange believes
that the proposed rule change is
consistent with Section 6(c) of the Act,25
in general, and furthers the objectives of
Section 6(c)(3)(B) of the Act,26 which
provides, among other things, that a
national securities exchange may bar a
natural person from becoming
associated with a member if such
natural person does not meet the
standards of training, experience and
competence as prescribed by the rules of
the national securities exchange. The
Exchange also believes that the
proposed rule change furthers the
objectives of Section 6(c)(3)(C) of the
Act,27 which provides, among other
things, that a national securities
exchange may bar any person from
22 See
CBOE Registration Proposal, supra note 7.
U.S.C. 78f(b).
24 15 U.S.C. 78f(b)(5).
25 15 U.S.C. 78f(c).
26 15 U.S.C. 78f(c)(3)(B).
27 15 U.S.C. 78f(c)(3)(C).
23 15
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Federal Register / Vol. 75, No. 244 / Tuesday, December 21, 2010 / Notices
becoming associated with a member if
such person does not agree to supply
the exchange with such information
with respect to its dealings with the
member as may be specified by the rules
of the exchange and to permit the
examination of its books and records to
verify the accuracy of any information
so supplied.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
This proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) by order approve or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
All submissions should refer to File
Number SR–ISE–2010–115. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (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
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
publicly available. All submissions
should refer to File Number SR–ISE–
2010–115 and should be submitted on
or before January 11, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Florence E. Harmon,
Deputy Secretary.
srobinson on DSKHWCL6B1PROD with NOTICES
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:
[FR Doc. 2010–31951 Filed 12–20–10; 8:45 am]
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–ISE–2010–115 on the
subject line.
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NYSE
Amex LLC Establishing Strike Price
Intervals of $1 and Increasing Position
and Exercise Limits With Respect to
Options on the KBW Bank Index
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
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20:40 Dec 20, 2010
Jkt 223001
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63552; File No. SR–
NYSEAmex–2010–120]
December 15, 2010.
28 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00064
Fmt 4703
Sfmt 4703
80097
notice is hereby given that, on December
14, 2010, NYSE Amex LLC (the
‘‘Exchange’’ or ‘‘NYSE Amex’’) 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 Exchange. 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
NYSE Amex Rules 903C and 904C with
respect to options on the KBW Bank
Index (‘‘BKX’’ or ‘‘Index’’) to (i) establish
strike price intervals of $1.00 and (ii)
increase the position and exercise limits
applicable thereto. The text of the
proposed rule change is available at the
Exchange’s principal office, on the
Commission’s Web site at https://
www.sec.gov, at the Commission’s
Public Reference Room, and https://
www.nyse.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of those
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to amend NYSE Amex Rules
903C and 904C with respect to options
on BKX to (i) establish strike price
intervals of $1.00 and (ii) increase the
position and exercise limits applicable
thereto. The proposed change would
provide investors with greater flexibility
with respect to trading options on BKX,
which the Exchange intends on listing
pursuant to the generic listing standards
of Amex Rule 903C, by allowing them
to establish positions that are better
tailored to meet their investment
objectives.
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]]>Agencies
[Federal Register Volume 75, Number 244 (Tuesday, December 21, 2010)]
[Notices]
[Pages 80091-80097]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31951]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63554; File No. SR-ISE-2010-115]
Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing of Proposed Rule Change Regarding Registration
and Qualification Requirements for Associated Persons
December 15, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 1, 2010, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') filed with the Securities and
Exchange 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The ISE proposes to amend its rules to amend its rules [sic]
regarding the registration of associated persons. The text of the
proposed rule change is provided below (italics indicate additions;
[brackets] indicate deletions):
Rule 313. Registration Requirements
(a) Registration of Individual Associated Persons Engaged in the
Securities Business.
(1) Individual associated persons engaged or to be engaged in the
securities business of a Member shall be registered with the Exchange
in the category of registration appropriate to the function to be
performed as prescribed by the Exchange. Before the registration can
become effective, the individual associated person shall submit the
appropriate application for registration, pass a qualification
examination appropriate to the category of registration as prescribed
by the Exchange and submit any required registration and examination
fees. A Member shall not maintain a registration with the Exchange for
any person (1) who is no longer active in the Member's securities
business; (2) who is no longer functioning in the registered capacity;
or (3) where the sole purpose is to avoid an examination requirement. A
Member shall not make application for the registration of any person
where there is no intent to employ that person in the Member's
securities business. A Member may, however, maintain or make
application for the registration of an individual who performs legal,
compliance, internal audit, back-office operations, or similar
responsibilities for the Member, or a person who performs
administrative support functions for registered personnel, or a person
engaged in the securities business of a foreign securities affiliate or
subsidiary of the Member.
