Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Rules Relating to Categories of Registration and Respective Qualification Examinations Required for Members That Engage in Trading Activities on the Exchange, 47654-47657 [2018-20438]

Download as PDF 47654 Federal Register / Vol. 83, No. 183 / Thursday, September 20, 2018 / Notices number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–C2–2018–020 and should be submitted on or before October 11, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–20431 Filed 9–19–18; 8:45 am] BILLING CODE 8011–01–P For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Eduardo A. Aleman, Assistant Secretary. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84123; File No. SR– NYSEArca–2018–43] [FR Doc. 2018–20437 Filed 9–19–18; 8:45 am] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change Regarding Investments of the First Trust TCW Unconstrained Plus Bond ETF amozie on DSK3GDR082PROD with NOTICES1 of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to modify investments of the First Trust TCW Unconstrained Plus Bond ETF, the shares of which are currently listed and traded on the Exchange pursuant to NYSE Arca Rule 8.600–E. The proposed rule change was published for comment in the Federal Register on August 1, 2018.3 The Commission has received no comment letters on the proposed rule change. Section 19(b)(2) of the Act 4 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding, or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day after publication of the notice for this proposed rule change is September 15, 2018. The Commission is extending this 45-day time period. The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,5 designates October 30, 2018 as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR–NYSEArca–2018–43). BILLING CODE 8011–01–P September 14, 2018. On July 11, 2018, NYSE Arca, Inc. (‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act 16 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:01 Sep 19, 2018 Jkt 244001 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 83720 (July 26, 2018), 83 FR 37560. 4 15 U.S.C. 78s(b)(2). 5 Id. 6 17 CFR 200.30–3(a)(31). 2 17 PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84140; File No. SR– CboeEDGA–2018–015] Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Rules Relating to Categories of Registration and Respective Qualification Examinations Required for Members That Engage in Trading Activities on the Exchange September 14, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 7, 2018, Cboe EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to amend its rules relating to categories of registration and respective qualification examinations required for Members that engage in trading activities on the Exchange. The text of the proposed rule change is available at the Exchange’s website at www.markets.cboe.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 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 parts of such statements. 1 15 2 17 E:\FR\FM\20SEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 20SEN1 Federal Register / Vol. 83, No. 183 / Thursday, September 20, 2018 / Notices amozie on DSK3GDR082PROD with NOTICES1 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The SEC recently approved a proposed rule change to restructure the FINRA representative-level qualification examination program.3 The rule change, which will become effective on October 1, 2018, restructures the examination program into a more efficient format whereby all new representative-level applicants will be required to take a general knowledge examination (the Securities Industry Essentials Examination (‘‘SIE’’)) and a tailored, specialized knowledge examination (a revised representative-level qualification examination) for their particular registered role. Individuals are not required to be associated with an Exchange or any other self-regulatory organization (‘‘SRO’’) member to be eligible to take the SIE. However, passing the SIE alone will not qualify an individual for registration with the Exchange. To be eligible for registration, an individual must also be associated with a firm, pass an appropriate qualification examination for a representative or principal and satisfy the other requirements relating to the registration process. The SIE would assess basic product knowledge; the structure and function of the securities industry markets, regulatory agencies and their functions; and regulated and prohibited practices. In particular, the SIE will cover four major areas. The first, ‘‘Knowledge of Capital Markets,’’ focuses on topics such as types of markets and offerings, broker-dealers and depositories, and economic cycles. The second, ‘‘Understanding Products and Their Risks,’’ covers securities products at a high level as well as associated investment risks. The third, ‘‘Understanding Trading, Customer Accounts and Prohibited Activities,’’ focuses on accounts, orders, settlement and prohibited activities. The final area, ‘‘Overview of the Regulatory Framework,’’ encompasses topics such as SROs, registration requirements and specified conduct rules. It’s anticipated that the SIE would include 75 scored questions plus an additional 10 unscored pretest questions. The passing score would be determined through methodologies compliant with testing industry standards used to develop examinations and set passing standards. 