Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 2.23 to Specify Applicable Continuing Education Requirements, Amending the NYSE Arca Options Fee Schedule to Specify Corresponding CE Fees and to Specify Fees for the Series 56 Examination, 62911-62915 [2013-24552]
Download as PDF
<![CDATA[
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
Electronic Comments
no substantive changes to the
Exchange’s operations nor its rules.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
sroberts on DSK5SPTVN1PROD with FRONT MATTER
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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 13 and Rule 19b–4(f)(6)
thereunder.
The Exchange has requested that the
Commission waive the 30-day operative
delay. The Commission notes that the
rule change raises no novel issues. It
corrects an inaccurate cross reference in
Rule 9.3A and would more clearly set
forth the continuing education
requirements for associated persons of
CBSX Trading Permit Holders. Waiver
of the operative delay would be
beneficial to associated persons of
member firms by making the existing
requirements clearer. Therefore, the
Commission designates the proposal
operative upon filing.14
At any time within 60 days of the
filing of this proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission 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:
13 15
U.S.C. 78s(b)(3)(A).
14 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
21:08 Oct 21, 2013
Jkt 232001
• 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–CBOE–2013–098 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–CBOE–2013–098. 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, on official business
days between the hours of 10:00 a.m.
and 3:00 p.m. Copies of such filing also
will be available for inspection and
copying at the principal office of the
CBOE. 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–CBOE–2013–098 and
should be submitted on or before
November 12, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Kevin M. O’Neill,
Deputy Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70598; File No. SR–
NYSEARCA–2013–96]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending Rule 2.23 to
Specify Applicable Continuing
Education Requirements, Amending
the NYSE Arca Options Fee Schedule
to Specify Corresponding CE Fees and
to Specify Fees for the Series 56
Examination
October 2, 2013.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
September 19, 2013, NYSE Arca, Inc.
(the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. NYSE ARCA has
designated the proposed rule change as
constituting a non-controversial rule
change under Section 19(b)(3)(A)(iii) 4 of
the Act and Rule 19b–4(f)(6) 5
thereunder, which renders the filing
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 2.23 to specify applicable
continuing education (‘‘CE’’)
requirements, (ii) [sic] amend the NYSE
Arca Options Fee Schedule (‘‘Fee
Schedule’’) to specify corresponding CE
fees, and (iii) amend the Fee Schedule
to specify fees for the Series 56
examination. The text of the proposed
rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
[FR Doc. 2013–24682 Filed 10–21–13; 8:45 am]
1 15
BILLING CODE 8011–01–P
15 17
PO 00000
Frm 00329
Fmt 4703
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 15 U.S.C. 78s(b)(3)(A)(iii).
5 17 CFR 240.19b–4(f)(6).
2 15
CFR 200.30–3(a)(12).
Sfmt 4703
62911
E:\FR\FM\22OCN1.SGM
22OCN1
62912
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to (i) amend
Rule 2.23 to specify applicable CE
requirements, (ii) amend the Fee
Schedule to specify corresponding CE
fees, and (iii) amend the Fee Schedule
to specify fees for the Series 56
examination.
CE Requirements
sroberts on DSK5SPTVN1PROD with FRONT MATTER
Rule 2.23(d) states that no OTP Firm
or OTP Holder may permit any
registered person to continue to, and no
registered person may continue to,
perform duties as a registered person
unless such person has complied with
the CE requirements of the rule. Rule
2.23(d) specifies the CE requirements for
registered persons subsequent to their
initial qualification and registration.
The requirements consist of a
Regulatory Element and a Firm
Element.6 The Regulatory Element is a
computer-based education program
administered by the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’),
on behalf of the Securities Industry
Council on Continuing Education, to
help ensure that registered persons are
kept up to date on regulatory,
compliance, and sales practice matters
in the industry.
6 Currently, the Firm Element applies to any
registered person who has direct contact with
customers in the conduct of the OTP Firm’s or OTP
Holder’s securities sales, trading or investment
banking activities, and to the immediate supervisors
of such persons (collectively called ‘‘covered
registered persons’’). See Rule 2.23(d)(2)(A). The
requirement stipulates that each OTP Firm and OTP
Holder must maintain a continuing and current
education program for its covered registered
persons to enhance their securities knowledge,
skills, and professionalism. Each OTP Firm and
OTP Holder has the requirement to annually
evaluate and prioritize its training needs and
develop a written training plan. See Rule
2.23(d)(2)(B)(i).
VerDate Mar<15>2010
21:08 Oct 21, 2013
Jkt 232001
There are currently three existing
Regulatory Element programs: (1) The
S201 (‘‘S201 CE Program’’) for registered
principals (e.g., General Securities
Principals and Limited Principals) and
supervisors; (2) the S106 (‘‘S106 CE
Program’’) for persons registered only as
Investment Company Products/Variable
Contracts Limited Representatives; and
(3) the S101 (‘‘S101 CE Program’’) for all
other registered persons (e.g., General
Securities Representatives). The
Exchange proposes to enumerate these
existing programs in subsection (A) of
Rule 2.23(d)(1).7
The Exchange also proposes to specify
the new S501 (‘‘S501 CE Program,’’ and
together with the S201, S106 and S101
CE Programs, ‘‘CE Programs’’) for
persons registered only as Proprietary
Traders.8 This would include registered
Proprietary Traders who have
successfully completed the Proprietary
Traders Examination (‘‘Series 56
Examination’’) 9 as well as registered
Proprietary Traders who have
completed the General Securities
Registered Representative Examination
(‘‘Series 7 Examination’’), but who have
only registered as Proprietary Traders.10
7 Rule 2.23(d)(1)(A) is currently ‘‘reserved,’’ but
would reflect the proposed new rule text as a result
of this proposed rule change.