(2) Persons Exempt from Registration. The following individual
associated persons of Members are exempt from the registration
requirements set forth in paragraph (1):
(A) individual associated persons whose functions are solely and
exclusively clerical or ministerial;
[[Page 80092]]
(B) individual associated persons who are not actively engaged in
the securities business;
(C) individual associated persons whose functions are related
solely and exclusively to the Member's need for nominal corporate
officers or for capital participation;
(D) individual associated persons whose functions are related
solely and exclusively to:
(i) transactions in commodities;
(ii) transactions in security futures; and/or
(iii) effecting transactions on the floor of another national
securities exchange and who are registered as floor members with such
exchange.
(b) Financial/Operations Principal. Each Member subject to Exchange
Act Rule 15c3-1 shall designate a Financial/Operations Principal. The
duties of a Financial/Operations Principal shall include taking
appropriate actions to assure that the Member complies with applicable
financial and operational requirements under the Rules and the Exchange
Act, including but not limited to those requirements relating to the
submission of financial reports and the maintenance of books and
records. Each Financial/Operations Principal is required to have
successfully completed the Financial and Operations Principal
Examination (Series 27 Exam). Each Financial/Operations Principal
designated by a Trading Member shall be registered in that capacity
with the Exchange as prescribed by the Exchange. A Financial/Operations
Principal of a Member may be a full-time employee, a part-time employee
or independent contractor of the Member.
(c) Chief Compliance Officer. Each Member shall designate a Chief
Compliance Officer on Schedule A of Form BD. An individual designated
as a Chief Compliance Officer is required to register with the Exchange
and pass the appropriate heightened qualification examination(s) as
prescribed by the Exchange. A person who has been designated as a Chief
Compliance Officer on Schedule A of Form BD for at least two years
immediately prior to January 1, 2002, and who has not been subject
within the last ten years to any statutory disqualification as defined
in Section 3(a)(39) of the Act; a suspension; or the imposition of a
fine of $5,000 or more for a violation of any provision of any
securities law or regulation, or any agreement with, rule or standard
of conduct of any securities governmental agency, securities self-
regulatory organization, or as imposed by any such regulatory or self-
regulatory organization in connection with a disciplinary proceeding
shall be required to register in the category of registration
appropriate to the function to be performed as prescribed by the
Exchange, but shall be exempt from the requirement to pass the
heightened qualification examination as prescribed by the Exchange.
(d) Registration Required Under Chapter 6. Individual associated
persons of a Member that conduct a public customer business must also
comply with the registration requirements set forth in Rule 601 and
Rule 602. These additional registration categories include: (i)
Registered Options Principal; and (ii) Registered Representative.
(e) Requirement for Examination on Lapse of Registration. Any
person whose registration has been revoked by the Exchange as a
disciplinary sanction or whose most recent registration has been
terminated for two or more years immediately preceding the date of
receipt by the Exchange of a new application shall be required to pass
a qualification examination appropriate to the category of registration
as prescribed by the Exchange.
Supplementary Material to Rule 313
.01 Each individual required to register under this Rule shall
electronically file a Uniform Application for Securities Industry
Registration (``Form U4'') through the Central Registration Depository
system (``Web CRD'') operated by the Financial Industry Regulatory
Authority, Incorporated (``FINRA'').
.02 Each individual required to register under this Rule shall
electronically submit to Web CRD any required amendments to Form U4.
.03 Any Member that discharges or terminates the employment or
retention of an individual required to register under this Rule shall
comply with the termination filing requirements set forth in Rule
601(c) and Rule 603, which include the filing of a Form U5.
.04 Each individual required to register under this Rule is
required to satisfy the continuing education requirements set forth in
Rule 604 or any other applicable continuing education requirements as
prescribed by the Exchange.
.05 The Exchange may, in exceptional cases and where good cause is
show, waive the applicable qualification examination and accept other
standards as evidence of an applicant's qualifications for
registration. Advanced age or physical infirmity will not individually
of themselves constitute sufficient grounds to waive a qualification
examination. Experience in fields ancillary to the securities business
may constitute sufficient grounds to waive a qualification examination.
