Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 640, Continuing Education for Registered Persons and Adopt a Corresponding Fee, 55766-55769 [2013-22058]

Download as PDF 55766 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Notices systems? If so, please provide information on the differences between the two. 2. Are there any other examples of Alternative Compensatory Measures (e.g., other new technology) not already discussed in the NUREG/CR that should be considered? If so, please provide information on these alternative compensatory measures. 3. Are there any issues, concerns or better suggestions regarding the examples or technologies discussed in the NUREG/CR? If so, please provide your suggestions. This document is issued for comment only and is not intended for interim use. The NRC will review public comments received on the documents, incorporate suggested changes as necessary, and make the final NUREG-report available to the public. Dated at Rockville, Maryland, this 3rd day of September 2013. For the Nuclear Regulatory Commission. Mark Henry Salley, Chief, Fire Research Branch, Division of Risk Analysis, Office of Nuclear Regulatory Research. [FR Doc. 2013–22100 Filed 9–10–13; 8:45 am] BILLING CODE 7590–01–P 2. Evaluate the accuracy of OPM’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; 3. Enhance the quality, utility, and clarity of the information to be collected; and 4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses. Comments are encouraged and will be accepted until November 12, 2013. This process is conducted in accordance with 5 CFR 1320.1. DATES: Interested persons are invited to submit written comments on the proposed information collection to the U.S. Office of Personnel Management, Retirement Services, Union Square Room 370, 1900 E Street NW., Washington, DC 20415–3500, Attention: Alberta Butler, or sent by email to Alberta.Butler@opm.gov. ADDRESSES: A copy of this ICR with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW., Room 4445–P, Washington, DC 20415, Attention: Cyrus S. Benson, or sent by email to Cyrus.Benson@opm.gov or faxed to (202) 606–0910. FOR FURTHER INFORMATION CONTACT: OFFICE OF PERSONNEL MANAGEMENT Submission for Review: Civil Service Retirement System Survivor Annuitant Express Pay Application for Death Benefits, RI 25–51 U.S. Office of Personnel Management. ACTION: 60-day notice and request for comments. AGENCY: The Retirement Services, Office of Personnel Management (OPM) offers the general public and other Federal agencies the opportunity to comment on an extension, without change, of a currently approved information collection request (ICR) 3206–0233, Civil Service Retirement System Survivor Annuitant Express Pay Application for Death Benefits, RI 25– 51. As required by the Paperwork Reduction Act of 1995 (Pub. L. 104–13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104–106), OPM is soliciting comments for this collection. The Office of Management and Budget is particularly interested in comments that: 1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility; emcdonald on DSK67QTVN1PROD with NOTICES SUMMARY: VerDate Mar<15>2010 16:50 Sep 10, 2013 Jkt 229001 RI 25–51 will be used by the Civil Service Retirement System solely to pay benefits to the widow(er) of an annuitant. This application is intended for use in immediately authorizing payments to an annuitant’s widow or widower, based on the report of death, when our records show the decedent elected to provide benefits for the applicant. Analysis: Agency: Retirement Operations, Retirement Services, Office of Personnel Management. Title: Civil Service Retirement System Survivor Annuitant Express Pay Application for Death Benefits. OMB: 3206–0233. Frequency: On occasion. Affected Public: Individuals or Households. Number of Respondents: 34,800. Estimated Time Per Respondent: 30 minutes. Total Burden Hours: 17,400. SUPPLEMENTARY INFORMATION: PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 U.S. Office of Personnel Management. Elaine Kaplan, Acting Director. [FR Doc. 2013–22065 Filed 9–10–13; 8:45 am] BILLING CODE 6325–38–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70327; File No. SR–Phlx– 2013–85] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 640, Continuing Education for Registered Persons and Adopt a Corresponding Fee September 5, 2013. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on August 22, 2013, NASDAQ OMX PHLX LLC (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I and II, below, which Items have been prepared by the Exchange. Phlx has designated the proposed rule change as constituting a non-controversial rule change under Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 640, Continuing Education for Registered Persons, as described below, and to adopt a corresponding fee. The text of the proposed rule change is below; proposed new language is italicized; proposed deletions are in brackets. * * * * * Rule 640. Continuing Education for Registered Persons (a) Regulatory Element (1) Requirements—No member organization shall permit any registered person to continue to, and no registered person shall continue to, perform duties as a registered person, unless such person has complied with the 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 2 17 E:\FR\FM\11SEN1.SGM 11SEN1 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Notices $60.00 for each individual who is required to complete the Proprietary Trader Regulatory Element (S501). $100.00 for each individual who is required to complete the S101 or S201. FINRA, on behalf of the Exchange, will bill and collect these fees The following fees will be collected and retained by FINRA via the Web CRD registration system for the registration of associated persons of Exchange members that are not also FINRA members: (b)–(c) No change. * * * * * NASDAQ OMX PHLX LLC 1 PRICING SCHEDULE emcdonald on DSK67QTVN1PROD with NOTICES continuing education requirements of paragraph (a) of this Rule. Each registered person shall complete the Regulatory Element of the continuing education program on the occurrence of their second registration anniversary date(s), and every three years thereafter or as otherwise prescribed by the Exchange. On each occasion, the Regulatory Element must be completed within 120 days after the person’s registration anniversary date. A person’s initial registration date, also known as the ‘‘base date,’’ shall establish the cycle of anniversary dates for purposes of this Rule. Content. The content of the Regulatory Element of the program shall be determined by the Exchange for each registration category of persons subject to the Rule. The following Regulatory Elements administered by FINRA shall be required: Persons registered solely as Proprietary Traders pursuant to Rule 613(f) must complete the S501. Persons registered as General Securities Representatives pursuant to Rule 613(e) must complete the S101. Persons registered in a supervisory capacity pursuant to Rules 611 and 612 must complete the S201. * * * * * A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change ALL BILLING DISPUTES MUST BE SUBMITTED TO THE EXCHANGE IN WRITING AND MUST BE ACCOMPANIED BY SUPPORTING DOCUMENTATION. ALL DISPUTES MUST BE SUBMITTED NO LATER THAN SIXTY (60) DAYS AFTER RECEIPT OF A BILLING INVOICE, EXCEPT FOR DISPUTES CONCERNING NASDAQ OMX PSX FEES, PROPRIETARY DATA FEED FEES AND CO-LOCATION SERVICES FEES. AS OF JANUARY 3, 2011, THE EXCHANGE WILL CALCULATE FEES ON A TRADE DATE BASIS * * * * * VII. OTHER MEMBER FEES A. OPTION TRADING FLOOR FEES No change. B. PORT FEES No change. C. FINRA Fees Continuing Education Fees [$75.00] • The Continuing Education Fee will be assessed as to each individual who is required to complete the Regulatory Element of the Continuing Education Requirements pursuant to Exchange Rule 640. This fee is paid directly to FINRA. VerDate Mar<15>2010 16:50 Sep 10, 2013 Jkt 229001 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 these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1. Purpose The purpose of the proposed rule change is to codify in Rule 640 the specific continuing education requirements that currently apply and to adopt a continuing education requirement for persons registered as Proprietary Traders. The Exchange also proposes to adopt a fee for the new continuing education program applicable to Proprietary Traders. The Exchange adopted the Proprietary Trader 5 registration in 2012, working with various other exchanges and Financial Industry Regulatory Authority (‘‘FINRA’’). At that time, the Exchange stated that, as a result of the new registration requirements, additional persons will become subject to the Exchange’s continuing education requirements in Rule 640. The Exchange stated that it would announce to the membership when these new requirements will be implemented and 5 A Proprietary Trader is a person who is engaged solely in proprietary trading, market making or effecting transactions on behalf of a broker-dealer account. Phlx Rule 613(f). PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 