3 See Securities Exchange Act Release No. 81098 (July 7, 2017), 82 FR 32419 (July 13, 2017) (Order Approving File No. SR–FINRA–2017–007). VerDate Sep<11>2014 18:01 Sep 19, 2018 Jkt 244001 The restructured program eliminates duplicative testing of general securities knowledge on the current representative-level qualification examinations by moving such content into the SIE. The SIE will test fundamental securities related knowledge, including knowledge of basic products, the structure and function of the securities industry, the regulatory agencies and their functions and regulated and prohibited practices, whereas the revised representative-level qualification examinations will test knowledge relevant to day-to-day activities, responsibilities and job functions of representatives. The SIE was developed in consultation with a committee of industry representatives and representatives of several other SROs. Each of the current representative-level examinations covers general securities knowledge, with the exception of the Research Analyst (Series 86 and 87) examinations. The Exchange proposes to require that effective October 1, 2018, new applicants seeking to register in a representative capacity with the Exchange must pass the SIE examination [sic] before their registrations can become effective. The Exchange proposes to make the requirement operative on October 1, 2018 to coincide with the effective date of FINRA’s requirement. The Exchange notes that individuals who are registered as of October 1, 2018 are eligible to maintain their registrations without being subject to any additional requirements. Individuals who had been registered within the past two years prior to October 1, 2018, would also be eligible to maintain those registrations without being subject to any additional requirements, provided they register within two years from the date of their last registration. However, with respect to an individual who is not registered on the effective date of the proposed rule change but was registered within the past two years prior to the effective date of the proposed rule change, the individual’s SIE status in the CRD system would be administratively terminated if such individual does not register with the Exchange within four years from the date of the individual’s last registration. The Exchange also notes that consistent with Interpretation and Policy .01(b) of Rule 2.5, the Exchange will consider waivers of the SIE alone or the SIE and the representative or principal-level examination(s) for Members who are PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 47655 seeking registration in a representativeor principal-level registration category.4 Lastly, the Exchange proposes to eliminate references in its rules to alternative foreign examination modules, along with specific references to the Series 17, 37 and 38 examinations. Particularly, the Exchange notes that FINRA recently announced it was eliminating the United Kingdom Securities Representative and the Canadian Securities Representative registration categories, along with the respective associated exams (i.e., Series 17, Series 37 and Series 38).5 FINRA also stated that it intended to provide individuals who are associated persons of firms and who hold foreign registrations an alternative, more flexible, process to obtain an Exchange representative-level registration.6 The Exchange believes that there is sufficient overlap between the SIE and foreign qualification requirements to permit them to act as exemptions to the SIE. As such, the Exchange proposes to provide that individuals who are in good standing as representatives with the Financial Conduct Authority in the United Kingdom or with a Canadian stock exchange or securities regulator would be exempt from the requirement to pass the SIE, and thus would be required only to pass a specialized knowledge examination to register with the Exchange as a representative. The proposed approach would provide individuals with a United Kingdom or Canadian qualification more flexibility to obtain an Exchange representativelevel registration. The Exchange notes that FINRA has adopted a similar rule.7 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.8 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 9 requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable 4 Pursuant to a Regulatory Services Agreement between FINRA and the Exchange, FINRA provides the Exchange certain exam waiver services in responding to exam waiver requests from Exchange Members. 5 See Securities Exchange Act Release No. 81098 (July 7, 2017), 82 FR 32419 (July 13, 2017) (Order Approving File No. SR–FINRA–2017–007). 6 Id. 7 Id. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). E:\FR\FM\20SEN1.SGM 20SEN1 47656 Federal Register / Vol. 83, No. 183 / Thursday, September 20, 2018 / Notices amozie on DSK3GDR082PROD with NOTICES1 principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 10 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange believes that the proposed rule change will improve the efficiency of the Exchange’s examination requirements, without compromising the qualification standards, by eliminating duplicative testing of general securities knowledge on examinations. FINRA has indicated that the SIE was developed in an effort to adopt an examination that would assess basic product knowledge; the structure and function of the securities industry markets, regulatory agencies and their functions; and regulated and prohibited practices. The Exchange also notes that the introduction of the SIE and expansion of the pool of individuals who are eligible to take the SIE, has the potential of enhancing the pool of prospective securities industry professionals by introducing them to securities laws, rules and regulations and appropriate conduct before they join the industry in a registered capacity. Lastly, the Exchange notes adopting the SIE requirement is consistent with the requirement recently adopted by FINRA.11 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed rule change, which harmonizes its rules with recent rule changes adopted by FINRA and which is being filed in conjunction with similar filings by the other national securities exchanges, will reduce the regulatory burden placed on market participants engaged in trading activities across different markets. The Exchange believes that the harmonization of these registration requirements across the various markets 10 Id. 11 See Securities Exchange Act Release No. 81098 (July 7, 2017), 82 FR 32419 (July 13, 2017) (Order Approving File No. SR–FINRA–2017–007). VerDate Sep<11>2014 18:01 Sep 19, 2018 Jkt 244001 will reduce burdens on competition by removing impediments to participation in the national market system and promoting competition among participants across the multiple national securities exchanges. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on 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) of the Act 12 and Rule 19b– 4(f)(6) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative for 30 days from the date of filing. However, Rule 19b– 4(f)(6)(iii) 13 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative on October 1, 2018 to coincide with the effective date of FINRA’s proposed rule change on which the proposal is based.14 The waiver of the operative delay would make the Exchange’s qualification requirements consistent with those of FINRA at the same time that FINRA does. Therefore, the Commission believes that the waiver of the 30-day operative delay is consistent with the protection of investors and the public interest and hereby waives the 30-day operative delay and designates the proposal operative on October 1, 2018.15 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the 12 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). 14 See supra note 5. 15 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 13 17 PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal 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 No. SR– CboeEDGA–2018–015 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File No. SR–CboeEDGA–2018–015. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–CboeEDGA–2018–015 and should E:\FR\FM\20SEN1.SGM 20SEN1 Federal Register / Vol. 83, No. 183 / Thursday, September 20, 2018 / Notices be submitted on or before October 11, 2018. FOR FURTHER INFORMATION CONTACT: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–20438 Filed 9–19–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 33228; File No. 812–14875] Rochelle Kauffman Plesset, Senior Counsel, at (202) 551–6840, or Nadya B. Roytblat, Assistant Chief Counsel, at (202) 551–6825 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission’s website by searching for the file number, or applicant using the Company name box, at https:// www.sec.gov/search/search.htm or by calling (202) 551–8090. Applicant’s Representations 1. Formed in 1995, Applicant is a Delaware corporation that is in the September 14, 2018. business of developing, clinical testing, AGENCY: Securities and Exchange marketing and commercializing cancer Commission (‘‘Commission’’). and pre-cancer screening and diagnostic ACTION: Notice. tests. Applicant currently manufactures Notice of application for an order a non-invasive, patient-friendly under Section 3(b)(2) of the Investment screening test called Cologuard and Company Act of 1940 (‘‘Act’’). provides it to patients on a prescriptionApplicant: Exact Sciences only basis through its clinical Corporation. laboratory. Applicant is also currently Summary of Application: Applicant working on the development of seeks an order under Section 3(b)(2) of additional tests for other types of the Act declaring it to be primarily cancers. engaged in a business other than that of 2. Applicant states that companies in investing, reinvesting, owning, holding the heathcare sector such as itself or trading in securities. Applicant is in generally need significant liquid capital the business of producing and to finance their operations and meet developing screening