8 A Proprietary Trader is any person engaged in
the purchase or sale of securities or other similar
instruments for the account of a member or member
organization with which he or she is associated, as
an employee or otherwise, and who does not
transact any business with the public. The term
‘‘Proprietary Trader’’ does not include a person who
is required to be registered as a Market Maker in
accordance with Rule 6.33 or a Market Maker
Authorized Trader in accordance with Rule 6.34A.
See Rule 2.23(b)(2)(C).
9 The Exchange previously amended its rules to
prescribe the Series 56 Examination as the
qualifying examination for registered Proprietary
Traders. See Securities Exchange Act Release No.
66452 (February 23, 2012), 77 FR 12347 (February
29, 2012) (SR–NYSEArca–2012–15). The Exchange
stated in that proposal that it intended to submit a
separate filing in the future to apply CE
requirements to such persons. See id. at 12349, note
14.
10 For purposes of this filing, ‘‘registration’’ refers
to the operational/functional registration status in
FINRA’s Central Registration Depository (‘‘CRD®’’)
(e.g., Proprietary Trader or General Securities
Representative), not the qualification
examination(s) that a registered person has
completed (e.g., the Series 56 Examination or the
Series 7 Examination).
All traders of OTP Holders and OTP Firms must
successfully complete the Series 7 Examination,
except as provided in Rule 2.23(b)(2). See Rule
2.23(b)(1). However, an individual who has
successfully completed the Series 7 Examination
who does not conduct business with the public is
permitted to register as a Proprietary Trader, either
exclusively or concurrently with registration as a
General Securities Representative, without
successfully completing the Series 56 Examination,
which would be redundant.
If a person initially qualified as a Proprietary
Trader by taking the Series 7 Examination or
otherwise previously maintained both Series 7 and
PO 00000
Frm 00330
Fmt 4703
Sfmt 4703
Individuals who maintain any other
registration would be subject to the CE
Program associated with such other
registration.
The S501 CE Program is a computerbased education program developed by
many of the self-regulatory
organizations (‘‘Participating SROs’’) 11
and administered by FINRA to ensure
that registered persons are kept current
on regulatory, compliance, and trading
practice matters in the industry. Unlike
the other CE Programs, the S501 CE
Program is not part of the Uniform
Continuing Education Program, which
is developed and maintained by the
Securities Industry Regulatory Council
on Continuing Education. However, the
S501 CE Program would logistically
operate as the current CE Programs do.
Specifically, registered persons would
be required, through CRD, to complete
the Regulatory Element of the S501 CE
Program on the second anniversary of
the base date and then every three years
thereafter. In creating the S501 CE
Program, the Participating SROs
determined that the current procedures
of the other CE Programs work well. The
Securities Industry Regulatory Council
on Continuing Education has tailored
the process of the other CE Programs
since their inception in a manner that
has been successful. Thus, as proposed,
the S501 CE Program would work in the
same manner. In addition, consistency
between the different programs would
avoid creating confusion among the
registered persons and FINRA.
As proposed, registered Proprietary
Traders would also be required to
complete the Firm Element outlined in
Rule 2.23(d)(2). Although registered
Proprietary Traders, including those
who have passed the Series 56
Examination, do not interact with the
public, the Exchange believes that this
Series 56 qualifications, but was only maintaining
a Proprietary Trader registration when the CE
requirement became due, then completion of the
S501 CE Program by such person would satisfy his
or her then-applicable CE requirement. However,
upon re-registering thereafter as a General
Securities Representative, such individual would be
required to complete the S101 CE Program the next
time he or she became subject to CE.
11 The Participating SROs that have assisted with
the development of, and plan to administer, the
Series 56 Examination and S501 CE Program are the
Exchange; C2 Options Exchange, Incorporated
(‘‘C2’’); Chicago Board Options Exchange,
Incorporated (‘‘CBOE’’); Chicago Stock Exchange,
Inc. (‘‘CHX’’); New York Stock Exchange LLC
(‘‘NYSE’’); NYSE MKT LLC (‘‘NYSE MKT’’); The
NASDAQ Stock Market LLC (‘‘NASDAQ’’); National
Stock Exchange, Inc. (‘‘NSX’’); NASDAQ OMX BX,
Inc. (‘‘BX’’); NASDAQ OMX PHLX LLC (‘‘PHLX’’);
BATS Y-Exchange, Inc. (‘‘BATS Y’’); BATS
Exchange, Inc. (‘‘BATS’’); EDGA Exchange, Inc.
(‘‘EDGA’’); EDGX Exchange, Inc. (‘‘EDGX’’);
International Securities Exchange, LLC (‘‘ISE’’);
BOX Options Exchange, LLC (‘‘BOX’’); and Miami
International Securities Exchange LLC (‘‘MIAX’’).
E:\FR\FM\22OCN1.SGM
22OCN1
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
sroberts on DSK5SPTVN1PROD with FRONT MATTER
requirement is appropriate because it
ensures that these registered Proprietary
Traders continue to enhance their
securities knowledge, skill, and
professionalism. As stated in Rule
2.23(d)(2)(B)(ii), the program should be
tailored to fit the business of the OTP
Holder or OTP Firm. Thus, the
Exchange believes that it is appropriate
that registered Proprietary Traders also
complete the Firm Element.