.06 For purposes of paragraph (a)(1) above, the Exchange shall
consider an individual associated person to be engaged in the
securities business of a Member if:
(a) the individual associated person engages in one or more of the
following activities on behalf of the Member:
(1) proprietary trading;
(2) market-making;
(3) effecting transactions on behalf of a broker-dealer;
(4) supervision or monitoring of proprietary trading, market-
making, or brokerage activities;
(5) supervision or training of those engaged in proprietary
trading, market-making, or brokerage activities with respect to those
activities; or
(b) the individual associated person engages in the management of
one or more of the activities enumerated in subparagraphs (1) through
(5) above as an officer, partner or a director.
.07 Each Member must register with the Exchange each individual
acting in any of the following capacities: (i) officer; (ii) partner;
(iii) director; (iv) supervisor of proprietary trading, market-making
or brokerage activities; and/or (v) supervisor of those engaged in
proprietary trading, market-making or brokerage activities with respect
to those activities. Each Member must register with the Exchange at
least two individuals acting in one or more of the capacities described
in (i)-(v) above. The Exchange may waive this requirement if a Member
demonstrates conclusively that only one individual acting in one or
more of the capacities described in (i) through (v) above should be
required to register. A Member that conducts proprietary trading only
and has 25 or fewer registered persons shall only be required to have
one officer or partner who is registered in this capacity.
For purposes of this Supplementary Material .07 to Rule 313, a
Member shall be considered to conduct only proprietary trading if the
Member has the following characteristics:
(a) The Member is not required by Section 15(b)(8) of the Exchange
Act to become a FINRA member but is a member of another registered
securities exchange not registered solely under Section 6(g) of the
Exchange Act;
(b) All funds used or proposed to be used by the Member are the
Trading Member's own capital, traded through the Member's own accounts;
(c) The Member does not, and will not, have customers; and
[[Page 80093]]
(d) All persons registered on behalf of the Member acting or to be
acting in the capacity of a trader must be owners of, employees of, or
contractors to the Member.
Rule 601. Registration of Options Principals
(a) No change.
(b) In connection with their registration, Options Principals shall
electronically file a Uniform Application for Securities Industry
Registration or Transfer (``Form U4'') [with] through the Central
Registration Depository system (``Web CRD'') [System] operated by the
Financial Industry Regulatory Authority, Incorporated (``FINRA''),
shall successfully complete an examination prescribed by the Exchange
for the purpose of demonstrating an adequate knowledge of the options
business and of the Rules of the Exchange, and shall further agree in
the U4 filing to abide by the Constitution and Rules of the Exchange
and the Rules of the Options Clearing Corporation. Any person required
to complete Form U4 shall promptly electronically file any required
amendments to Form U4 [with the] through Web CRD.
(c) Termination of employment or affiliation of any Options
Principal in such capacity shall be promptly electronically reported
[to the] through Web CRD together with a brief statement of the reason
for such termination on [Form U5] a Uniform Termination Notice for
Securities Industry Registration (``Form U5'').
(d) and (e) no change.
Rule 602. Registration of Representatives
(a) and (b) no change
(c) In connection with their registration, Representatives shall
electronically file a [Uniform Application for Securities Industry
Registration or Transfer (Form U4) with the NASD's] Form U4 through Web
CRD [System] by appropriately checking the ISE as a requested
registration on the electronic U4 filing, and shall successfully
complete an examination for the purpose of demonstrating an adequate
knowledge of the securities business, and shall further agree in the U4
filing to abide by the Constitution and Rules of the Exchange and the
Rules of the Clearing Corporation. Any person required to complete Form
U4 shall promptly electronically file any required amendments to Form
U4 [with the NASD's] through Web CRD [System].
(d) no change.
Rule 603. Termination of Registered Persons
(a) The discharge or termination of employment of any registered
person, together with the reasons therefore, shall be electronically
reported [to the NASD's] through Web CRD [System], by a Member
immediately following the date of termination, but in no event later
than thirty (30) days following termination on Form U5 [a Uniform
Termination Notice for Securities Industry Registration (Form U-5)]. A
copy of said termination notice shall be provided concurrently to the
person whose association has been terminated.