55767 available for member organizations to access.6 At this time, the new continuing education program for Proprietary Traders will soon become available and will be administered by FINRA. The new program, the S501, is intended to address the specific continuing education of Proprietary Traders, based on the content outline for the Series 56 exam, which covers the main categories of rules and regulations generally applicable to such persons.7 The Continuing Education Regulatory Element is a computer-based education program administered by FINRA on behalf of the Exchange to help ensure that registered persons are kept current on regulatory, compliance and trading practice matters in the industry. The Exchange proposes to amend Rule 640(a) to specify the required Regulatory Element for each category of registered persons. Currently, Rule 640(a) provides that no member organization shall permit any registered person to continue to, and no registered person shall continue to perform duties as a registered person, unless such person has complied with the continuing education requirements of paragraph (a).8 Each registered person shall complete the Regulatory Element of the continuing education program on the occurrence of their [sic] second registration anniversary date(s), and every three years thereafter or as otherwise prescribed by the Exchange. On each occasion, the Regulatory Element must be completed within 120 days after the person’s registration anniversary date. A person’s initial registration date, also known as the ‘‘base date,’’ shall establish the cycle of anniversary dates for purposes of this 6 See Securities Exchange Act Release No. 66840 (April 20, 2012), 77 FR 25003 (April 26, 2012) (SR– Phlx–2012–23). 7 These generally include recordkeeping and recording requirements, types and characteristics of securities and investments, trading practices and display execution and trading systems. See Securities Exchange Act Release No. 66645 (March 22, 2012), 77 FR 19042 (March 29, 2012) (SR–Phlx– 2012–37). 8 Rule 640.01 exempts most floor persons from this requirement. Nevertheless, pursuant to Rule 625, Phlx requires periodic mandatory training. Training topics include, but are not limited to, training related to that person’s function at the Exchange, changes in existing automated systems or any new technology that is utilized by the Exchange, compliance with Exchange Rules and federal securities laws, and issues related to conduct, health and safety on the trading floor. In addition, floor members shall complete mandatory training programs, on at least a semi-annual basis, that address compliance with the federal securities laws and the Exchange’s Rules in place to prevent and deter unlawful trading by floor members. E:\FR\FM\11SEN1.SGM 11SEN1 55768 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Notices Rule. This applies to persons registered as Proprietary Traders as well. The Rule further provides that the content of the Regulatory Element of the program shall be determined by the Exchange for each registration category of persons subject to the Rule. The Exchange now proposes to make this a separate ‘‘Content’’ section and to make clear which specific programs are required, including both existing programs (S101 and S201) as well as the new Proprietary Trader continuing education program (S501). The following Regulatory Elements administered by FINRA shall be required: Persons registered solely as Proprietary Traders pursuant to Rule 613(f) must complete the S501. Persons registered as General Securities Representatives pursuant to Rule 613(e) must complete the S101. Persons registered in a supervisory capacity pursuant to Rules 611 and 612 must complete the S201. emcdonald on DSK67QTVN1PROD with NOTICES The Exchange believes that specifying the applicable Regulatory Element in the Rule should be helpful to members and member organizations in complying with the Rule. Only one Regulatory Element is required. For example, members registered as supervisors are subject to the S201 only; they do not also have to complete the Regulatory Element applicable to their prerequisite registration, such as the S501 or the S101.9 This proposal does not change the registration requirements. The Exchange also proposes to adopt a fee applicable to Proprietary Trader Regulatory Element. Currently, the applicable fee for the Regulatory Element (S101 and S201) is $100.10 The Exchange proposes to adopt a $60.00 fee for the S501. FINRA administers these programs on behalf of the exchanges and therefore the fees are payable directly to FINRA.11 The $60 fee will only be used for the administration of the S501 versus the S101 which utilizes 9 In the event that a person is registered both as a Proprietary Trader and a General Securities Representative, only one Regulatory Element is required—the ‘‘higher’’ of the two, which is the S101. 