The introduction of the S501 CE
Program would allow the Exchange to
tailor its CE requirements more closely
to those individuals who are registered
only as Proprietary Traders. More
specifically, the Exchange believes that
the proposed rule change would allow
persons registered only as Proprietary
Traders to complete a CE Program
separate from persons maintaining other
registrations. For example, in
comparison to the Series 7 Examination,
the Series 56 Examination is more
closely tailored to the practice of
proprietary trading while the Series 7
Examination is more comprehensive. As
such, the Exchange believes that the
S501 CE Program should also be closely
tailored to proprietary trading. If an
individual remains registered in another
capacity, such as a General Securities
Representative, the Exchange believes
that it is appropriate that such
individual continue to be required to
complete the more comprehensive CE
Program (i.e., the S101 CE Program).
The Exchange anticipates that the other
Participating SROs will similarly adopt,
or have adopted, rules requiring
completion of the S501 CE Program for
registered Proprietary Traders.12
CE Fees
The Exchange proposes to amend the
Fee Schedule to specify the CRD session
fees for the CE Programs described
above, including the existing CE
Programs and the proposed new S501
CE Program. Specifically, the Exchange
proposes to specify the existing $100
session fee associated with the existing
CE Programs (i.e., the S201, S106 and
S101 CE Programs) and a new $60
session fee associated with the new
S501 CE Program.13 The Exchange
anticipates that other exchanges
requiring completion of the S501 CE
Program will similarly implement
corresponding fees. As with existing CE
Program session fees, only one $60
12 See, e.g., Securities Exchange Act Release No.
70027 (July 23, 2013), 78 FR 45584 (July 29, 2013)
(SR–CBOE–2013–076).
13 ‘‘Session’’ refers to a registered person sitting
for the actual computer-based CE training. FINRA
administers the CE Programs on behalf of the
Exchange. OTP Holders and OTP Firms pay the
related fees directly to FINRA through CRD.
VerDate Mar<15>2010
21:08 Oct 21, 2013
Jkt 232001
session fee would be charged through
CRD for a registered person completing
the S501 CE Program, even if such
registered person’s firm was a member
of multiple exchanges.
The Exchange has determined that the
$60 session fee is necessary to
administer the S501 CE Program.
Specifically, the $60 session fee will be
used to fund the S501 CE Program
administered to persons registered only
as Proprietary Traders who are required
to complete the S501 CE Program. The
$60 session fee is less than the existing
$100 session fee currently charged by
FINRA through CRD for the existing CE
Programs, including the S101 CE
Program, because the fees associated
with the existing CE Programs are
utilized for both development and
administration, whereas the $60 session
fee for the S501 CE Program would only
be used for the administration of the
program. The costs associated with the
development of the S501 CE Program
are included in the Series 56
Examination fee. The Exchange
anticipates that the other Participating
SROs will adopt, or have adopted, the
same $60 session fee applicable to
completion of the S501 CE Program.14
Series 56 Examination Fees
The Exchange previously amended its
rules to prescribe the Series 56
Examination as the qualifying
examination for registered Proprietary
Traders.15 The Exchange hereby
proposes to amend the Fee Schedule to
specify a fee of $195 per registered
person that chooses to complete the
Series 56 Examination.
The Fee Schedule does not currently
set forth the examination fees for other
qualification examinations required or
accepted by the Exchange because these
programs are within FINRA’s
jurisdiction. The Series 56 Examination,
however, is a limited registration
category that is not recognized by
FINRA under its registration rules.
However, as with existing non-FINRA
examinations, FINRA administers the
Series 56 Examination and collects the
$195 fee through CRD on behalf of the
SROs that developed and maintain the
exam. Additionally, only one $195 fee
would be charged through CRD for a
registered person completing the Series
56 Examination, even if such registered
person’s firm was a member of multiple
exchanges. The Exchange anticipates
that the other Participating SROs will
adopt, or have adopted, the same $195
14 See, e.g., Securities Exchange Act Release No.
70064 (July 30, 2013), 78 FR 47469 (August 5, 2013)
(SR–CBOE–2013–078).
15 See supra note 12.
PO 00000
Frm 00331
Fmt 4703
Sfmt 4703
62913
fee applicable to completion of the
Series 56 Examination.16
The proposed change is not otherwise
intended to address any other issues
relating to CE or related fees and the
Exchange is not aware of any problems
that OTP Holders, OTP Firms or their
registered persons would have in
complying with the proposed change.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(c) of the Act,17
in general, and furthers the objectives of
Section 6(c)(3) of the Act,18 in
particular, which authorizes the
Exchange to prescribe standards of
training, experience and competence for
registered persons of OTP Holders and
OTP Firms. The proposed rule change
would specify the existing CE
requirements for registered persons of
OTP Holders and OTP Firms while also
specifying the new S501 CE Program
requirement for registered Proprietary
Traders of OTP Holders and OTP Firms.