and diagnostic high production, commercialization and tests for the early detection and regulatory costs. Such companies often prevention of certain cancers. spend a significant proportion of their Filing Dates: The application was revenues on research and development filed on January 30, 2018 and amended (‘‘R&D’’) in order to bring a product to on June 1, 2018, July 6, 2018 and August market and to bring products through 24, 2018. the Food and Drug Administration’s Hearing or Notification of Hearing: An (‘‘FDA’’) approval process. order granting the requested relief will 3. Applicant states that it currently be issued unless the Commission orders depends on raised capital to finance a hearing. Interested persons may operations and continued growth but request a hearing by writing to the ultimately seeks to generate cash from Commission’s Secretary and serving its operations to support its business. applicant with a copy of the request, Applicant states that it has successfully personally or by mail. Hearing requests raised capital to finance its operations should be received by the Commission and commercialization of Cologuard in by 5:30 p.m. on October 10, 2018 and large part through various public should be accompanied by proof of offerings of its debt and equity service on Applicant, in the form of an securities. Applicant seeks to preserve affidavit or, for lawyers, a certificate of its capital and maintain liquidity, service. Hearing requests should state pending the use of such capital to the nature of the writer’s interest, the support its business operations, by reason for the request, and the issues investing in short-term investment grade contested. Persons who wish to be and liquid fixed income and money notified of a hearing may request market instruments that earn notification by writing to the competitive market returns and provide Commission’s Secretary. a low level of credit risk (‘‘Capital Preservation Investments’’). Applicant ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street NE, also, to a limited extent, makes strategic investments in companies that are Washington, DC 20549–1090. complementary to its core business. Applicant, 441 Charmany Drive, Applicant’s board of directors oversees Madison, Wisconsin 53719. Applicant’s investment practices and 16 17 CFR 200.30–3(a)(12). defines the parameters for investment amozie on DSK3GDR082PROD with NOTICES1 Exact Sciences Corporation VerDate Sep<11>2014 18:01 Sep 19, 2018 Jkt 244001 PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 47657 activities. Applicant does not invest in securities for short-term speculative purposes. Applicant’s Legal Analysis 1. Applicant seeks an order under Section 3(b)(2) of the Act declaring that it is primarily engaged in a business other than that of investing, reinvesting, owning, holding or trading in securities and therefore is not an investment company as defined in the Act. 2. Section 3(a)(l)(A) of the Act defines the term ‘‘investment company’’ to include an issuer that is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Section 3(a)(l)(C) of the Act further defines an investment company as an issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities, and owns or proposes to acquire investment securities having a value in excess of 40% of the value of the issuer’s total assets (exclusive of Government securities and cash items) on an unconsolidated basis. Section 3(a)(2) of the Act defines ‘‘investment securities’’ to include all securities except Government securities, securities issued by employees’ securities companies, and securities issued by majority-owned subsidiaries of the owner which (a) are not investment companies and (b) are not relying on the exclusions from the definition of investment company in Section 3(c)(1) or Section 3(c)(7) of the Act. While Applicant states that it does not hold itself out as being engaged primarily in the business of investing, reinvesting or trading in securities, Applicant states that it consistently holds investment securities that exceed 40% of its total assets on an unconsolidated basis (exclusive of Government securities and cash items). Applicant states that it therefore falls within the definition of investment company under Section 3(a)(l)(C) of the Act. 3. Rule 3a–8 under the Act provides an exclusion from the definition of investment company if, among other factors, a company’s R&D expenses are a substantial percentage of its total expenses for the last four fiscal quarters combined. While Applicant believes that it complies with the conditions of Rule 3a–8, Applicant is concerned that its R&D expenses, while substantial in absolute terms, may not be substantial as a ratio of overall expenses, particularly given the expense increase in connection with the commercialization of Cologuard. Applicant’s R&D expenses as a ratio of E:\FR\FM\20SEN1.SGM 20SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 83, Number 183 (Thursday, September 20, 2018)]
[Notices]
[Pages 47654-47657]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20438]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84140; File No. SR-CboeEDGA-2018-015]


Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Its Rules Relating to Categories of Registration and Respective 
Qualification Examinations Required for Members That Engage in Trading 
Activities on the Exchange

September 14, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 7, 2018, Cboe EDGA Exchange, Inc. (the ``Exchange'' 
or ``EDGA'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange is proposing to amend its rules relating to categories 
of registration and respective qualification examinations required for 
Members that engage in trading activities on the Exchange.
    The text of the proposed rule change is available at the Exchange's 
website at www.markets.cboe.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 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 parts of such 
statements.

[[Page 47655]]

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

1. Purpose
    The SEC recently approved a proposed rule change to restructure the 
FINRA representative-level qualification examination program.\3\ The 
rule change, which will become effective on October 1, 2018, 
restructures the examination program into a more efficient format 
whereby all new representative-level applicants will be required to 
take a general knowledge examination (the Securities Industry 
Essentials Examination (``SIE'')) and a tailored, specialized knowledge 
examination (a revised representative-level qualification examination) 
for their particular registered role. Individuals are not required to 
be associated with an Exchange or any other self-regulatory 
organization (``SRO'') member to be eligible to take the SIE. However, 
passing the SIE alone will not qualify an individual for registration 
with the Exchange. To be eligible for registration, an individual must 
also be associated with a firm, pass an appropriate qualification 
examination for a representative or principal and satisfy the other 
requirements relating to the registration process.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 81098 (July 7, 
2017), 82 FR 32419 (July 13, 2017) (Order Approving File No. SR-
FINRA-2017-007).
---------------------------------------------------------------------------

    The SIE would assess basic product knowledge; the structure and 
function of the securities industry markets, regulatory agencies and 
their functions; and regulated and prohibited practices. In particular, 
the SIE will cover four major areas. The first, ``Knowledge of Capital 
Markets,'' focuses on topics such as types of markets and offerings, 
broker-dealers and depositories, and economic cycles. The second, 
``Understanding Products and Their Risks,'' covers securities products 
at a high level as well as associated investment risks. The third, 
``Understanding Trading, Customer Accounts and Prohibited Activities,'' 
focuses on accounts, orders, settlement and prohibited activities. The 
final area, ``Overview of the Regulatory Framework,'' encompasses 
topics such as SROs, registration requirements and specified conduct 
rules. It's anticipated that the SIE would include 75 scored questions 
plus an additional 10 unscored pretest questions. The passing score 
would be determined through methodologies compliant with testing 
industry standards used to develop examinations and set passing 
standards.
    The restructured program eliminates duplicative testing of general 
securities knowledge on the current representative-level qualification 
examinations by moving such content into the SIE. The SIE will test 
fundamental securities related knowledge, including knowledge of basic 
products, the structure and function of the securities industry, the 
regulatory agencies and their functions and regulated and prohibited 
practices, whereas the revised representative-level qualification 
examinations will test knowledge relevant to day-to-day activities, 
responsibilities and job functions of representatives. The SIE was 
developed in consultation with a committee of industry representatives 
and representatives of several other SROs. Each of the current 
representative-level examinations covers general securities knowledge, 
with the exception of the Research Analyst (Series 86 and 87) 
examinations.
    The Exchange proposes to require that effective October 1, 2018, 
new applicants seeking to register in a representative capacity with 
the Exchange must pass the SIE examination [sic] before their 
registrations can become effective. The Exchange proposes to make the 
requirement operative on October 1, 2018 to coincide with the effective 
date of FINRA's requirement.
    The Exchange notes that individuals who are registered as of 
October 1, 2018 are eligible to maintain their registrations without 
being subject to any additional requirements. Individuals who had been 
registered within the past two years prior to October 1, 2018, would 
also be eligible to maintain those registrations without being subject 
to any additional requirements, provided they register within two years 
from the date of their last registration. However, with respect to an 
individual who is not registered on the effective date of the proposed 
rule change but was registered within the past two years prior to the 
effective date of the proposed rule change, the individual's SIE status 
in the CRD system would be administratively terminated if such 
individual does not register with the Exchange within four years from 
the date of the individual's last registration. The Exchange also notes 
that consistent with Interpretation and Policy .01(b) of Rule 2.5, the 
Exchange will consider waivers of the SIE alone or the SIE and the 
representative or principal-level examination(s) for Members who are 
seeking registration in a representative- or principal-level 
registration category.\4\
---------------------------------------------------------------------------

    \4\ Pursuant to a Regulatory Services Agreement between FINRA 
and the Exchange, FINRA provides the Exchange certain exam waiver 
services in responding to exam waiver requests from Exchange 
Members.
---------------------------------------------------------------------------