(b) The Member shall electronically report [to the NASD's] through
Web CRD [System], by means of an amendment to the Form [U-5] U5 filed
pursuant to paragraph (a) above, in the event that the Member learns of
facts or circumstances causing any information set forth in the notice
to become inaccurate or incomplete. Such amendment shall be provided
concurrently to the person whose association has been terminated no
later than thirty (30) days after the Member learns of the facts or
circumstances giving rise to the amendment.
Rule 604. Continuing Education for Registered Persons
(a) no change.
(b) In-house Delivery of Regulatory Element: Members will be
permitted to administer the Regulatory Element of the Continuing
Education program to their registered persons by instituting a firm
program acceptable to the Exchange. The following procedures are
required:
(1) Senior Officer or Partner in Charge. The Member has designated
a senior officer or partner to be responsible for the firm's delivery
of the Regulatory Element of the Continuing Education program.
(2) Site Requirements. The location of all delivery sites will be
under the control of the Member. Delivery of Regulatory Element
continuing education will take place in an environment conducive to
training (i.e., a training facility, conference room or other area
dedicated to this type of purpose would be appropriate. Inappropriate
locations would include a personal office or any location that is not
or cannot be secured from traffic and interruptions). Where multiple
delivery terminals are placed in a room, adequate separation between
terminals will be maintained.
(3) Technology Requirements. The communication links and firm
delivery computer hardware must comply with standards defined by the
Exchange or its designated vendor.
(4) Supervision. The Member's written supervisory procedures must
contain the procedures implemented to comply with the requirements of
its delivery of Regulatory Element continuing education. The Member's
written supervisory procedures must identify the senior officer or
partner designated pursuant to paragraph (b)(1) above and contain a
list of individuals authorized by the Member to serve as a proctor.
Member locations for delivery of Regulatory Element continuing
education will be specifically listed in the Member's written
supervisory procedures.
(5) Proctors. All sessions will be proctored by an authorized
person during the entire Regulatory Element continuing education
session. Proctors must be present in the session room or must be able
to view the person(s) sitting for Regulatory Element continuing
education through a window or by video monitor. The individual
responsible for proctoring at each administration will sign a
certification that required procedures have been followed, that no
material from Regulatory Element continuing education has been
reproduced, and that no candidate received any assistance to complete
the session. Such certification may be a part of the sign-in log
required under paragraph (b)(6) below. Individuals serving as proctors
must be individuals registered with the Exchange as ``proctors'' and
supervised by the designated senior officer/partner for purposes of
Member delivery of Regulatory Element continuing education. Proctors
will check and verify the identification of all individuals taking
Regulatory Element continuing education.
(6) Administration. All appointments will be scheduled in advance
using the procedures and software specified by the Exchange, its agent
or designated vendor to communicate with the Proctor system and the
NASD's CRD System. The Member/proctor will conduct each session in
accordance with the administrative and appointment scheduling
procedures required by the Exchange or its designated vendor.
A sign-in log will be maintained at the delivery facility. Logs
will contain the date of each session, the name and social security
number of the individual taking the session, that required
identification was checked, the sign-in time, the sign-out time, and
the name of the individual proctoring the session. Such logs are
required to be retained pursuant to Securities Exchange Act of 1934
Rules 17a-3 and 17a-4. No material will be permitted to be utilized for
the session nor may any session-
[[Page 80094]]
related material be removed. Delivery sites will be made available for
inspection by the SROs. Before commencing in-firm delivery of the
Regulatory Element continuing education, Members are required to file
with their Designated Examining Authority (``DEA''), a letter of
attestation (as specified below) signed by a senior officer or partner,
attesting to the establishment of required procedures addressing senior
officer or partner in-charge, supervision, site, technology, proctors,
and administrative requirements.
Letter of Attestation for In-Firm Delivery of Regulatory Element
Continuing Education [Name of senior officer or partner] has
established procedures for delivering Regulatory Element continuing
education on its premises. I have determined that these procedures are
reasonably designed to comply with SRO requirements pertaining to in-
firm delivery of Regulatory Element continuing education, including
that such procedures have been implemented to comply with senior
officer or partner in-charge, supervision, site, technology, proctors,
and administrative requirements.
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Signature
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Printed name
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Title [Must be signed by a Principal Executive Officer (or Executive
Representative) of the firm]
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Date
(7) Annual Representation. Each Member will be required to
represent to the Exchange, annually, that they have continued to
maintain, and reasonably believe that they have complied with, all
required procedures outlined in paragraphs (b)(1)-(b)(6) above for the
previous year. Such attestation must be signed by a senior officer or
partner.