The Exchange believes that the
proposed rule change is reasonable and
sets forth the applicable CE
requirements for individuals required to
register under Rule 2.23 and will
therefore contribute to ensuring that
registered persons of OTP Holders and
OTP Firms are properly trained. In this
regard, the Exchange believes that the
S501 CE Program is the appropriate CE
Program for persons registered only as
Proprietary Traders because the S501 CE
Program is specifically tailored toward
proprietary trading. Individuals who
maintain any other registration would
be required to complete the CE Program
associated with such other registration,
even if simultaneously registered as
Proprietary Traders, because such other
CE Program would be more
comprehensive and correspond to the
other, more comprehensive registration
category. The Exchange also believes
that the proposed rule change is
reasonable because the other
Participating SROs are anticipated to
adopt, or have adopted, rules requiring
completion of the S501 CE Program for
registered Proprietary Traders.19
The Exchange also believes that the
proposed rule change is consistent with
Section 6(b) of the Act,20 in general, and
furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,21 in
16 See, e.g., Securities Exchange Act Release No.
70163 (August 12, 2013), 78 FR 50120 (August 16,
2013) (SR–EDGA–2013–24).
17 15 U.S.C. 78f(c).
18 15 U.S.C. 78f(c)(3).
19 See supra note 10.
20 15 U.S.C. 78f(b).
21 15 U.S.C. 78f(b)(4) and (5).
E:\FR\FM\22OCN1.SGM
22OCN1
sroberts on DSK5SPTVN1PROD with FRONT MATTER
62914
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
particular, because it provides for the
equitable allocation of reasonable dues,
fees, and other charges among its
members, issuers and other persons
using its facilities and does not unfairly
discriminate between customers,
issuers, brokers or dealers. The
Exchange believes that the proposed $60
session fee is reasonable. While it is less
than the existing $100 session fee
currently charged by FINRA through
CRD for the existing CE Programs,
including the S101 CE Program, the fees
associated with the existing CE
Programs are utilized for both
development and administration,
whereas the $60 session fee for the S501
CE Program would only be used for the
administration of the program. The costs
associated with the development of the
S501 CE Program are included in the
Series 56 Examination fee. The
Exchange also believes that the fee is
reasonable because the other
Participating SROs are anticipated to
adopt, or have adopted, the same $60
session fee applicable to completion of
the S501 CE Program.22 The Exchange
also believes that the proposed rule
change is reasonable because it will
specify the existing $100 session fee
applicable to registered persons of OTP
Holders and OTP Firms who are subject
to CE requirements, which is collected
by FINRA through CRD. Finally, the
Exchange believes that the proposed
rule change is equitable and not unfairly
discriminatory because all registered
persons of OTP Holders and OTP Firms
that are subject to CE requirements
would be treated the same, as is
currently the case. Therefore, any
registered person of an OTP Holder or
OTP Firm that is required to complete
the S501 CE Program would be subject
to the corresponding $60 session fee.
The Exchange believes that it is
reasonable to include the Series 56
Examination fee within the Fee
Schedule to make the cost of this
examination clear to OTP Holders and
OTP Firms. The proposed fee is
reasonably designed to allow FINRA to
cover its cost of administering the Series
56 Examination on behalf of the
Exchange. The Exchange believes that
the proposed $195 Series 56
Examination fee is also reasonable
because it is designed to reflect the costs
of maintaining and developing the
Series 56 Examination, as well as the
development of the S501 CE Program,
and to ensure that the examination’s
content is, and continues to be,
adequate for testing the competence and
knowledge generally applicable to
proprietary trading. The Exchange also
believes that the fee is reasonable
because the Exchange anticipates that
the other Participating SROs will adopt,
or have adopted, the same $195 fee
applicable to completion of the Series
56 Examination.23 Finally, the Exchange
believes that the proposed rule change
is equitable and not unfairly
discriminatory because all registered
persons of ATP Holders that wish to be
registered as Proprietary Traders would
be treated the same, as is currently the
case.
For these reasons, the Exchange
believes that the proposal is consistent
with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,24 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.
Specifically, the Exchange does not
believe that the proposed administrative
changes (i.e., specifying the existing CE
Programs and related fees), the
introduction of the S501 CE Program
and related fee, or the introduction of
the Series 56 Examination fee will affect
intermarket competition because the
Exchange anticipates that the other
Participating SROs will similarly adopt,
or have adopted, rules requiring
completion of the S501 CE Program for
registered Proprietary Traders, the same
$60 session fee applicable to completion
of the S501 CE Program and the same
$195 fee applicable to completion of the
Series 56 Examination.25 In addition,
the Exchange does not believe that the
proposed rule change will affect
intramarket competition because all
similarly situated registered persons of
OTP Holders and OTP Firms, e.g.,
registered persons maintaining the same
categories of registration, are required to
complete the same CE Programs, the
same qualification examinations, and
are subject to the same fees.
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.
23 See
supra note 16.
U.S.C. 78f(b)(8).
25 See supra notes 12, 14 and 16.
24 15
22 See
supra note 14.
VerDate Mar<15>2010
21:08 Oct 21, 2013
Jkt 232001
PO 00000
Frm 00332
Fmt 4703
Sfmt 4703
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 26 and
subparagraph (f)(6) of Rule 19b–4
thereunder.27
The Exchange has requested that the
Commission waive the 30-day operative
delay. Waiver of the operative delay
would allow the Exchange to modify 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.28
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
26 15
U.S.C. 78s(b)(3)(a)(ii).
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.
28 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).
