[Federal Register Volume 77, Number 61 (Thursday, March 29, 2012)]
[Notices]
[Pages 19042-19044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7571]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66645; File No. SR-PHLX-2012-37]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC Relating
to the Proprietary Traders Qualification Examination (``Series 56'')
March 22, 2012.
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 March 21, 2012, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been
[[Page 19043]]
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
The Exchange is filing with the Securities and Exchange Commission
(``Commission'') the content outline and selection specifications for
the Proprietary Traders Qualification Examination (``Series 56'')
program. Phlx will implement the proposal upon notice to its
membership.
The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings,
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 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, Phlx filed a proposed rule change to recognize a new
category of limited representative registration for proprietary
traders.\3\ Specifically, Phlx 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, market making or effecting transactions
on behalf of a broker-dealer account.
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\3\ See Securities Exchange Act Release No. 66497 (March 1,
2012), 77 FR 13668 (March 7, 2012) (SR-Phlx-2012-23).
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The Exchange has been working with the Financial Industry
Regulatory Authority (``FINRA'') and certain other markets, 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
Phlx and the following: Boston Options Exchange; C2 Options Exchange,
Incorporated; Chicago Board Options Exchange, Incorporated; Chicago
Stock Exchange, Inc.; International Securities Exchange, LLC; The
NASDAQ Stock Market LLC; National Stock Exchange, Inc.; New York Stock
Exchange LLC; NYSE AMEX LLC; and NYSE ARCA, Inc. FINRA staff convened a
committee of industry representatives and staff of the various markets
to develop the criteria for the Series 56 examination program.
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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).
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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.\5\
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\5\ Proprietary trading firms don 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
markets intend to meet on a periodic basis to evaluate and, as
necessary, update the Series 56 examination program.
The Exchange understands that the other applicable markets will
also file with the Commission similar filings regarding the Series 56
examination program. The Exchange proposes to implement the Series 56
examination program upon availability in WebCRD, notification to its
membership and approval of SR-Phlx-2012-23.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \6\ in general, and furthers the objectives of Section
6(c)(3)(B) of the Act,\7\ 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 proprietary traders. This filing
provides the content outline and relevant specifications for the Series
56 examination program, which should help ensure that all associated
persons engaged in a securities business are, and will continue to be,
properly trained and qualified to perform their functions.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78(c)(3)(B).
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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
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 after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) \9\
thereunder.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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
[[Page 19044]]
public interest, for the protection of investors, or otherwise in
furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-PHLX-2012-37 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-PHLX-2012-37. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (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 offices of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-PHLX-2012-37, and should be
submitted on or before April 19, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-7571 Filed 3-28-12; 8:45 am]
BILLING CODE 8011-01-P