(8) Definition of Senior Officer/Partner. For purposes of paragraph
(b) of this rule, ``senior officer or partner'' means the chief
executive officer or managing partner or either (A) any other officer
or partner who is a member of the Member's executive or management
committee or its equivalent committee or group or (B) if the Member has
no such committee or group, any officer or partner having senior
executive or management responsibility who reports directly to the
chief executive officer or managing partner. If the chief executive
officer or managing partner does not sign the attestation, a copy of
the attestation shall be provided to the chief executive officer or
managing partner.
[(b)] (c) Firm Element
(1) through (3) no change.
Supplementary Material to Rule 604
.01 For purposes of this Rule, the term ``registered person'' means
any Member, Representative or other person registered or required to be
registered under the Rules[, but does not include any such person whose
activities are limited solely to the transaction of business on the
Exchange with Members or registered broker-dealers].
.02 through .04 no 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 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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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
ISE is proposing to amend its rules regarding qualification,
registration and continuing education of individual associated
persons.\3\ Specifically, in response to a request by the Division of
Trading and Markets of the U.S. Securities and Exchange Commission and
in light of recent market events, the Exchange is proposing to expand
its registration and qualification requirements to include additional
types of individual associated persons. The Exchange believes the
proposed rule changes are consistent with Rule 15b7-1,\4\ promulgated
under the Securities Exchange Act of 1934, as amended (``Exchange
Act''),\5\ which provides: ``No registered broker or dealer shall
effect any transaction in* * *any security unless any natural person
associated with such broker or dealer who effects or is involved in
effecting such transaction is registered or approved in accordance with
the standards of training, experience, competence, and other
qualification standards* * *established by the rules of any national
securities exchange * * *''.
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\3\ Under ISE Rule 100(a)(3), the term ``associated person'' or
``person associated with a Member'' means any partner, officer,
director or branch manager of Member (or any person occupying a
similar status or performing similar functions), any person directly
or indirectly controlling, controlled by, or under common control
with a Member or any employee of a Member. This filing refers
specifically to the classification of ``individual associated
persons'' as an organization could fall within the scope of this
definition, and it is not ISE's intention to require registration by
an organization.
\4\ 17 CFR 240.15b7-1.
\5\ 15 U.S.C. 78a et seq.
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Proposed Rule 313 establishes the qualification and registration
requirements for associated persons of Members. This proposed rule also
establishes registration requirements for a Chief Compliance Officer
for each Member and for a Financial/Operations Principal for each
Member subject to the Exchange Act Rule 15c3-1.\6\ Proposed Rule 313
also references the registration requirements set forth in Chapter 6 of
the Exchange's Rulebook for associated persons of Members that conduct
a public customer business.\7\
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\6\ 17 CFR 240.15c3-1.
\7\ These proposed rule changes are consistent with those
recently adopted by the Chicago Board of Options Exchange.
Securities Exchange Act Release No. 62977 (Sept. 22, 2010), 75 FR
59773 (Sept. 28, 2010) (``CBOE Registration Proposal''); Securities
Exchange Act Release No. 63314 (November 12, 2010), 75 FR 70957
(November 19, 2010) (``CBOE Approval Order'').
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Under the proposal, individual associated persons acting in the
capacity of a sole proprietor, officer, partner, director or Chief
Compliance Officer will be subject to heightened qualification
requirements. In addition, an individual associated person that is
engaged in the supervision or monitoring of proprietary trading,
market-making or brokerage activities and/or that is engaged in the
supervision or training of those engaged in proprietary trading,
market-making or brokerage activities with respect to those activities
will be subject to heightened qualification requirements. The Exchange
believes that the heightened qualification requirements should enhance
the supervisory structure for Members that do not conduct a public
customer business.\8\
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\8\ Proposed Rule 313 specifies that individual associated
persons, including Registered Options Principals and Registered
Representatives, are also subject to the registration requirements
set forth in Chapter 6 of ISE's Rules, which is generally applicable
to Members that conduct a public customer business.