27 17
E:\FR\FM\22OCN1.SGM
22OCN1
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEArca–2013–96 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–NYSEArca–2013–96. 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–NYSEArca–2013–96 and
should be submitted on or before
November 12, 2013.
sroberts on DSK5SPTVN1PROD with FRONT MATTER
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–24552 Filed 10–21–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70652; File No. SR–NYSE–
2013–66]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Amending Rule
2 To Specify That the Definition of an
Approved Person Does Not Include a
Governmental Entity and Amending
Rule 304 To Provide That If a
Governmental Entity Directly or
Indirectly Owns a Member
Organization, Then the Member
Organization Must Identify Such
Governmental Entity to The Exchange
October 10, 2013.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on
September 26, 2013, New York Stock
Exchange LLC (‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 2 to specify that the definition of
an approved person does not include a
governmental entity and amend Rule
304 to provide that if a governmental
entity directly or indirectly owns a
member organization, then the member
organization must identify such
governmental entity to the Exchange.
The text of the proposed rule change is
available on the Exchange’s Web site at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
29 17
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
21:08 Oct 21, 2013
Jkt 232001
PO 00000
Frm 00333
Fmt 4703
Sfmt 4703
62915
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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 2 to specify that the definition of
an approved person does not include a
governmental entity and amend Rule
304 to provide that if a governmental
entity directly or indirectly owns a
member organization, then the member
organization must identify such
governmental entity to the Exchange.
Under Rule 2(b)(i), a ‘‘member
organization’’ is defined as a registered
broker-dealer that has been approved for
membership on NYSE. To qualify as a
member organization, a broker-dealer
must be a member of either (i) the
Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) or (ii) a
registered securities exchange other
than NYSE. Under Rule 2(c), an
approved person of a member
organization is defined as a person,
other than a member, principal
executive or employee of a member
organization, who controls a member
organization, is engaged in a securities
or kindred business that is controlled by
a member or member organization, or is
a U.S.-registered broker-dealer under
common control with a member
organization. Under Rule 2(d), ‘‘control’’
means the power to direct or cause the
direction of the management or policies
of a person whether through ownership
of securities, by contract or otherwise. A
person is presumed to control another
person if such person, directly or
indirectly, (i) has the right to vote 25
percent or more of the voting securities,
(ii) is entitled to receive 25 percent or
more of the net profits, or (iii) is a
director, general partner or principal
executive (or person occupying a similar
status or performing similar functions)
of the other person.4
Rule 304 provides that a member
organization must identify each
approved person to the Exchange. Each
approved person must execute a written
consent to the jurisdiction of the
Exchange and agree to (1) supply the
Exchange with information relating to
4 The Exchange notes that the approved person
definition is an Exchange convention and is not
intended to be identical to the definition of
‘‘associated person’’ pursuant to Section 3(a)(18) of
the Act. See 15 U.S.C. 78c(a)(18).
E:\FR\FM\22OCN1.SGM
22OCN1
]]>Agencies
[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62911-62915]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24552]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70598; File No. SR-NYSEARCA-2013-96]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending Rule 2.23
to Specify Applicable Continuing Education Requirements, Amending the
NYSE Arca Options Fee Schedule to Specify Corresponding CE Fees and to
Specify Fees for the Series 56 Examination
October 2, 2013.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on September 19, 2013, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. NYSE ARCA has designated the proposed rule change as
constituting a non-controversial rule change under Section
19(b)(3)(A)(iii) \4\ of the Act and Rule 19b-4(f)(6) \5\ thereunder,
which renders the filing 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
\4\ 15 U.S.C. 78s(b)(3)(A)(iii).
\5\ 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 2.23 to specify applicable
continuing education (``CE'') requirements, (ii) [sic] amend the NYSE
Arca Options Fee Schedule (``Fee Schedule'') to specify corresponding
CE fees, and (iii) amend the Fee Schedule to specify fees for the
Series 56 examination. The text of the proposed rule change is
available on the Exchange's Web site at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
[[Page 62912]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to (i) amend Rule 2.23 to specify applicable
CE requirements, (ii) amend the Fee Schedule to specify corresponding
CE fees, and (iii) amend the Fee Schedule to specify fees for the
Series 56 examination.
CE Requirements
Rule 2.23(d) states that no OTP Firm or OTP Holder may permit any
registered person to continue to, and no registered person may continue
to, perform duties as a registered person unless such person has
complied with the CE requirements of the rule. Rule 2.23(d) specifies
the CE requirements for registered persons subsequent to their initial
qualification and registration. The requirements consist of a
Regulatory Element and a Firm Element.\6\ The Regulatory Element is a
computer-based education program administered by the Financial Industry
Regulatory Authority, Inc. (``FINRA''), on behalf of the Securities
Industry Council on Continuing Education, to help ensure that
registered persons are kept up to date on regulatory, compliance, and
sales practice matters in the industry.
---------------------------------------------------------------------------
\6\ Currently, the Firm Element applies to any registered person
who has direct contact with customers in the conduct of the OTP
Firm's or OTP Holder's securities sales, trading or investment
banking activities, and to the immediate supervisors of such persons
(collectively called ``covered registered persons''). See Rule
2.23(d)(2)(A). The requirement stipulates that each OTP Firm and OTP
Holder must maintain a continuing and current education program for
its covered registered persons to enhance their securities
knowledge, skills, and professionalism. Each OTP Firm and OTP Holder
has the requirement to annually evaluate and prioritize its training
needs and develop a written training plan. See Rule
2.23(d)(2)(B)(i).
