Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Remove the Requirement That its Members Pass the DTR Examination Prior To Registering, 71398-71399 [2011-29677]

Download as PDF 71398 Federal Register / Vol. 76, No. 222 / Thursday, November 17, 2011 / Notices Act, the rules and regulations thereunder, and the rules of the Exchange.27 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,28 that the proposed rule change (SR–BYX–2011– 022), as modified by Partial Amendment No. 1, be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.29 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–29675 Filed 11–16–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65731; File No. SR–ISE– 2011–74] 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, Proposed Rule Change Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Remove the Requirement That its Members Pass the DTR Examination Prior To Registering November 10, 2011. 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 October 28, 2011, the International Securities Exchange, LLC (the ‘‘Exchange’’ or the ‘‘ISE’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which items have been prepared by the selfregulatory 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 jlentini on DSK4TPTVN1PROD with NOTICES The text of the proposed rule change is available on the Exchange’s Internet Web site at https://www.ise.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. Pursuant to the provisions of Section 19(b)(1) of the Act,3 the Exchange is filing a proposed rule change to remove the requirement that Designated Trading Representatives (‘‘DTRs’’) pass an examination administered by the ISE before they can be approved by the Exchange to enter quotations and orders on behalf of market makers. 1. Purpose The Exchange rules governing registration, examination, and continuing education requirements for ISE members previously only applied to associated persons who conducted a public customer business. Such persons were required, in part, to pass the General Securities Representative examination (‘‘Series 7’’) and the ISE’s Designated Trading Representative examination (‘‘DTR Exam’’) to function as representatives if accepting orders from non-member customers.4 ISE members whose business was limited to proprietary securities trading (‘‘Prop Traders’’) were only required to pass the DTR exam prior to receiving approval to enter quotations and orders on the Exchange. The ISE recently amended its rules governing registration, examination, and continuing education to require members, regardless of whether they conduct a public business or proprietary securities business, to register, qualify and comply with continuing education requirements.5 To address the gap in registration and examination requirements related to Prop Traders, the ISE, in conjunction with other SROs,6 implemented a new examination 4 See ISE Rule 602. Securities Exchange Act Release No. 63843 (February 4, 2011), 76 FR 7885 (February 11, 2011) (SR–ISE–2010–115). 6 The Series 56 examination program is shared by the ISE, Boston Options Exchange, Inc., Chicago Board Options Exchange, Inc., C2 Options Exchange, Inc., Chicago Stock Exchange, Inc., NASDAQ OMX, BX, NASDAQ OMX, PHLX, 5 See 27 15 U.S.C. 78f(b)(1). U.S.C. 78s(b)(2). 29 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(1). 28 15 VerDate Mar<15>2010 17:25 Nov 16, 2011 Jkt 226001 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 for Prop Traders (‘‘Series 56’’) that is administered by the Financial Industry Regulatory Authority on behalf of the SROs.7 Because the ISE now requires all Prop Traders to pass the Series 56 examination prior to being approved for membership, the Exchange believes that it is no longer necessary to administer its own exam. Likewise, the associated persons who are required to pass the Series 7 examination prior to receiving approval to enter quotations and orders on the Exchange, should no longer be required to also pass the DTR Exam because the Series 7 is a much more comprehensive examination and tests the candidate’s knowledge of the subject matter applicable to proprietary trading. Accordingly, the Exchange proposes to delete the requirement that Designated Trading Representatives take the DTR Exam. Such individuals will continue to be subject to the Exchange’s registration and other requirements specific [sic] Designated Trading Representatives. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act,8 in general, and furthers the objectives of Section 6(b)(1) 9 of the Act in particular, in that it is designed to enforce compliance by Exchange members and persons associated with its members with the rules of the Exchange. The Exchange also believes the proposed rule change furthers the objectives of Section 6(c)(3) 10 of the Act, which authorizes ISE to prescribe standards of training, experience and competence for persons associated with ISE members, in that this filing establishes that ISE members must take and pass the Series 56 examination, which is being adopted by other SROs so as to create marketwide consistency in the examination process, instead of administering an ISE specific examination. ISE believes the Series 56 examination program establishes the appropriate NASDAQ Stock Market LLC, National Stock Exchange, Inc., New York Stock Exchange, LLC, and NYSE Amex, Incorporated. 7 The Series 56 examination tests a candidate’s knowledge of proprietary trading generally and the industry rules applicable to trading of equity securities and listed options contracts. The Series 56 examination covers, among other things, recordkeeping and recording requirements, types and characteristics of securities and investments, trading practices and display execution and trading systems. While the examination is primarily dedicated to topics related to proprietary trading, the Series 56 examination also covers a few general concepts relating to customers. The Series 56 examination became available to ISE members on August 1, 2011. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(1). 10 15 U.S.C. 78f(c)(3). E:\FR\FM\17NON1.SGM 17NON1 Federal Register / Vol. 76, No. 222 / Thursday, November 17, 2011 / Notices qualifications for an individual associated person that is required to register as a Proprietary Trader under Exchange Rule 313, including, but not limited to, Market-Makers, proprietary traders and individuals effecting transactions on behalf of other brokerdealers. The Exchange believes the Series 56 addresses industry topics that establish the foundation for the regulatory and procedural knowledge necessary for individuals required to register as Designated Trading Representatives under ISE Rule 801. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. jlentini on DSK4TPTVN1PROD with NOTICES 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 Because the foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) 11 of the Act and Rule 19b– 4(f)(6) 12 thereunder. The Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing the proposed rule change. The Exchange has requested that the Commission waive the 30-day operative delay so that the proposed rule change may become effective and operative upon filing with the Commission. The Commission believes that such waiver will allow the Exchange to decommission the use of its own examination for registration purposes in conjunction with the Exchange’s deadline for its membership to have 11 15 12 17 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). VerDate Mar<15>2010 17:25 Nov 16, 2011 Jkt 226001 71399 taken and passed the Series 56 examination. Waiver of the operative delay will help to streamline the exam procedures, while simultaneously protecting investors and the public interest. Therefore, the Commission designates the proposal to be operative upon filing.13 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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 ISE. 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–ISE–2011–74 and should be submitted on or before December 8, 2011. IV. Solicitation of Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Elizabeth M. Murphy, Secretary. Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–ISE–2011–74 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–2011–74. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and [FR Doc. 2011–29677 Filed 11–16–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65736; File No. SR–NYSE– 2011–56] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Codify Certain Traditional Trading Floor Functions That May Be Performed by Designated Market Makers (‘‘DMMs’’) November 10, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on October 31, 2011, New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Rule 104 to codify certain traditional Trading Floor 3 functions 14 17 CFR 200.30–3(a)(12). U.S.C.78s(b)(1). 2 17 CFR 240.19b–4. 3 NYSE Rule 6A defines the term ‘‘Trading Floor’’ to mean, in relevant part, ‘‘the restricted-access 1 15 13 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 E:\FR\FM\17NON1.SGM Continued 17NON1

