Self-Regulatory Organizations: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by MIAX PEARL, LLC To Amend Exchange Rule 203, Qualification and Registration of Members and Associated Persons, Relating to Registration and Qualification Examinations Required for Members and Associated Persons of Members That Engage in Trading Activities on the Exchange, 51518-51520 [2018-22045]
Download as PDF
<![CDATA[
51518
Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–22043 Filed 10–10–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84362; File No. SR–
PEARL–2018–20]
Self-Regulatory Organizations: Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change by MIAX
PEARL, LLC To Amend Exchange Rule
203, Qualification and Registration of
Members and Associated Persons,
Relating to Registration and
Qualification Examinations Required
for Members and Associated Persons
of Members That Engage in Trading
Activities on the Exchange
October 4, 2018.
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on September 27, 2018, MIAX PEARL,
LLC (‘‘MIAX PEARL’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change ’’) a 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.
khammond on DSK30JT082PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend Rule 203, Qualification and
Registration of Members and Associated
Persons, relating to registration and
qualification examinations required for
Members and Associated Persons of
Members that engage in trading
activities on the Exchange.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal
office, and at the Commission’s Public
Reference Room.
21 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
20:54 Oct 10, 2018
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Securities and Exchange
Commission (the ‘‘SEC’’ or the
‘‘Commission’’) recently approved a
proposed rule change to restructure the
Financial Industry Regulatory Authority
(‘‘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 representativelevel qualification examination) for their
particular registered role. Individuals
are not required to be associated with
the Exchange or any other selfregulatory 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 will 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
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).
1 15
VerDate Sep<11>2014
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
Jkt 247001
PO 00000
Frm 00084
Fmt 4703
Sfmt 4703
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,
‘‘Overview of the Regulatory
Framework,’’ encompasses topics such
as SROs, registration requirements and
specified conduct rules. It is anticipated
that the SIE will include 75 scored
questions plus an additional 10
unscored pretest questions. The passing
score will be determined through
methodologies compliant with testing
industry standards used to develop
examinations and set passing standards.
The restructured program will
eliminate 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 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 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
will be eligible to maintain their
registrations without being subject to
any additional requirements.
Individuals who have been registered
within the last two years prior to
October 1, 2018, will 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
E:\FR\FM\11OCN1.SGM
11OCN1
Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices
on the effective date of the proposed
rule change but was registered within
the last two years prior to the effective
date of the proposed rule change, the
individual’s SIE status in the Central
Registration Depository (‘‘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 Rule 203 Interpretations and
Policies .05, the Exchange will consider
waivers of the SIE alone or the SIE and
the representative or principal-level
examination(s) for applicants who are
seeking registration in a representativeor principal-level registration category.4
The Exchange also proposes to add
Interpretations and Policies .09 to Rule
203 ‘‘Summary of Qualifications
Requirements’’ which summarizes the
qualification requirements for each of
the required registration categories
described in the Exchange Rules.
The Exchange notes that this filing is
substantially similar to a companion
Miami International Securities
Exchange, LLC (‘‘MIAX Options’’) filing
relating to registration and qualification
examinations required for Members and
Associated Persons of Members that
engage in trading activities on the MIAX
Options Exchange.
khammond on DSK30JT082PROD with NOTICES
2. Statutory Basis
The Exchange believes that its
proposed rule change is consistent with
Section 6(b) of the Act 5 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 6 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments to and perfect the
mechanisms 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) 7 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
4 Pursuant to a Regulatory Services Agreement
between FINRA and MIAX PEARL, FINRA provides
MIAX PEARL certain exam waiver services in
responding to exam waiver requests from MIAX
PEARL Members.
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(5).
7 Id.
VerDate Sep<11>2014
20:54 Oct 10, 2018
Jkt 247001
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.8
Furthermore, the Exchange believes
that adding Interpretations and Policies
.09 to Rule 203 will provide greater
clarity regarding the Exchange’s
examination requirements as updated
by, and those remaining in effect
following, the proposed rule change,
and consistency with the rules of other
exchanges.9
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.
8 See
supra note 3.
e.g. Cboe Exchange, Inc. Rule 3.6A
Interpretations and Policies .08(b) and Nasdaq ISE,
LLC Rule 313 Registration Requirements
Supplementary Material .08 (b).
9 See
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
51519
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 10 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) 11 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.12 The waiver of the operative
delay would make the Exchange’s
qualification requirements consistent
with those of FINRA, as of October 1,
2018. 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, 2018.13
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii).
12 See supra note 3.
13 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).