10 The Exchange’s fee schedule incorrectly states that the fee is $75.00; the Exchange is proposing to correct this. 11 The S501 was established for those registrants who have passed the Series 56 Qualification Exam as reflected in WebCRD. WebCRD is the central licensing and registration system for the U.S. securities industry. The CRD system enables individuals and firms seeking registration with multiple states and self-regulatory organizations to do so by submitting a single form, fingerprint card and a combined payment of fees to FINRA. Through the CRD system, FINRA maintains the qualification, employment and disciplinary histories of registered associated persons of broker-dealers. VerDate Mar<15>2010 16:50 Sep 10, 2013 Jkt 229001 the $100 fee for both development and administration. The costs associated with the development of the S501 are included in the examination fee. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 12 in general, and furthers the objectives of: (1) Section 6(c)(3)(B) of the Act,13 pursuant to which a national securities exchange prescribes standards of training, experience and competence for members and their associated persons; and (2) Section 6(b)(5) of the Act,14 in that it is designed, among other things, to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest, by requiring registered persons to complete the applicable continuing education program. The Exchange believes that a strong continuing education program should bolster the integrity of the Exchange by helping to ensure that all associated persons engaged in a securities business are, and will continue to be, properly trained and qualified to perform their functions. The Exchange does not believe that the proposal is unfairly discriminatory with respect to persons registered as a General Securities Representative who function in their current job as a Proprietary Trader, even though these persons are subject to the more stringent S101 rather than the S501; such persons are registered and qualified (Series 7) in a ‘‘higher’’ capacity and are therefore qualified to function in a capacity other than a Proprietary Trader, whether they choose to or not. Accordingly, requiring the S101 for such persons is appropriate and facilitates them being able to maintain their ‘‘higher’’ registration. The Exchange also believes that permitting General Securities Representatives functioning as Proprietary Traders to be [sic] complete the S501 would be confusing and difficult to monitor. The Exchange also believes that the proposal furthers the objectives of Section 6(b)(4) of the Act,15 in that it provides for an equitable allocation of reasonable fees and other charges among Exchange members and other persons using its facilities. Specifically, the new $60 fee is applicable to persons 12 15 U.S.C. 78f(b). U.S.C. 78(c)(3)(B). 14 15 U.S.C. 78f(b)(5). 15 15 U.S.C. 78f(b)(4). 13 15 PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 registered as a Proprietary Trader, which is a limited registration under Exchange rules. Accordingly, the proposed S501 Regulatory Element specifically correlates to the rules and obligations applicable to Proprietary Traders, which are fewer than those applicable to persons registered in other categories. Thus, the S501 is a more limited form of continuing education. Therefore, the Exchange believes that the lower fee ($60 rather than $100) is reasonable.16 The proposed fee is equitable, because it applies equally to all persons registered solely as Proprietary Traders. 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 not necessary or appropriate in furtherance of the purposes of the Act. Because the Regulatory Element is administered by FINRA, the fees are paid to FINRA, which does not raise competition issues. All of the exchanges that recognize the Proprietary Trader registration category are expected to adopt the same continuing education fee. All Proprietary Traders, regardless of where they are registered, will be subject to same continuing education requirements and the same continuing education fees. Thus, the proposal treats similarly situated persons in the same way. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative 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)(ii) of the Act 17 and subparagraph (f)(6) of Rule 19b–4 thereunder.18 16 The Commission notes that in the Purpose section of this filing, Phlx accurately states that the $100 fee for the S101 covers the costs associated with both development and administration of the continuing education program, while the $60 fee for the S501 only covers the cost of administration. 17 15 U.S.C. 78s(b)(3)(a)(ii). 18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give E:\FR\FM\11SEN1.SGM 11SEN1 Federal Register / Vol. 78, No. 176 / Wednesday, September 11, 2013 / Notices The Exchange has requested that the Commission waive the 30-day operative delay. The proposed rule change: Specifies the continuing education requirements that currently apply to registered persons; adopts a continuing education requirement, the S501, and a related fee for persons registered as Proprietary Traders; and corrects the Exchange’s fee schedule to reflect the proper fee, $100 rather than $75, for the S101 and S201. Waiver of the operative delay would allow the Exchange to clarify and correct its rules and implement the proposed rule change at once, enabling its Members to comply with their continuing education requirements in a timely manner, and thus is consistent with the protection of investors and the public interest. Therefore, the Commission designates the proposal operative upon filing.19 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and 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– Phlx–2013–85 on the subject line. emcdonald on DSK67QTVN1PROD with NOTICES Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 19 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). VerDate Mar<15>2010 16:50 Sep 10, 2013 Jkt 229001 All submissions should refer to File Number SR–Phlx–2013–85. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 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–Phlx–2013–85 and should be submitted on or before October 2, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Kevin M O’Neill, Deputy Secretary. [FR Doc. 2013–22058 Filed 9–10–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION North China Horticulture, Inc., File No. 500–1; Order of Suspension of Trading September 6, 2013. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of North China Horticulture, Inc. because it has not filed any periodic reports since the period ended September 30, 2011. The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed 20 17 PO 00000 CFR 200.30–3(a)(12). Frm 00094 Fmt 4703 Sfmt 4703 55769 company. Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the abovelisted company is suspended for the period from 9:30 a.m. EDT on September 6, 2013, through 11:59 p.m. EDT on September 19, 2013. By the Commission. Jill M. Peterson, Assistant Secretary. [FR Doc. 2013–22137 Filed 9–6–13; 4:15 pm] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION Reporting and Recordkeeping Requirements Under OMB Review Small Business Administration. Notice of 30 day Reporting Requirements Submitted for OMB Review. AGENCY: ACTION: Under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35), agencies are required to submit proposed reporting and recordkeeping requirements to OMB for review and approval, and to publish a notice in the Federal Register notifying the public that the agency has made such a submission. DATES: Submit comments on or before October 11, 2013. If you intend to comment but cannot prepare comments promptly, please advise the OMB Reviewer and the Agency Clearance Officer before the deadline. Copies: Request for clearance (OMB 83–1), supporting statement, and other documents submitted to OMB for review may be obtained from the Agency Clearance Officer. ADDRESSES: Address all comments concerning this notice to: Agency Clearance Officer, Curtis Rich, Small Business Administration, 409 3rd Street SW., 5th Floor, Washington, DC 20416; and OMB Reviewer, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Washington, DC 20503. FOR FURTHER INFORMATION CONTACT: Curtis Rich, Agency Clearance Officer, (202) 205–7030 curtis.rich@sba.gov. Abstract: SBA Forms 2181, 2182 and 2183 provide SBA with the necessary information to make informed and proper decisions regarding the approval or denial of an applicant for a small business investment company (SBIC) license. SBA uses this information to assess an applicant’s ability to successfully operate an SBIC with the SUMMARY: E:\FR\FM\11SEN1.SGM 11SEN1