Agencies

[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Notices]
[Pages 71398-71399]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29677]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65731; File No. SR-ISE-2011-74]


Self-Regulatory Organizations; International Securities Exchange, 
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Remove the Requirement That its Members Pass the DTR 
Examination Prior To Registering

November 10, 2011.
    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 October 28, 2011, the International Securities Exchange, LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (``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

    Pursuant to the provisions of Section 19(b)(1) of the Act,\3\ the 
Exchange is filing a proposed rule change to remove the requirement 
that Designated Trading Representatives (``DTRs'') pass an examination 
administered by the ISE before they can be approved by the Exchange to 
enter quotations and orders on behalf of market makers.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's 
Internet Web site at https://www.ise.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of 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, Proposed Rule Change

1. Purpose
    The Exchange rules governing registration, examination, and 
continuing education requirements for ISE members previously only 
applied to associated persons who conducted a public customer business. 
Such persons were required, in part, to pass the General Securities 
Representative examination (``Series 7'') and the ISE's Designated 
Trading Representative examination (``DTR Exam'') to function as 
representatives if accepting orders from non-member customers.\4\ ISE 
members whose business was limited to proprietary securities trading 
(``Prop Traders'') were only required to pass the DTR exam prior to 
receiving approval to enter quotations and orders on the Exchange.
---------------------------------------------------------------------------

    \4\ See ISE Rule 602.
---------------------------------------------------------------------------