---------------------------------------------------------------------------
There are currently three existing Regulatory Element programs: (1)
The S201 (``S201 CE Program'') for registered principals (e.g., General
Securities Principals and Limited Principals) and supervisors; (2) the
S106 (``S106 CE Program'') for persons registered only as Investment
Company Products/Variable Contracts Limited Representatives; and (3)
the S101 (``S101 CE Program'') for all other registered persons (e.g.,
General Securities Representatives). The Exchange proposes to enumerate
these existing programs in subsection (A) of Rule 2.23(d)(1).\7\
---------------------------------------------------------------------------
\7\ Rule 2.23(d)(1)(A) is currently ``reserved,'' but would
reflect the proposed new rule text as a result of this proposed rule
change.
---------------------------------------------------------------------------
The Exchange also proposes to specify the new S501 (``S501 CE
Program,'' and together with the S201, S106 and S101 CE Programs, ``CE
Programs'') for persons registered only as Proprietary Traders.\8\ This
would include registered Proprietary Traders who have successfully
completed the Proprietary Traders Examination (``Series 56
Examination'') \9\ as well as registered Proprietary Traders who have
completed the General Securities Registered Representative Examination
(``Series 7 Examination''), but who have only registered as Proprietary
Traders.\10\ Individuals who maintain any other registration would be
subject to the CE Program associated with such other registration.
---------------------------------------------------------------------------
\8\ A Proprietary Trader is any person engaged in the purchase
or sale of securities or other similar instruments for the account
of a member or member organization with which he or she is
associated, as an employee or otherwise, and who does not transact
any business with the public. The term ``Proprietary Trader'' does
not include a person who is required to be registered as a Market
Maker in accordance with Rule 6.33 or a Market Maker Authorized
Trader in accordance with Rule 6.34A. See Rule 2.23(b)(2)(C).
\9\ The Exchange previously amended its rules to prescribe the
Series 56 Examination as the qualifying examination for registered
Proprietary Traders. See Securities Exchange Act Release No. 66452
(February 23, 2012), 77 FR 12347 (February 29, 2012) (SR-NYSEArca-
2012-15). The Exchange stated in that proposal that it intended to
submit a separate filing in the future to apply CE requirements to
such persons. See id. at 12349, note 14.
\10\ For purposes of this filing, ``registration'' refers to the
operational/functional registration status in FINRA's Central
Registration Depository (``CRD[supreg]'') (e.g., Proprietary Trader
or General Securities Representative), not the qualification
examination(s) that a registered person has completed (e.g., the
Series 56 Examination or the Series 7 Examination).
All traders of OTP Holders and OTP Firms must successfully
complete the Series 7 Examination, except as provided in Rule
2.23(b)(2). See Rule 2.23(b)(1). However, an individual who has
successfully completed the Series 7 Examination who does not conduct
business with the public is permitted to register as a Proprietary
Trader, either exclusively or concurrently with registration as a
General Securities Representative, without successfully completing
the Series 56 Examination, which would be redundant.
If a person initially qualified as a Proprietary Trader by
taking the Series 7 Examination or otherwise previously maintained
both Series 7 and Series 56 qualifications, but was only maintaining
a Proprietary Trader registration when the CE requirement became
due, then completion of the S501 CE Program by such person would
satisfy his or her then-applicable CE requirement. However, upon re-
registering thereafter as a General Securities Representative, such
individual would be required to complete the S101 CE Program the
next time he or she became subject to CE.
---------------------------------------------------------------------------
The S501 CE Program is a computer-based education program developed
by many of the self-regulatory organizations (``Participating SROs'')
\11\ and administered by FINRA to ensure that registered persons are
kept current on regulatory, compliance, and trading practice matters in
the industry. Unlike the other CE Programs, the S501 CE Program is not
part of the Uniform Continuing Education Program, which is developed
and maintained by the Securities Industry Regulatory Council on
Continuing Education. However, the S501 CE Program would logistically
operate as the current CE Programs do. Specifically, registered persons
would be required, through CRD, to complete the Regulatory Element of
the S501 CE Program on the second anniversary of the base date and then
every three years thereafter. In creating the S501 CE Program, the
Participating SROs determined that the current procedures of the other
CE Programs work well. The Securities Industry Regulatory Council on
Continuing Education has tailored the process of the other CE Programs
since their inception in a manner that has been successful. Thus, as
proposed, the S501 CE Program would work in the same manner. In
addition, consistency between the different programs would avoid
creating confusion among the registered persons and FINRA.
---------------------------------------------------------------------------
\11\ The Participating SROs that have assisted with the
development of, and plan to administer, the Series 56 Examination
and S501 CE Program are the Exchange; C2 Options Exchange,
Incorporated (``C2''); Chicago Board Options Exchange, Incorporated
(``CBOE''); Chicago Stock Exchange, Inc. (``CHX''); New York Stock
Exchange LLC (``NYSE''); NYSE MKT LLC (``NYSE MKT''); The NASDAQ
Stock Market LLC (``NASDAQ''); National Stock Exchange, Inc.
(``NSX''); NASDAQ OMX BX, Inc. (``BX''); NASDAQ OMX PHLX LLC
(``PHLX''); BATS Y-Exchange, Inc. (``BATS Y''); BATS Exchange, Inc.
(``BATS''); EDGA Exchange, Inc. (``EDGA''); EDGX Exchange, Inc.
(``EDGX''); International Securities Exchange, LLC (``ISE''); BOX
Options Exchange, LLC (``BOX''); and Miami International Securities
Exchange LLC (``MIAX'').