Agencies

[Federal Register Volume 78, Number 176 (Wednesday, September 11, 2013)]
[Notices]
[Pages 55766-55769]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-22058]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70327; File No. SR-Phlx-2013-85]


Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 640, Continuing Education for Registered Persons and Adopt a 
Corresponding Fee

September 5, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on August 22, 2013, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') a 
proposed rule change as described in Items I and II, below, which Items 
have been prepared by the Exchange. Phlx has designated the proposed 
rule change as constituting a non-controversial rule change under 
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) 
thereunder,\4\ which renders the proposal effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 640, Continuing Education for 
Registered Persons, as described below, and to adopt a corresponding 
fee.
    The text of the proposed rule change is below; proposed new 
language is italicized; proposed deletions are in brackets.
* * * * *
    Rule 640. Continuing Education for Registered Persons
    (a) Regulatory Element
    (1) Requirements--No member organization shall permit any 
registered person to continue to, and no registered person shall 
continue to, perform duties as a registered person, unless such person 
has complied with the

[[Page 55767]]

continuing education requirements of paragraph (a) of this Rule.
    Each registered person shall complete the Regulatory Element of the 
continuing education program on the occurrence of their second 
registration anniversary date(s), and every three years thereafter or 
as otherwise prescribed by the Exchange. On each occasion, the 
Regulatory Element must be completed within 120 days after the person's 
registration anniversary date. A person's initial registration date, 
also known as the ``base date,'' shall establish the cycle of 
anniversary dates for purposes of this Rule.
    Content. The content of the Regulatory Element of the program shall 
be determined by the Exchange for each registration category of persons 
subject to the Rule. The following Regulatory Elements administered by 
FINRA shall be required:
    Persons registered solely as Proprietary Traders pursuant to Rule 
613(f) must complete the S501.
    Persons registered as General Securities Representatives pursuant 
to Rule 613(e) must complete the S101.
    Persons registered in a supervisory capacity pursuant to Rules 611 
and 612 must complete the S201.
* * * * *
NASDAQ OMX PHLX LLC \1\ PRICING SCHEDULE
    ALL BILLING DISPUTES MUST BE SUBMITTED TO THE EXCHANGE IN WRITING 
AND MUST BE ACCOMPANIED BY SUPPORTING DOCUMENTATION. ALL DISPUTES MUST 
BE SUBMITTED NO LATER THAN SIXTY (60) DAYS AFTER RECEIPT OF A BILLING 
INVOICE, EXCEPT FOR DISPUTES CONCERNING NASDAQ OMX PSX FEES, 
PROPRIETARY DATA FEED FEES AND CO-LOCATION SERVICES FEES. AS OF JANUARY 
3, 2011, THE EXCHANGE WILL CALCULATE FEES ON A TRADE DATE BASIS
* * * * *
VII. OTHER MEMBER FEES
A. OPTION TRADING FLOOR FEES

    No change.

B. PORT FEES

    No change.

C. FINRA Fees

    Continuing Education Fees [$75.00]

     The Continuing Education Fee will be assessed as to each 
individual who is required to complete the Regulatory Element of the 
Continuing Education Requirements pursuant to Exchange Rule 640. This 
fee is paid directly to FINRA.
    $60.00 for each individual who is required to complete the 
Proprietary Trader Regulatory Element (S501).
    $100.00 for each individual who is required to complete the S101 or 
S201.
    FINRA, on behalf of the Exchange, will bill and collect these fees
    The following fees will be collected and retained by FINRA via the 
Web CRD registration system for the registration of associated persons 
of Exchange members that are not also FINRA members:
    (b)-(c) 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 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 these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The purpose of the proposed rule change is to codify in Rule 640 
the specific continuing education requirements that currently apply and 
to adopt a continuing education requirement for persons registered as 
Proprietary Traders. The Exchange also proposes to adopt a fee for the 
new continuing education program applicable to Proprietary Traders.
    The Exchange adopted the Proprietary Trader \5\ registration in 
2012, working with various other exchanges and Financial Industry 
Regulatory Authority (``FINRA''). At that time, the Exchange stated 
that, as a result of the new registration requirements, additional 
persons will become subject to the Exchange's continuing education 
requirements in Rule 640. The Exchange stated that it would announce to 
the membership when these new requirements will be implemented and 
available for member organizations to access.\6\
---------------------------------------------------------------------------

    \5\ A Proprietary Trader is a person who is engaged solely in 
proprietary trading, market making or effecting transactions on 
behalf of a broker-dealer account. Phlx Rule 613(f).
    \6\ See Securities Exchange Act Release No. 66840 (April 20, 
2012), 77 FR 25003 (April 26, 2012) (SR-Phlx-2012-23).
---------------------------------------------------------------------------

    At this time, the new continuing education program for Proprietary 
Traders will soon become available and will be administered by FINRA. 
The new program, the S501, is intended to address the specific 
continuing education of Proprietary Traders, based on the content 
outline for the Series 56 exam, which covers the main categories of 
rules and regulations generally applicable to such persons.\7\ The 
Continuing Education Regulatory Element is a computer-based education 
program administered by FINRA on behalf of the Exchange to help ensure 
that registered persons are kept current on regulatory, compliance and 
trading practice matters in the industry.
---------------------------------------------------------------------------

    \7\ These generally include recordkeeping and recording 
requirements, types and characteristics of securities and 
investments, trading practices and display execution and trading 
systems. See Securities Exchange Act Release No. 66645 (March 22, 
2012), 77 FR 19042 (March 29, 2012) (SR-Phlx-2012-37).
---------------------------------------------------------------------------

