[Federal Register Volume 76, Number 155 (Thursday, August 11, 2011)]
[Notices]
[Pages 49809-49810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20370]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65040; File No. SR-NASDAQ-2011-108]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Proprietary Traders Qualification Examination (``Series
56'')
August 5, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on August 1, 2011, The NASDAQ Stock Market LLC (the ``Exchange''
or ``NASDAQ'') filed with the Securities and Exchange Commission
(``SEC'' or ``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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASDAQ is filing with the Commission the content outline and
selection specifications for the Proprietary Traders Qualification
Examination (``Series 56'') program.
NASDAQ will notify its membership when the examination becomes
available.
The text of the proposed rule change is available at http:/
nasdaq.cchwallstreet.com/, at NASDAQ'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
Recently, NASDAQ filed a proposed rule change to recognize a new
category of limited representative registration for proprietary
traders.\3\ Specifically, NASDAQ will recognize the new registration
category ``Proprietary Trader'' and the new examination, the Series 56.
The new Proprietary Trader category would be limited to persons engaged
solely in proprietary trading.
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\3\ See Securities Exchange Act Release No. 64958 (July 25,
2011) (SR-NASDAQ-2011-095). See also SR-NASDAQ-2011-107.
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NASDAQ has been working with the Financial Industry Regulatory
Authority (``FINRA'') and certain other exchanges, many of which have
recently enhanced their registration requirements to require the
registration of associated persons,\4\ to develop the content outline
and qualification examination that would be applicable to proprietary
traders. The Series 56 examination program is shared by NASDAQ and the
following self-regulatory organizations (``SROs''): Boston Options
Exchange; C2 Options Exchange, Incorporated; Chicago Board Options
Exchange, Incorporated; Chicago Stock Exchange, Incorporated;
International Securities Exchange, LLC; NASDAQ OMX BX, Inc.; NASDAQ OMX
PHLX LLC; National Stock Exchange, Incorporated; New York Stock
Exchange, LLC; NYSE AMEX, Incorporated; and NYSE ARCA, Incorporated.
Upon request by the SROs referenced above, FINRA staff convened a
committee of industry representatives, NASDAQ staff and staff from the
other SROs referenced above, to develop the criteria for the Series 56
examination program. This new qualification examination, the Series 56,
was recently filed with the Commission.\5\
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\4\ See, e.g., Securities Exchange Act Release Nos. 63843
(February 4, 2011), 76 FR 7884 (February 11, 2011) (SR-ISE-2010-
115); and 63314 (November 12, 2010), 75 FR 70957 (November 19, 2010)
(SR-CBOE-2010-084).
\5\ One exchange has thus far filed a proposed rule change
respecting the Series 56, which has become effective. See Securities
Exchange Act Release No. 64699 (June 17, 2011), 76 FR 36945 (June
23, 2011) (SR-CBOE-2011-056).
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The Series 56 examination tests a candidate's knowledge of
proprietary trading generally and the industry rules applicable to
trading of equity securities and listed options contracts. The Series
56 examination covers, among other things, recordkeeping and recording
requirements, types and characteristics of securities and investments,
trading practices and display execution and trading systems. While the
examination is primarily dedicated to topics related to proprietary
trading, the Series 56 examination also covers a few general concepts
relating to customers.\6\
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\6\ Proprietary trading firms do not have customers.
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The qualification examination consists of 100 multiple choice
questions. Candidates will have 150 minutes to complete the exam. The
content outline describes the following topical sections comprising the
examination: Personnel, Business Conduct and Recordkeeping and
Reporting Requirements, 9 questions; Markets, Market Participants,
Exchanges, and Self Regulatory Organizations, 8 questions; Types and
Characteristics of Securities and Investments, 20 questions; Trading
Practices and Prohibited Acts, 50 questions; and Display, Execution,
and Trading Systems, 13 questions. Representatives from the applicable
SROs intend to meet on a periodic basis to evaluate and, as necessary,
update, the Series 56 examination program.
NASDAQ understands that the other applicable SROs will also file
with the Commission similar filings regarding the Series 56 examination
program. NASDAQ proposes to implement the Series 56 examination program
upon availability in WebCRD and notification to its membership.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \7\ in general, and furthers the objectives of Section
6(c)(3)(B) of the Act,\8\ pursuant to which a national securities
exchange prescribes standards of training, experience and competence
for members and their associated persons, in particular, by offering a
new, qualification examination for
[[Page 49810]]
proprietary traders. This filing provides the content outline and
relevant specifications for the Series 56 examination program, which
NASDAQ believes establishes the appropriate qualifications for this new
registration category, because it tests the knowledge generally
applicable to proprietary trading.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78(c)(3)(B) [sic].
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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 not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6)
\10\ thereunder, the Exchange has designated this proposal as one that
effects a change that: (i) Does not significantly affect the protection
of investors or the public interest; (ii) does not impose any
significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest. Rule 19b-4(f)(6) \11\
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.
Under Rule 19b-4(f)(6) of the Act,\12\ a proposal does not become
operative for 30 days after the date of its filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest. The Exchange requests that the
Commission waive the 30 day operative period for this filing so that it
may become effective and operative upon filing with the Commission
pursuant to Section 19(b)(3)(A) \13\ of the Act and subparagraph (f)(6)
thereunder. The Exchange believes waiving the 30-day operative delay is
consistent with the protection of investors and the public as a waiver
will make the examination available as soon as possible to coincide
with availability on another exchange. For the reasons stated above,
the Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest and
designates the proposal as operative upon filing.\14\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ Id.
\12\ Id.
\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ For purposes only of waiving the operative delay of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f). See also 17 CFR 200.30-3(a)(59).
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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 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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-NASDAQ-2011-108 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-NASDAQ-2011-108. This
file number should be included on the subject line if e-mail 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. Copies of such filing also will be
available for inspection and copying at the principal office of NASDAQ.
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 publicly
available. All submissions should refer to File Number SR-NASDAQ-2011-
108 and should be submitted on or before September 1, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-20370 Filed 8-10-11; 8:45 am]
BILLING CODE 8011-01-P