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Specifically, the Exchange is proposing to require additional
associated persons to submit the appropriate application for
registration online through the Central Registration
[[Page 80095]]
Depository system (``Web CRD''), which is operated by the Financial
Industry Regulatory Authority, Incorporated (``FINRA''), successfully
complete any qualification examination(s) as prescribed by the Exchange
and submit any required registration and examination fees.\9\ Proposed
Rule 313 will require registration and qualification by individual
associated persons engaged or to be engaged in the securities business
of a Member.\10\ An individual associated person will be considered to
be a person engaged in the securities business of a Member if (i) the
individual associated person conducts proprietary trading, acts as a
market-maker, effects transactions on behalf of a broker-dealer
account, supervises or monitors proprietary trading, market-making or
brokerage activities on behalf of the broker-dealer, supervises or
conducts training for those engaged in proprietary trading, market-
making or brokerage activities on behalf of a broker-dealer account; or
(ii) the individual associated person engages in the management of any
individual associated person identified in (i) above as an officer,
partner or director.\11\
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\9\ Under the proposal, each individual associated person
subject to the registration requirements in Rule 313 will be
required to electronically file a Uniform Application for Securities
Industry Registration (``Form U4'') through Web CRD.
\10\ An individual with an indirect ownership interest in a
Member that is engaged in the securities business of such Member is
required to register under proposed Rule 313.
\11\ This requirement is consistent with FINRA's registration
requirement for ``Principals'' (as defined in NASD Rule 1021). ISE
is declining to adopt the term ``Principal'' in the Exchange
proposed rule change to avoid confusion with existing terms, such as
``Option Principal.''
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ISE will require all associated persons required to register under
proposed Rule 313 that are not already registered in Web CRD to
register (i.e., complete a Form U4) within 60 days of the approval date
of this filing by the U.S. Securities and Exchange Commission.\12\ With
respect to the examination requirement associated with the proposed
rule,\13\ ISE is working with other self-regulatory organizations
(``SROs'') to develop an additional examination for associated persons
who previously may not have been required to register under applicable
SRO rules (e.g., proprietary options traders) that may be used as an
alternative to the existing categories of registration.\14\ The
Exchange will notify its Members via regulatory circular what
qualification examination(s) will be acceptable for compliance with the
requirements proposed in Rule 313.
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\12\ Web CRD has been enhanced by FINRA to allow for general
registration of applicable associated persons.
\13\ The availability of the appropriate category on Web CRD for
any new qualification examinations recognized by the Exchange may be
subject to the timing for any required systems development on Web
CRD.
\14\ ISE intends to develop with other SROs, within six months
of the approval date of this filing, an alternative qualification
examination(s) that is appropriate for the additional individual
associated persons required to register under the proposed rule.
Once the development of this examination(s) has been completed, the
implementation and effective date will be subject to approval by the
Commission and any necessary systems development schedules to
implement the examination. If an alternative examination(s) is not
completed within six months of the approval date of this filing, the
Exchange will establish a deadline for qualification based on the
existing categories of registration and qualification examinations
available on Web CRD, until such time as the development and
implementation of an alternative examination(s) has been completed.
The referenced categories of registration available on Web CRD
include, but may not be limited to, the General Securities
Representative (GS) and General Securities Principal (GP), as
applicable to the type of business activities conducted. The
accompanying qualification examination for the General Securities
Representative is the Series 7 and the accompanying qualification
examination for the General Securities Principal is the Series 24.
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The Exchange is proposing to identify in Rule 313 several
categories of persons that are exempt from these additional
registration requirements. The categories of individual associated
persons that are exempt from the registration requirements include (i)
Individual associated persons functioning solely and exclusively in a
clerical or ministerial capacity; (ii) individual associated persons
that are not actively engaged in the securities business, (iii)
individual associated persons functioning solely and exclusively to
meet a need for nominal corporate officers or for capital
participation; and (iv) individual associated persons whose functions
are solely and exclusively related to transactions in commodities,
transactions in security futures and/or effecting transactions on the
floor of another national securities exchange and who are registered as
floor members with such exchange. The Exchange believes these
registration exemptions are appropriate because ISE would not consider
individuals that fall into the exemptions to be actively engaged in
securities business unless they are registered as floor members on
another national securities exchange, in which case, they are already
registered as floor members and not required to register at ISE. ISE
believes incorporating these exemptions into the rule provides
additional clarity to individual associated persons as to who will or
will not be required to register under the proposed rule. Any
applicable FINRA registration requirements would continue to apply to
Members that are also members of FINRA.
Additionally, under the proposal, the Exchange may waive the
qualification examination requirement where good cause is shown.