    The Exchange proposes to amend Rule 640(a) to specify the required 
Regulatory Element for each category of registered persons. Currently, 
Rule 640(a) provides that no member organization shall permit any 
registered person to continue to, and no registered person shall 
continue to perform duties as a registered person, unless such person 
has complied with the continuing education requirements of paragraph 
(a).\8\ Each registered person shall complete the Regulatory Element of 
the continuing education program on the occurrence of their [sic] 
second registration anniversary date(s), and every three years 
thereafter or as otherwise prescribed by the Exchange. On each 
occasion, the Regulatory Element must be completed within 120 days 
after the person's registration anniversary date. A person's initial 
registration date, also known as the ``base date,'' shall establish the 
cycle of anniversary dates for purposes of this

[[Page 55768]]

Rule. This applies to persons registered as Proprietary Traders as 
well.
---------------------------------------------------------------------------

    \8\ Rule 640.01 exempts most floor persons from this 
requirement. Nevertheless, pursuant to Rule 625, Phlx requires 
periodic mandatory training. Training topics include, but are not 
limited to, training related to that person's function at the 
Exchange, changes in existing automated systems or any new 
technology that is utilized by the Exchange, compliance with 
Exchange Rules and federal securities laws, and issues related to 
conduct, health and safety on the trading floor. In addition, floor 
members shall complete mandatory training programs, on at least a 
semi-annual basis, that address compliance with the federal 
securities laws and the Exchange's Rules in place to prevent and 
deter unlawful trading by floor members.
---------------------------------------------------------------------------

    The Rule further provides that the content of the Regulatory 
Element of the program shall be determined by the Exchange for each 
registration category of persons subject to the Rule. The Exchange now 
proposes to make this a separate ``Content'' section and to make clear 
which specific programs are required, including both existing programs 
(S101 and S201) as well as the new Proprietary Trader continuing 
education program (S501). The following Regulatory Elements 
administered by FINRA shall be required:

    Persons registered solely as Proprietary Traders pursuant to 
Rule 613(f) must complete the S501.
    Persons registered as General Securities Representatives 
pursuant to Rule 613(e) must complete the S101.
    Persons registered in a supervisory capacity pursuant to Rules 
611 and 612 must complete the S201.

    The Exchange believes that specifying the applicable Regulatory 
Element in the Rule should be helpful to members and member 
organizations in complying with the Rule. Only one Regulatory Element 
is required. For example, members registered as supervisors are subject 
to the S201 only; they do not also have to complete the Regulatory 
Element applicable to their prerequisite registration, such as the S501 
or the S101.\9\ This proposal does not change the registration 
requirements.
---------------------------------------------------------------------------

    \9\ In the event that a person is registered both as a 
Proprietary Trader and a General Securities Representative, only one 
Regulatory Element is required--the ``higher'' of the two, which is 
the S101.
---------------------------------------------------------------------------

    The Exchange also proposes to adopt a fee applicable to Proprietary 
Trader Regulatory Element. Currently, the applicable fee for the 
Regulatory Element (S101 and S201) is $100.\10\ The Exchange proposes 
to adopt a $60.00 fee for the S501. FINRA administers these programs on 
behalf of the exchanges and therefore the fees are payable directly to 
FINRA.\11\ The $60 fee will only be used for the administration of the 
S501 versus the S101 which utilizes the $100 fee for both development 
and administration. The costs associated with the development of the 
S501 are included in the examination fee.
---------------------------------------------------------------------------