    Lastly, the Exchange proposes to eliminate references in its rules 
to alternative foreign examination modules, along with specific 
references to the Series 17, 37 and 38 examinations. Particularly, the 
Exchange notes that FINRA recently announced it was eliminating the 
United Kingdom Securities Representative and the Canadian Securities 
Representative registration categories, along with the respective 
associated exams (i.e., Series 17, Series 37 and Series 38).\5\ FINRA 
also stated that it intended to provide individuals who are associated 
persons of firms and who hold foreign registrations an alternative, 
more flexible, process to obtain an Exchange representative-level 
registration.\6\ The Exchange believes that there is sufficient overlap 
between the SIE and foreign qualification requirements to permit them 
to act as exemptions to the SIE. As such, the Exchange proposes to 
provide that individuals who are in good standing as representatives 
with the Financial Conduct Authority in the United Kingdom or with a 
Canadian stock exchange or securities regulator would be exempt from 
the requirement to pass the SIE, and thus would be required only to 
pass a specialized knowledge examination to register with the Exchange 
as a representative. The proposed approach would provide individuals 
with a United Kingdom or Canadian qualification more flexibility to 
obtain an Exchange representative-level registration. The Exchange 
notes that FINRA has adopted a similar rule.\7\
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    \5\ See Securities Exchange Act Release No. 81098 (July 7, 
2017), 82 FR 32419 (July 13, 2017) (Order Approving File No. SR-
FINRA-2017-007).
    \6\ Id.
    \7\ Id.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable

[[Page 47656]]

principles of trade, to foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest. Additionally, the Exchange 
believes the proposed rule change is consistent with the Section 
6(b)(5) \10\ requirement that the rules of an exchange not be designed 
to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
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    The Exchange believes that the proposed rule change will improve 
the efficiency of the Exchange's examination requirements, without 
compromising the qualification standards, by eliminating duplicative 
testing of general securities knowledge on examinations. FINRA has 
indicated that the SIE was developed in an effort to adopt an 
examination that would assess basic product knowledge; the structure 
and function of the securities industry markets, regulatory agencies 
and their functions; and regulated and prohibited practices. The 
Exchange also notes that the introduction of the SIE and expansion of 
the pool of individuals who are eligible to take the SIE, has the 
potential of enhancing the pool of prospective securities industry 
professionals by introducing them to securities laws, rules and 
regulations and appropriate conduct before they join the industry in a 
registered capacity. Lastly, the Exchange notes adopting the SIE 
requirement is consistent with the requirement recently adopted by 
FINRA.\11\
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    \11\ See Securities Exchange Act Release No. 81098 (July 7, 
2017), 82 FR 32419 (July 13, 2017) (Order Approving File No. SR-
FINRA-2017-007).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes that 
the proposed rule change, which harmonizes its rules with recent rule 
changes adopted by FINRA and which is being filed in conjunction with 
similar filings by the other national securities exchanges, will reduce 
the regulatory burden placed on market participants engaged in trading 
activities across different markets. The Exchange believes that the 
harmonization of these registration requirements across the various 
markets will reduce burdens on competition by removing impediments to 
participation in the national market system and promoting competition 
among participants across the multiple national securities exchanges.

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

    The Exchange has neither solicited nor received written comments on 
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) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days from the date of filing. However, Rule 
19b-4(f)(6)(iii) \13\ permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. The Exchange has asked the Commission to waive the 
30-day operative delay so that the proposal may become operative on 
October 1, 2018 to coincide with the effective date of FINRA's proposed 
rule change on which the proposal is based.\14\ The waiver of the 
operative delay would make the Exchange's qualification requirements 
consistent with those of FINRA at the same time that FINRA does. 
Therefore, the Commission believes that the waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest and hereby waives the 30-day operative delay and 
designates the proposal operative on October 1, 2018.\15\
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    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ See supra note 5.
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal is 
consistent with the Act. Comments may be submitted by any of the 
following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File No. SR-CboeEDGA-2018-015 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File No. SR-CboeEDGA-2018-015. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of such filing will also be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File No. SR-CboeEDGA-2018-015 and should

[[Page 47657]]

be submitted on or before October 11, 2018.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-20438 Filed 9-19-18; 8:45 am]
 BILLING CODE 8011-01-P

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