---------------------------------------------------------------------------
As proposed, registered Proprietary Traders would also be required
to complete the Firm Element outlined in Rule 2.23(d)(2). Although
registered Proprietary Traders, including those who have passed the
Series 56 Examination, do not interact with the public, the Exchange
believes that this
[[Page 62913]]
requirement is appropriate because it ensures that these registered
Proprietary Traders continue to enhance their securities knowledge,
skill, and professionalism. As stated in Rule 2.23(d)(2)(B)(ii), the
program should be tailored to fit the business of the OTP Holder or OTP
Firm. Thus, the Exchange believes that it is appropriate that
registered Proprietary Traders also complete the Firm Element.
The introduction of the S501 CE Program would allow the Exchange to
tailor its CE requirements more closely to those individuals who are
registered only as Proprietary Traders. More specifically, the Exchange
believes that the proposed rule change would allow persons registered
only as Proprietary Traders to complete a CE Program separate from
persons maintaining other registrations. For example, in comparison to
the Series 7 Examination, the Series 56 Examination is more closely
tailored to the practice of proprietary trading while the Series 7
Examination is more comprehensive. As such, the Exchange believes that
the S501 CE Program should also be closely tailored to proprietary
trading. If an individual remains registered in another capacity, such
as a General Securities Representative, the Exchange believes that it
is appropriate that such individual continue to be required to complete
the more comprehensive CE Program (i.e., the S101 CE Program). The
Exchange anticipates that the other Participating SROs will similarly
adopt, or have adopted, rules requiring completion of the S501 CE
Program for registered Proprietary Traders.\12\
---------------------------------------------------------------------------
\12\ See, e.g., Securities Exchange Act Release No. 70027 (July
23, 2013), 78 FR 45584 (July 29, 2013) (SR-CBOE-2013-076).
---------------------------------------------------------------------------
CE Fees
The Exchange proposes to amend the Fee Schedule to specify the CRD
session fees for the CE Programs described above, including the
existing CE Programs and the proposed new S501 CE Program.
Specifically, the Exchange proposes to specify the existing $100
session fee associated with the existing CE Programs (i.e., the S201,
S106 and S101 CE Programs) and a new $60 session fee associated with
the new S501 CE Program.\13\ The Exchange anticipates that other
exchanges requiring completion of the S501 CE Program will similarly
implement corresponding fees. As with existing CE Program session fees,
only one $60 session fee would be charged through CRD for a registered
person completing the S501 CE Program, even if such registered person's
firm was a member of multiple exchanges.
---------------------------------------------------------------------------
\13\ ``Session'' refers to a registered person sitting for the
actual computer-based CE training. FINRA administers the CE Programs
on behalf of the Exchange. OTP Holders and OTP Firms pay the related
fees directly to FINRA through CRD.
---------------------------------------------------------------------------
The Exchange has determined that the $60 session fee is necessary
to administer the S501 CE Program. Specifically, the $60 session fee
will be used to fund the S501 CE Program administered to persons
registered only as Proprietary Traders who are required to complete the
S501 CE Program. The $60 session fee is less than the existing $100
session fee currently charged by FINRA through CRD for the existing CE
Programs, including the S101 CE Program, because the fees associated
with the existing CE Programs are utilized for both development and
administration, whereas the $60 session fee for the S501 CE Program
would only be used for the administration of the program. The costs
associated with the development of the S501 CE Program are included in
the Series 56 Examination fee. The Exchange anticipates that the other
Participating SROs will adopt, or have adopted, the same $60 session
fee applicable to completion of the S501 CE Program.\14\
---------------------------------------------------------------------------
\14\ See, e.g., Securities Exchange Act Release No. 70064 (July
30, 2013), 78 FR 47469 (August 5, 2013) (SR-CBOE-2013-078).
---------------------------------------------------------------------------
Series 56 Examination Fees
The Exchange previously amended its rules to prescribe the Series
56 Examination as the qualifying examination for registered Proprietary
Traders.\15\ The Exchange hereby proposes to amend the Fee Schedule to
specify a fee of $195 per registered person that chooses to complete
the Series 56 Examination.
---------------------------------------------------------------------------
\15\ See supra note 12.
---------------------------------------------------------------------------
The Fee Schedule does not currently set forth the examination fees
for other qualification examinations required or accepted by the
Exchange because these programs are within FINRA's jurisdiction. The
Series 56 Examination, however, is a limited registration category that
is not recognized by FINRA under its registration rules. However, as
with existing non-FINRA examinations, FINRA administers the Series 56
Examination and collects the $195 fee through CRD on behalf of the SROs
that developed and maintain the exam. Additionally, only one $195 fee
would be charged through CRD for a registered person completing the
Series 56 Examination, even if such registered person's firm was a
member of multiple exchanges. The Exchange anticipates that the other
Participating SROs will adopt, or have adopted, the same $195 fee
applicable to completion of the Series 56 Examination.\16\
---------------------------------------------------------------------------
\16\ See, e.g., Securities Exchange Act Release No. 70163
(August 12, 2013), 78 FR 50120 (August 16, 2013) (SR-EDGA-2013-24).
---------------------------------------------------------------------------
The proposed change is not otherwise intended to address any other
issues relating to CE or related fees and the Exchange is not aware of
any problems that OTP Holders, OTP Firms or their registered persons
would have in complying with the proposed change.
2. Statutory Basis
The proposed rule change is consistent with Section 6(c) of the
Act,\17\ in general, and furthers the objectives of Section 6(c)(3) of
the Act,\18\ in particular, which authorizes the Exchange to prescribe
standards of training, experience and competence for registered persons
of OTP Holders and OTP Firms. The proposed rule change would specify
the existing CE requirements for registered persons of OTP Holders and
OTP Firms while also specifying the new S501 CE Program requirement for
registered Proprietary Traders of OTP Holders and OTP Firms. The
Exchange believes that the proposed rule change is reasonable and sets
forth the applicable CE requirements for individuals required to
register under Rule 2.23 and will therefore contribute to ensuring that
registered persons of OTP Holders and OTP Firms are properly trained.