11 17
E:\FR\FM\11OCN1.SGM
11OCN1
51520
Federal Register / Vol. 83, No. 197 / Thursday, October 11, 2018 / Notices
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
PEARL–2018–20 on the subject line.
Paper Comments
khammond on DSK30JT082PROD with NOTICES
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File
Number SR–PEARL–2018–20. 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 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 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–
PEARL–2018–20 and should be
submitted on or before November 1,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–22045 Filed 10–10–18; 8:45 am]
BILLING CODE 8011–01–P
14 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
20:54 Oct 10, 2018
Jkt 247001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84369]
Securities Exchange Act of 1934
October 4, 2018.
In the Matter of the NYSE Arca, Inc.;
Order Scheduling Filing of Statements
on Review for an Order of Disapproval
of Proposed Rule Change To List and
Trade the Shares of the ProShares
Bitcoin ETF and the ProShares Short
Bitcoin ETF (File No. SR–NYSEArca–
2017–139).
On December 4, 2017, NYSE Arca Inc.
(‘‘NYSE Arca’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
(‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
list and trade shares of the ProShares
Bitcoin ETF and the ProShares Short
Bitcoin ETF issued by the ProShares
Trust II under NYSE Arca Rule 8.200–
E, Commentary .02. The proposed rule
change was published for comment in
the Federal Register on December 26,
2017.3
On January 30, 2018, pursuant to
Section 19(b)(2) of the Exchange Act,4
the Commission designated a longer
period within which to approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether to
approve or disapprove the proposed
rule change.5 On March 23, 2018, the
Commission instituted proceedings
under Section 19(b)(2)(B) of the
Exchange Act 6 to determine whether to
approve or disapprove the proposed
rule change.7 On June 15, 2018, the
Commission extended the period for
consideration of the proposed rule
change to August 23, 2018.8
On August 22, 2018, the Division of
Trading and Markets, pursuant to
delegated authority,9 issued an order
disapproving the proposed rule
change.10 On August 23, 2018, the
Secretary of the Commission notified
NYSEArca that, pursuant to
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 82350
(Dec. 19, 2017), 82 FR 61100 (Dec. 26, 2017).
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 82602
(Jan. 30, 2018), 83 FR 4941 (Feb. 2, 2018).
6 15 U.S.C. 78s(b)(2)(B).
7 See Securities Exchange Act Release No. 82939
(Mar. 23, 2018), 83 FR 13537 (Mar. 29, 2018).
8 See Securities Exchange Act Release No. 83452
(June 15, 2018), 83 FR 28894 (June 21, 2018).
9 17 CFR 200.30–3(a)(12).
10 See Securities Exchange Act Release No. 83904
(Aug. 22, 2018), 83 FR 43934 (Aug. 28, 2018) (SR–
NYSEArca-2017–139) (‘‘Disapproval Order’’).
2 17
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
Commission Rule of Practice 431,11 the
Commission would review the
Division’s action pursuant to delegated
authority and that the Division’s action
pursuant to delegated authority had
been automatically stayed.12
Accordingly, it is ordered, pursuant to
Commission Rule of Practice 431, that
by November 5, 2018, any party or other
person may file a statement in support
of, or in opposition to, the action made
pursuant to delegated authority.
It is further ordered that the order
disapproving proposed rule change SR–
NYSEArca–2017–139 shall remain in
effect pending the Commission’s review.
By the Commission.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–22094 Filed 10–10–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Securities Exchange Act of 1934; Release
No. 34–84368/October 4, 2018]
In the Matter of the Cboe BZX
Exchange, Inc.; For an Order of
Disapproval of Proposed Rule Change
To List and Trade the Shares of the
GraniteShares Bitcoin ETF and the
GraniteShares Short Bitcoin ETF (File
No. SR–CboeBZX–2018–001); Order
Scheduling Filing of Statements on
Review
On January 5, 2018, Cboe BZX
Exchange, Inc. (‘‘BZX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to list and trade shares of the
GraniteShares Bitcoin ETF and the
GraniteShares Short Bitcoin ETF issued
by the GraniteShares ETP Trust under
BZX Rule 14.11(f)(4).3 The proposed
rule change was published for comment
in the Federal Register on January 18,
2018.4
On February 22, 2018, pursuant to
Section 19(b)(2) of the Exchange Act,
the Commission designated a longer
11 See
17 CFR 201.431(c).
Letter from Secretary of the Commission to
David De Gregorio, Senior Counsel, NYSE Group,
Inc. (Aug. 23, 2018), available at https://
www.sec.gov/rules/sro/nysearca/2018/34-83904letter-from-secretary.pdf.