Similar rules are in place at the New York Stock Exchange, Inc.
(``NYSE'') and FINRA.\15\ In determining whether a waiver shall be
granted, the Exchange shall consider, among other things, previous
industry employment, training and/or the successful completion of
similar qualification examinations of other self-regulatory
organizations. Under the proposed Rule, individual associated persons
whose activities are limited solely to the transaction of business on
the floor of another exchange will be subject to the continuing
education requirements set forth in Rule 604 or any other continuing
education requirements as prescribed by the Exchange.
---------------------------------------------------------------------------
\15\ See NASD Rule 1070 (Qualification Examinations and Waiver
of Requirements) and NYSE Rule 345 (Employees--Registration,
Approval, Records).
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The Exchange also is proposing to require the designation of a
Financial/Operations Principal by each member that is subject to
Exchange Act Rule 15c3-1, and the designation of a Chief Compliance
Officer by each Member. Under the proposed rule, the Financial/
Operations Principal and Chief Compliance Officer are required to
register and pass the appropriate qualification examination.\16\ The
registration requirements for a Financial/Operations Principal are
consistent with CBOE Rule 3.6A,\17\ and the requirements for a Chief
Compliance Officer are consistent with proposed amendments to CBOE Rule
3.6A (which in turn are consistent with FINRA Rule 3130 and NASD Rule
1022).\18\ The proposal includes a limited exemption from the
requirement to pass the appropriate qualification examination by a
Chief Compliance Officer. Specifically, a person that has been
[[Page 80096]]
designated as a Chief Compliance Officer on Schedule A of Form BD for
at least two years immediately prior to January 1, 2002, and who has
not been subject within the last ten years to any statutory
disqualification as defined in Section 3(a)(39) of the Act; a
suspension; or the imposition of a $5,000 or more fine for a
violation(s) of any provision of any securities law or regulation, or
any agreement with, rule or standard of conduct of any securities
governmental agency, securities self-regulatory organization, or as
imposed by any such self-regulatory organization in connection with a
disciplinary proceeding, shall be required to register in the category
of registration appropriate to the function to be performed as
prescribed by the Exchange, but shall be exempt from the requirement to
pass the heightened qualification examination as prescribed by the
Exchange.
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\16\ The appropriate qualification examination for a Financial/
Operations Principal is the Series 27 exam. The appropriate
qualification examination for a Chief Compliance Officer is the
Series 14 exam. ISE is working with FINRA to establish this category
of registration and make the accompanying qualification examination
available at ISE on Web CRD.
\17\ The duties of a Financial/Operations Principal include
taking appropriate actions to assure that the Member complies with
applicable financial and operational requirements under SRO rules
and the Exchange Act. The Exchange notes that it is not the
Designated Examining Authority for any of its Members, but for
consistency with other SRO rules, the Exchange is proposing to
include the designation of a Financial/Operations Principal in its
Rules.
\18\ CBOE Registration Proposal, supra note 7.
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In addition, the Exchange is proposing to require registration and
successful completion of a heightened qualification examination by at
least two individuals that are each an officer, partner or director of
each Member.\19\ However, the Exchange notes that all individuals who
engage in supervisory functions of the Member's securities business
shall be required to register and pass the appropriate heightened
qualification examination(s) relevant to the particular category of
registration. Members that are sole proprietors are exempt from this
requirement. In addition, the Exchange may waive the requirement to
have two officers, partners and/or directors registered if a Member
conclusively demonstrates that only one officer, partner or director
should be required to register. For example, a Member could
conclusively demonstrate that only one individual is required to
register if such Member is owned by one individual (such as a single
member limited liability company), such individual acts as the only
trader on behalf of the Member, and the Member employs only one other
individual who functions only in a clerical capacity. The ability to
waive this registration requirement is consistent with similar FINRA
rules regarding principal registration.\20\
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\19\ With the exception of its application to sole proprietors,
this requirement is consistent with the registration requirement set
forth in NASD Rule 1021 addressing registration of two Principals
(as defined in NASD Rule 1021).
\20\ See NASD Rule 1021(e).
---------------------------------------------------------------------------
ISE is also proposing to allow a Member that conducts proprietary
trading only and has 25 or fewer registered persons to have only one
officer or partner registered under this section rather than two. This
exception is similar to that of several other exchanges and reflects
that such Members do not necessitate the same level of supervisory
structure as those Members that have customers or are larger in size.