    The ISE recently amended its rules governing registration, 
examination, and continuing education to require members, regardless of 
whether they conduct a public business or proprietary securities 
business, to register, qualify and comply with continuing education 
requirements.\5\ To address the gap in registration and examination 
requirements related to Prop Traders, the ISE, in conjunction with 
other SROs,\6\ implemented a new examination for Prop Traders (``Series 
56'') that is administered by the Financial Industry Regulatory 
Authority on behalf of the SROs.\7\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 63843 (February 4, 
2011), 76 FR 7885 (February 11, 2011) (SR-ISE-2010-115).
    \6\ The Series 56 examination program is shared by the ISE, 
Boston Options Exchange, Inc., Chicago Board Options Exchange, Inc., 
C2 Options Exchange, Inc., Chicago Stock Exchange, Inc., NASDAQ OMX, 
BX, NASDAQ OMX, PHLX, NASDAQ Stock Market LLC, National Stock 
Exchange, Inc., New York Stock Exchange, LLC, and NYSE Amex, 
Incorporated.
    \7\ The Series 56 examination tests a candidate's knowledge of 
proprietary trading generally and the industry rules applicable to 
trading of equity securities and listed options contracts. The 
Series 56 examination covers, among other things, recordkeeping and 
recording requirements, types and characteristics of securities and 
investments, trading practices and display execution and trading 
systems. While the examination is primarily dedicated to topics 
related to proprietary trading, the Series 56 examination also 
covers a few general concepts relating to customers. The Series 56 
examination became available to ISE members on August 1, 2011.
---------------------------------------------------------------------------

    Because the ISE now requires all Prop Traders to pass the Series 56 
examination prior to being approved for membership, the Exchange 
believes that it is no longer necessary to administer its own exam. 
Likewise, the associated persons who are required to pass the Series 7 
examination prior to receiving approval to enter quotations and orders 
on the Exchange, should no longer be required to also pass the DTR Exam 
because the Series 7 is a much more comprehensive examination and tests 
the candidate's knowledge of the subject matter applicable to 
proprietary trading. Accordingly, the Exchange proposes to delete the 
requirement that Designated Trading Representatives take the DTR Exam. 
Such individuals will continue to be subject to the Exchange's 
registration and other requirements specific [sic] Designated Trading 
Representatives.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\8\ in general, and furthers the objectives of Section 6(b)(1) \9\ 
of the Act in particular, in that it is designed to enforce compliance 
by Exchange members and persons associated with its members with the 
rules of the Exchange. The Exchange also believes the proposed rule 
change furthers the objectives of Section 6(c)(3) \10\ of the Act, 
which authorizes ISE to prescribe standards of training, experience and 
competence for persons associated with ISE members, in that this filing 
establishes that ISE members must take and pass the Series 56 
examination, which is being adopted by other SROs so as to create 
market-wide consistency in the examination process, instead of 
administering an ISE specific examination. ISE believes the Series 56 
examination program establishes the appropriate

[[Page 71399]]

qualifications for an individual associated person that is required to 
register as a Proprietary Trader under Exchange Rule 313, including, 
but not limited to, Market-Makers, proprietary traders and individuals 
effecting transactions on behalf of other broker-dealers. The Exchange 
believes the Series 56 addresses industry topics that establish the 
foundation for the regulatory and procedural knowledge necessary for 
individuals required to register as Designated Trading Representatives 
under ISE Rule 801.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(1).
    \10\ 15 U.S.C. 78f(c)(3).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The 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

    Because the foregoing proposed rule change does not significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, by its terms, does 
not become operative for 30 days from the date on which it was filed, 
or such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) \11\ of the Act and Rule 19b-
4(f)(6) \12\ thereunder. The Exchange provided the Commission with 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at least 
five business days prior to the date of filing the proposed rule 
change.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    The Exchange has requested that the Commission waive the 30-day 
operative delay so that the proposed rule change may become effective 
and operative upon filing with the Commission. The Commission believes 
that such waiver will allow the Exchange to decommission the use of its 
own examination for registration purposes in conjunction with the 
Exchange's deadline for its membership to have taken and passed the 
Series 56 examination. Waiver of the operative delay will help to 
streamline the exam procedures, while simultaneously protecting 
investors and the public interest. Therefore, the Commission designates 
the proposal to be operative upon filing.\13\
---------------------------------------------------------------------------

    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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 email to rule-comments@sec.gov. Please include 
File Number SR-ISE-2011-74 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-2011-74. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the ISE. 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-ISE-2011-74 and should be 
submitted on or before December 8, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-29677 Filed 11-16-11; 8:45 am]
BILLING CODE 8011-01-P
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