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 On August 21, 2018, BZX filed Amendment No.
1 to the proposal, and on August 22, 2018, BZX
filed Amendment No. 2 to the proposal.
4 See Securities Exchange Act Release No. 82484
(Jan. 11, 2018), 83 FR 2704 (Jan. 18, 2018).
12 See
E:\FR\FM\11OCN1.SGM
11OCN1
]]>Agencies
[Federal Register Volume 83, Number 197 (Thursday, October 11, 2018)]
[Notices]
[Pages 51518-51520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22045]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84362; File No. SR-PEARL-2018-20]
Self-Regulatory Organizations: Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change by MIAX PEARL, LLC To Amend
Exchange Rule 203, Qualification and Registration of Members and
Associated Persons, Relating to Registration and Qualification
Examinations Required for Members and Associated Persons of Members
That Engage in Trading Activities on the Exchange
October 4, 2018.
Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on September 27, 2018, MIAX PEARL, LLC (``MIAX
PEARL'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change '') a 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 filing a proposal to amend Rule 203, Qualification
and Registration of Members and Associated Persons, relating to
registration and qualification examinations required for Members and
Associated Persons of Members that engage in trading activities on the
Exchange.
The text of the proposed rule change is available on the Exchange's
website at https://www.miaxoptions.com/rule-filings/pearl at MIAX
PEARL's principal office, 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 aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Securities and Exchange Commission (the ``SEC'' or the
``Commission'') recently approved a proposed rule change to restructure
the Financial Industry Regulatory Authority (``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 the
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 will 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, ``Overview of the Regulatory Framework,'' encompasses topics
such as SROs, registration requirements and specified conduct rules. It
is anticipated that the SIE will include 75 scored questions plus an
additional 10 unscored pretest questions. The passing score will be
determined through methodologies compliant with testing industry
standards used to develop examinations and set passing standards.
The restructured program will eliminate 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 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 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 will be eligible to maintain their registrations
without being subject to any additional requirements. Individuals who
have been registered within the last two years prior to October 1,
2018, will 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
[[Page 51519]]
on the effective date of the proposed rule change but was registered
within the last two years prior to the effective date of the proposed
rule change, the individual's SIE status in the Central Registration
Depository (``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 Rule 203 Interpretations and Policies .05,
the Exchange will consider waivers of the SIE alone or the SIE and the
representative or principal-level examination(s) for applicants who are
seeking registration in a representative-or principal-level
registration category.\4\
---------------------------------------------------------------------------
\4\ Pursuant to a Regulatory Services Agreement between FINRA
and MIAX PEARL, FINRA provides MIAX PEARL certain exam waiver
services in responding to exam waiver requests from MIAX PEARL
Members.
---------------------------------------------------------------------------
The Exchange also proposes to add Interpretations and Policies .09
to Rule 203 ``Summary of Qualifications Requirements'' which summarizes
the qualification requirements for each of the required registration
categories described in the Exchange Rules.
The Exchange notes that this filing is substantially similar to a
companion Miami International Securities Exchange, LLC (``MIAX
Options'') filing relating to registration and qualification
examinations required for Members and Associated Persons of Members
that engage in trading activities on the MIAX Options Exchange.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act \5\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \6\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to and perfect the
mechanisms 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) \7\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ Id.
---------------------------------------------------------------------------
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.\8\
---------------------------------------------------------------------------
\8\ See supra note 3.
---------------------------------------------------------------------------
Furthermore, the Exchange believes that adding Interpretations and
Policies .09 to Rule 203 will provide greater clarity regarding the
Exchange's examination requirements as updated by, and those remaining
in effect following, the proposed rule change, and consistency with the
rules of other exchanges.\9\
---------------------------------------------------------------------------
\9\ See e.g. Cboe Exchange, Inc. Rule 3.6A Interpretations and
Policies .08(b) and Nasdaq ISE, LLC Rule 313 Registration
Requirements Supplementary Material .08 (b).
---------------------------------------------------------------------------
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
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.
---------------------------------------------------------------------------
\10\ 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) \11\ 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.\12\ The waiver of the
operative delay would make the Exchange's qualification requirements
consistent with those of FINRA, as of October 1, 2018. 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.\13\
---------------------------------------------------------------------------
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ See supra note 3.
\13\ 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).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
[[Page 51520]]
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-PEARL-2018-20 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-PEARL-2018-20. 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 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 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-PEARL-2018-20 and should be submitted on or before
November 1, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-22045 Filed 10-10-18; 8:45 am]
BILLING CODE 8011-01-P