    \10\ The Exchange's fee schedule incorrectly states that the fee 
is $75.00; the Exchange is proposing to correct this.
    \11\ The S501 was established for those registrants who have 
passed the Series 56 Qualification Exam as reflected in WebCRD. 
WebCRD is the central licensing and registration system for the U.S. 
securities industry. The CRD system enables individuals and firms 
seeking registration with multiple states and self-regulatory 
organizations to do so by submitting a single form, fingerprint card 
and a combined payment of fees to FINRA. Through the CRD system, 
FINRA maintains the qualification, employment and disciplinary 
histories of registered associated persons of broker-dealers.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \12\ in general, and furthers the objectives of: (1) 
Section 6(c)(3)(B) of the Act,\13\ pursuant to which a national 
securities exchange prescribes standards of training, experience and 
competence for members and their associated persons; and (2) Section 
6(b)(5) of the Act,\14\ in that it is designed, among other things, to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
and, in general, to protect investors and the public interest, by 
requiring registered persons to complete the applicable continuing 
education program. The Exchange believes that a strong continuing 
education program should bolster the integrity of the Exchange by 
helping to ensure that all associated persons engaged in a securities 
business are, and will continue to be, properly trained and qualified 
to perform their functions. The Exchange does not believe that the 
proposal is unfairly discriminatory with respect to persons registered 
as a General Securities Representative who function in their current 
job as a Proprietary Trader, even though these persons are subject to 
the more stringent S101 rather than the S501; such persons are 
registered and qualified (Series 7) in a ``higher'' capacity and are 
therefore qualified to function in a capacity other than a Proprietary 
Trader, whether they choose to or not. Accordingly, requiring the S101 
for such persons is appropriate and facilitates them being able to 
maintain their ``higher'' registration. The Exchange also believes that 
permitting General Securities Representatives functioning as 
Proprietary Traders to be [sic] complete the S501 would be confusing 
and difficult to monitor.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78(c)(3)(B).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange also believes that the proposal furthers the 
objectives of Section 6(b)(4) of the Act,\15\ in that it provides for 
an equitable allocation of reasonable fees and other charges among 
Exchange members and other persons using its facilities. Specifically, 
the new $60 fee is applicable to persons registered as a Proprietary 
Trader, which is a limited registration under Exchange rules. 
Accordingly, the proposed S501 Regulatory Element specifically 
correlates to the rules and obligations applicable to Proprietary 
Traders, which are fewer than those applicable to persons registered in 
other categories. Thus, the S501 is a more limited form of continuing 
education. Therefore, the Exchange believes that the lower fee ($60 
rather than $100) is reasonable.\16\ The proposed fee is equitable, 
because it applies equally to all persons registered solely as 
Proprietary Traders.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b)(4).
    \16\ The Commission notes that in the Purpose section of this 
filing, Phlx accurately states that the $100 fee for the S101 covers 
the costs associated with both development and administration of the 
continuing education program, while the $60 fee for the S501 only 
covers the cost of administration.
---------------------------------------------------------------------------

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 not necessary or appropriate in 
furtherance of the purposes of the Act. Because the Regulatory Element 
is administered by FINRA, the fees are paid to FINRA, which does not 
raise competition issues. All of the exchanges that recognize the 
Proprietary Trader registration category are expected to adopt the same 
continuing education fee. All Proprietary Traders, regardless of where 
they are registered, will be subject to same continuing education 
requirements and the same continuing education fees. Thus, the proposal 
treats similarly situated persons in the same way.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative 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)(ii) of the Act \17\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\18\
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.

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

[[Page 55769]]

    The Exchange has requested that the Commission waive the 30-day 
operative delay. The proposed rule change: Specifies the continuing 
education requirements that currently apply to registered persons; 
adopts a continuing education requirement, the S501, and a related fee 
for persons registered as Proprietary Traders; and corrects the 
Exchange's fee schedule to reflect the proper fee, $100 rather than 
$75, for the S101 and S201. Waiver of the operative delay would allow 
the Exchange to clarify and correct its rules and implement the 
proposed rule change at once, enabling its Members to comply with their 
continuing education requirements in a timely manner, and thus is 
consistent with the protection of investors and the public interest. 
Therefore, the Commission designates the proposal operative upon 
filing.\19\
---------------------------------------------------------------------------

    \19\ 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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission will institute proceedings to determine whether the proposed 
rule change should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
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-Phlx-2013-85 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-Phlx-2013-85. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of 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-Phlx-2013-85 and 
should be submitted on or before October 2, 2013.
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
Kevin M O'Neill,
Deputy Secretary.
[FR Doc. 2013-22058 Filed 9-10-13; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.