[Federal Register Volume 79, Number 31 (Friday, February 14, 2014)]
[Notices]
[Pages 9022-9024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-03186]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71508; File No. SR-C2-2014-003]
Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to a Fee for Qualification Examination Waiver Requests
February 7, 2014.
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 February 3, 2014, C2 Options Exchange, Incorporated (the
``Exchange'' or ``C2'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III below, which Items have been prepared by the
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
C2 Options Exchange, Incorporated (the ``Exchange'' or ``C2'')
proposes to establish a fee for qualification examination waiver
requests. The text of the proposed rule change is available on the
Exchange's Web site (http://www.c2exchange.com/Legal/), at the
Exchange's Office of the Secretary, 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
C2 Rule 3.4, Interpretation and Policy .04, authorizes the
Exchange, in exceptional cases and where good cause is shown, to waive
qualification examinations and accept other standards as evidence of an
applicant's qualification for registration. This authority is to be
exercised in exceptional cases and where good cause is shown by the
applicant. The rule further states that advanced age or physical
infirmity, will not individually of themselves constitute sufficient
grounds to waive a qualification examination. Experience in fields
ancillary to the securities business may constitute sufficient grounds
to waive a qualification examination.
The Exchange has entered into a regulatory services agreement
(``RSA'') with the Financial Industry Regulatory Authority, Inc.
(``FINRA'') pursuant to which FINRA will process qualification
examination waiver requests on behalf of the Exchange (``Waiver
Requests'').\3\ Under the RSA, C2 Permit Holders and persons associated
with C2 Permit Holders seeking a waiver of a qualification examination
will submit a Waiver Request to FINRA.\4\ FINRA will process all Waiver
Requests submitted
[[Page 9023]]
by C2 Permit Holders and their associated persons, whether the Waiver
Request is for a FINRA examination or a non-FINRA examination (e.g.,
the Series 56 examination).
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\3\ CBOE Rule 15.9(b) (which applies to C2 and is incorporated
by reference into C2's rules) authorizes the Exchange to enter into
agreements with another self-regulatory organization to provide
regulatory services to the Exchange to assist the Exchange in
discharging its obligations under Section 6 and Section 19(g) of the
Securities Exchange Act of 1934.
\4\ Currently, Waiver Requests must be submitted to FINRA
through the FINRA Firm Gateway.
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FINRA will review each Waiver Request based on guidelines approved
by the Exchange and provide the Exchange with a recommendation
regarding the disposition of the Waiver Request. The Exchange will make
the final decision regarding whether or not to grant or deny a Waiver
Request.\5\ FINRA will maintain files and records made, collected or
otherwise created by FINRA in the course of performing services under
the RSA. Such files and records shall include, but not be limited to,
FINRA Waiver Request disposition recommendations and the basis for its
recommendations,\6\ C2 decisions and the basis for its decisions,\7\
and letters sent to requesting C2 Permit Holders communicating C2's
decisions.
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\5\ Notwithstanding the RSA, the Exchange shall retain ultimate
legal responsibility for, and control of, its self-regulatory
responsibilities.
\6\ The recommendation provided to C2 will include a detailed
explanation and justification as to whether to grant or deny the
Waiver Request, and in those cases where the recommendation is to
grant a waiver, the reasoning shall support why FINRA believes it is
an exceptional case and that good cause has been shown to warrant
the granting of the Waiver Request.
\7\ C2 will notify FINRA in writing of its final decision
regarding whether to grant or deny a Waiver Request, including any
additional information regarding such decision.
The Commission expects CBOE to document in writing its rationale
for any decision when CBOE determines not to follow FINRA's
recommendation.
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The Exchange will pay a fee to FINRA under the RSA for each Waiver
Request of a non-FINRA examination (e.g., the Series 56 examination)
processed by FINRA. The Exchange proposes to charge C2 Permit Holders a
fee of $200 for each Waiver Request of a non-FINRA examination
processed by FINRA. The proposed fee would help the Exchange recoup its
costs under the RSA.
The proposed fee would be effective on February 3, 2014.
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 Section
6(b)(4) of the Act,\9\ which requires that Exchange rules provide for
the equitable allocation of reasonable dues, fees, and other charges
among its Permit Holders and other persons using its facilities.
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 the
proposed fee is reasonable because it would help the Exchange recoup
its costs in engaging FINRA to process Waiver Requests of non-FINRA
examinations by C2 Permit Holders and their associated persons. The
Exchange believes the proposed fee is equitable and not unfairly
discriminatory because it would apply equally to all C2 Permit Holders
who submit Waiver Requests of non-FINRA examinations.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
\10\ Id. [sic].
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B. Self-Regulatory Organization's Statement on Burden on Competition
C2 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 does not believe
that the proposed fee will impose an unnecessary burden on intramarket
competition because it would apply equally to all C2 Permit Holders who
submit Waiver Requests of non-FINRA examinations. The Exchange does not
believe that the proposed fee will impose an unnecessary burden on
intermarket competition because the fee would only apply to C2 Permit
Holders.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and paragraph (f) of Rule 19b-4 \12\
thereunder. 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. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f).
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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-C2-2014-003 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 Number SR-C2-2014-003. 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
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-C2-2014-003 and should be
submitted on or before March 7, 2014.
[[Page 9024]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-03186 Filed 2-13-14; 8:45 am]
BILLING CODE 8011-01-P