In this regard, the Exchange believes that the S501 CE Program is the
appropriate CE Program for persons registered only as Proprietary
Traders because the S501 CE Program is specifically tailored toward
proprietary trading. Individuals who maintain any other registration
would be required to complete the CE Program associated with such other
registration, even if simultaneously registered as Proprietary Traders,
because such other CE Program would be more comprehensive and
correspond to the other, more comprehensive registration category. The
Exchange also believes that the proposed rule change is reasonable
because the other Participating SROs are anticipated to adopt, or have
adopted, rules requiring completion of the S501 CE Program for
registered Proprietary Traders.\19\
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78f(c).
\18\ 15 U.S.C. 78f(c)(3).
\19\ See supra note 10.
---------------------------------------------------------------------------
The Exchange also believes that the proposed rule change is
consistent with Section 6(b) of the Act,\20\ in general, and furthers
the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\21\ in
[[Page 62914]]
particular, because it provides for the equitable allocation of
reasonable dues, fees, and other charges among its members, issuers and
other persons using its facilities and does not unfairly discriminate
between customers, issuers, brokers or dealers. The Exchange believes
that the proposed $60 session fee is reasonable. While it is less than
the existing $100 session fee currently charged by FINRA through CRD
for the existing CE Programs, including the S101 CE Program, the fees
associated with the existing CE Programs are utilized for both
development and administration, whereas the $60 session fee for the
S501 CE Program would only be used for the administration of the
program. The costs associated with the development of the S501 CE
Program are included in the Series 56 Examination fee. The Exchange
also believes that the fee is reasonable because the other
Participating SROs are anticipated to adopt, or have adopted, the same
$60 session fee applicable to completion of the S501 CE Program.\22\
The Exchange also believes that the proposed rule change is reasonable
because it will specify the existing $100 session fee applicable to
registered persons of OTP Holders and OTP Firms who are subject to CE
requirements, which is collected by FINRA through CRD. Finally, the
Exchange believes that the proposed rule change is equitable and not
unfairly discriminatory because all registered persons of OTP Holders
and OTP Firms that are subject to CE requirements would be treated the
same, as is currently the case. Therefore, any registered person of an
OTP Holder or OTP Firm that is required to complete the S501 CE Program
would be subject to the corresponding $60 session fee.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78f(b).
\21\ 15 U.S.C. 78f(b)(4) and (5).
\22\ See supra note 14.
---------------------------------------------------------------------------
The Exchange believes that it is reasonable to include the Series
56 Examination fee within the Fee Schedule to make the cost of this
examination clear to OTP Holders and OTP Firms. The proposed fee is
reasonably designed to allow FINRA to cover its cost of administering
the Series 56 Examination on behalf of the Exchange. The Exchange
believes that the proposed $195 Series 56 Examination fee is also
reasonable because it is designed to reflect the costs of maintaining
and developing the Series 56 Examination, as well as the development of
the S501 CE Program, and to ensure that the examination's content is,
and continues to be, adequate for testing the competence and knowledge
generally applicable to proprietary trading. The Exchange also believes
that the fee is reasonable because the Exchange anticipates that the
other Participating SROs will adopt, or have adopted, the same $195 fee
applicable to completion of the Series 56 Examination.\23\ Finally, the
Exchange believes that the proposed rule change is equitable and not
unfairly discriminatory because all registered persons of ATP Holders
that wish to be registered as Proprietary Traders would be treated the
same, as is currently the case.
---------------------------------------------------------------------------
\23\ See supra note 16.
---------------------------------------------------------------------------
For these reasons, the Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\24\ 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. Specifically, the Exchange does not believe
that the proposed administrative changes (i.e., specifying the existing
CE Programs and related fees), the introduction of the S501 CE Program
and related fee, or the introduction of the Series 56 Examination fee
will affect intermarket competition because the Exchange anticipates
that the other Participating SROs will similarly adopt, or have
adopted, rules requiring completion of the S501 CE Program for
registered Proprietary Traders, the same $60 session fee applicable to
completion of the S501 CE Program and the same $195 fee applicable to
completion of the Series 56 Examination.\25\ In addition, the Exchange
does not believe that the proposed rule change will affect intramarket
competition because all similarly situated registered persons of OTP
Holders and OTP Firms, e.g., registered persons maintaining the same
categories of registration, are required to complete the same CE
Programs, the same qualification examinations, and are subject to the
same fees.
---------------------------------------------------------------------------
\24\ 15 U.S.C. 78f(b)(8).
\25\ See supra notes 12, 14 and 16.
---------------------------------------------------------------------------
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
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 \26\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\27\
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78s(b)(3)(a)(ii).
\27\ 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.
---------------------------------------------------------------------------
The Exchange has requested that the Commission waive the 30-day
operative delay. Waiver of the operative delay would allow the Exchange
to modify 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.\28\
---------------------------------------------------------------------------
\28\ 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
[[Page 62915]]
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2013-96 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-NYSEArca-2013-96. 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-NYSEArca-2013-96 and
should be submitted on or before November 12, 2013.
---------------------------------------------------------------------------
\29\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24552 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P