For purposes of this requirement, a Member is be [sic] considered to
conduct only proprietary trading if it has the following
characteristics: (i) The Member is not required by Section 15(b)(8) of
the Exchange Act to become a FINRA member but is a member of another
registered securities exchange not registered solely under Section 6(g)
of the Exchange Act; (ii) all funds used or proposed to be used by the
Member are the Member's own capital, traded through the Member's own
accounts; (iii) the Member does not, and will not, have customers; and
(iv) all persons registered on behalf of the Member acting or to be
acting in the capacity of a trader must be owners of, employees of, or
contractors to the Member. The description of what constitutes
proprietary trading for purposes of this requirement is appropriate in
that it provides additional clarity for associated persons to evaluate
whether two individuals are required to register.
Proposed Rule 313 also sets forth the requirements for examinations
where there is a lapse in registration. Specifically, an individual
associated person shall be required to pass the appropriate
qualification examination for the category of registration if the
individual associated person's registration has been revoked by the
Exchange as a disciplinary sanction or whose most recent registration
has been terminated for a period of two or more years.
Additionally, the Exchange proposes to update Rule 604 regarding
continuing education requirements so that it is consistent with other
SRO rules.\21\ Specifically, the Exchange proposes to add a provision
detailing the procedures required for in-house delivery of the
regulatory element. The required procedures address responsibly [sic]
for the education program, site requirements, technology requirements,
supervision requirements, and administration of the program. Members
are required to file with their Designated Examining Authority, a
letter of attestation signed by a senior officer or partner, attesting
to the establishment of the required procedures, and must annually
represent that they have continued to maintain all required procedures
for the previous year. While the Exchange does not have a floor, for
consistency with other SRO rules, the Exchange also proposes to delete
language that excludes those people whose activities are limited solely
to the transaction of business on a floor from the definition of
``registered person'' for purposes of the Rule 604.\22\
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\21\ E.g., CBOE Rule 9.3A.
\22\ See CBOE Registration Proposal, supra note 7.
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Finally, this filing proposes to make non-substantive changes to
ISE Rule 601 (Registration of Options Principals), Rule 602
(Registration of Representatives) and Rule 603 (Termination of
Registered Persons) to define and reference certain terms consistently
within these rules and with proposed Rule 313. Specifically, these
rules currently contain inconsistent references to the Central
Registration Depository, and the registration and termination forms
required to be filed under the rules. Additionally, these rules contain
reference to the National Association of Securities Dealers or ``NASD''
which is now known as the Financial Industry Regulatory Authority or
``FINRA.''
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act,\23\ in general, and furthers the objectives of
Section 6(b)(5) of the Act,\24\ which requires, among other things,
that the Exchange's rules be designed to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and protect investors and the public interest. Specifically,
the enhanced registration and qualification requirements will provide
additional protection to investors and further promote the public
interest.
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\23\ 15 U.S.C. 78f(b).
\24\ 15 U.S.C. 78f(b)(5).
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In addition, the Exchange believes that the proposed rule change is
consistent with Section 6(c) of the Act,\25\ in general, and furthers
the objectives of Section 6(c)(3)(B) of the Act,\26\ which provides,
among other things, that a national securities exchange may bar a
natural person from becoming associated with a member if such natural
person does not meet the standards of training, experience and
competence as prescribed by the rules of the national securities
exchange. The Exchange also believes that the proposed rule change
furthers the objectives of Section 6(c)(3)(C) of the Act,\27\ which
provides, among other things, that a national securities exchange may
bar any person from
[[Page 80097]]
becoming associated with a member if such person does not agree to
supply the exchange with such information with respect to its dealings
with the member as may be specified by the rules of the exchange and to
permit the examination of its books and records to verify the accuracy
of any information so supplied.
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\25\ 15 U.S.C. 78f(c).
\26\ 15 U.S.C. 78f(c)(3)(B).
\27\ 15 U.S.C. 78f(c)(3)(C).
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B. Self-Regulatory Organization's Statement on Burden on Competition
This proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be 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 e-mail to rule-comments@sec.gov. Please include
File Number SR-ISE-2010-115 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-ISE-2010-115. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (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
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make publicly available. All
submissions should refer to File Number SR-ISE-2010-115 and should be
submitted on or before January 11, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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\28\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31951 Filed 12-20-10; 8:45 am]
BILLING CODE 8011-01-P
