80 FR 36388 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Series 4 Examination Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 121 (June 24, 2015)
Federal Register Volume 80, Issue 121 (June 24, 2015)
| Page Range | 36388-36391 | |
| FR Document | 2015-15454 |
[Federal Register Volume 80, Number 121 (Wednesday, June 24, 2015)] [Notices] [Pages 36388-36391] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-15454] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75246; File No. SR-FINRA-2015-018] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Series 4 Examination Program June 18, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'' or ``SEA'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on June 12, 2015, Financial Industry Regulatory Authority, Inc. (``FINRA'') 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 prepared by FINRA. FINRA has designated the proposed rule change as ``constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule'' under Section 19(b)(3)(A)(i) of the Act \3\ and Rule 19b-4(f)(1) thereunder,\4\ which renders the proposal effective upon receipt of this filing by the Commission. 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. \3\ 15 U.S.C. 78s(b)(3)(A)(i). \4\ 17 CFR 240.19b-4(f)(1). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change FINRA is filing revisions to the content outline and selection specifications for the Registered Options Principal (Series 4) examination program.\5\ The proposed revisions update the material to reflect changes to the laws, rules and regulations covered by the examination and to incorporate the functions and associated tasks currently performed by a Registered Options Principal. In addition, FINRA is proposing to make changes to the format of the content outline. FINRA is not proposing any textual changes to the By-Laws, Schedules to the By-Laws or Rules of FINRA. --------------------------------------------------------------------------- \5\ FINRA also is proposing corresponding revisions to the Series 4 question bank. Based on instruction from SEC staff, FINRA is submitting this filing for immediate effectiveness pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(1) thereunder, and is not filing the question bank for review. See Letter to Alden S. Adkins, Senior Vice President and General Counsel, NASD Regulation, from Belinda Blaine, Associate Director, Division of Market Regulation, SEC, dated July 24, 2000. The question bank is available for SEC review. --------------------------------------------------------------------------- The revised content outline is attached.\6\ The Series 4 selection specifications have been submitted to the Commission under separate cover with a request for confidential treatment pursuant to SEA Rule 24b-2.\7\ --------------------------------------------------------------------------- \6\ The Commission notes that the revised content outline is attached to the filing, not to this Notice. The content outline is available as part of the filing on FINRA's Web site. \7\ 17 CFR 240.24b-2. --------------------------------------------------------------------------- The text of the proposed rule change is available on FINRA's Web site at http://www.finra.org, at the principal office of FINRA 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, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any [[Page 36389]] comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA 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 Section 15A(g)(3) of the Act \8\ authorizes FINRA to prescribe standards of training, experience, and competence for persons associated with FINRA members. In accordance with that provision, FINRA has developed examinations that are designed to establish that persons associated with FINRA members have attained specified levels of competence and knowledge, consistent with applicable registration requirements under FINRA rules. FINRA periodically reviews the content of the examinations to determine whether revisions are necessary or appropriate in view of changes pertaining to the subject matter covered by the examinations. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78o-3(g)(3). --------------------------------------------------------------------------- NASD Rule 1022(f) requires members that engage in, or that intend to engage in transactions in options with the public to have at least one Registered Options Principal. Further, every person engaged in the supervision of options sales practices with the public, including a person designated pursuant to FINRA Rule 3110(a)(2) must be registered as a Registered Options Principal.\9\ A person registered solely as a Registered Options Principal is not qualified to function in a principal \10\ capacity with responsibility over any area of business activity that is not stated above. --------------------------------------------------------------------------- \9\ NASD Rule 1022(f) also includes additional requirements applicable to Registered Options Principals engaged in securities futures activities. The rule generally provides that prior to the introduction of an appropriate qualification examination that addresses security futures products, a Registered Options Principal is required to complete a firm-element continuing education program that addresses security futures products and a principal's responsibilities for security futures before such person can supervise security futures activities. \10\ The term principal is defined in NASD Rule 1021(b) (Definition of a Principal). --------------------------------------------------------------------------- A Registered Options Principal must, prior to or concurrent with such registration, be or become qualified pursuant to the NASD Rule 1030 Series, as either a General Securities Representative (Series 7) \11\ or a Corporate Securities Representative (Series 62) and an Options Representative (Series 42). --------------------------------------------------------------------------- \11\ Registration as a United Kingdom Securities Representative or Canada Securities Representative is an acceptable alternative prerequisite to the General Securities Representative prerequisite. --------------------------------------------------------------------------- In consultation with a committee of industry representatives, FINRA recently undertook a review of the Series 4 examination program. As a result of this review, FINRA is proposing to make revisions to the content outline to reflect changes to the laws, rules and regulations covered by the examination and to incorporate the functions and associated tasks currently performed by a Registered Options Principal. FINRA also is proposing to make changes to the format of the content outline. Current Content Outline The current content outline is divided into three sections. The following are the three sections and the number of questions associated with each of the sections, denoted Section 1 through Section 3: 1. Options Investment Strategies, 34 questions; 2. Supervision of Sales Activities and Trading Practices, 75 questions; and 3. Supervision of Employees, Business Conduct, and Recordkeeping and Reporting Requirements, 16 questions. Each section also includes the applicable laws, rules and regulations associated with that section. The current content outline also includes a preface (addressing, among other things, the purpose, administration and scoring of the examination), sample questions and reference materials. Proposed Revisions FINRA is proposing to divide the content outline into six major job functions that are performed by a Registered Options Principal. The following are the six major job functions, denoted Function 1 through Function 6, with the associated number of questions: Function 1: Supervise the Opening of New Options Accounts, 21 questions; Function 2: Supervise Options Account Activities, 25 questions; Function 3: Supervise General Options Trading, 30 questions; Function 4: Supervise Options Communications, 9 questions; Function 5: Implement Practices and Adhere to Regulatory Requirements, 12 questions; and Function 6: Supervise Associated Persons and Personnel Management Activities, 28 questions. FINRA is proposing to adjust the number of questions assigned to each major job function to ensure that the overall examination better reflects the key tasks performed by a Registered Options Principal. The questions on the revised Series 4 examination will place greater emphasis on key tasks such as supervision of registered persons, sales practices and compliance. Each function also includes specific tasks describing activities associated with performing that function. There are four tasks (1.1- 1.4) associated with Function 1; four tasks (2.1-2.4) associated with Function 2; four tasks (3.1-3.4) associated with Function 3; four tasks (4.1-4.4) associated with Function 4; two tasks (5.1-5.2) associated with Function 5; and four tasks (6.1-6.4) associated with Function 6.\12\ By way of example, one such task (Task 4.2) is review options retail communications and determine appropriate approval.\13\ Further, the content outline lists the knowledge required to perform each function and associated tasks (e.g., types of retail communications, required approvals).\14\ In addition, where applicable, the content outline lists the laws, rules and regulations a candidate is expected to know to perform each function and associated tasks. These include the applicable FINRA Rules (e.g., FINRA Rule 2220), NASD Rules (e.g., NASD Rule 2711(i)) and SEC rules (e.g., Rule 135a under the Securities Act of 1933).\15\ FINRA conducted a job analysis study of Registered Options Principals, which included the use of a survey, in developing each function and associated tasks and updating the required knowledge set forth in the revised content outline. The functions and associated tasks, which appear in the revised content outline for the first time, reflect the day-to-day activities of a Registered Options Principal. --------------------------------------------------------------------------- \12\ See Exhibit 3a, Outline Pages 6-22. See footnote 6 regarding availability of the content outline. \13\ See Exhibit 3a, Outline Page 15. \14\ See Exhibit 3a, Outline Page 15. \15\ See Exhibit 3a, Outline Page 15. --------------------------------------------------------------------------- As noted above, FINRA also is proposing to revise the content outline to reflect changes to the laws, rules and regulations covered by the examination. Among other revisions, FINRA is proposing to revise the content outline to reflect the adoption of rules in the consolidated FINRA rulebook (e.g., NASD Rule 2310 (Recommendations to Customers (Suitability)), NASD Rule 2212 (Telemarketing) and NASD Rule 3110 (Books and Records) were adopted as FINRA Rule 2111 (Suitability), FINRA Rule 3230 (Telemarketing) and [[Page 36390]] FINRA Rule 4510 Series (Books and Records Requirements), respectively).\16\ --------------------------------------------------------------------------- \16\ See Rule Conversion Chart, available at http://www.finra.org/industry/finra-rule-consolidation. --------------------------------------------------------------------------- FINRA is proposing similar changes to the Series 4 selection specifications and question bank. Finally, FINRA is proposing to make changes to the format of the content outline, including the preface, sample questions and reference materials. Among other changes, FINRA is proposing to: (1) Add a table of contents; \17\ (2) provide more details regarding the purpose of the examination; \18\ (3) provide more details on the application procedures; \19\ (4) provide more details on the development and maintenance of the content outline and examination; \20\ (5) explain that the passing scores are established by FINRA staff, in consultation with a committee of industry representatives, using a standard setting procedure, and that a statistical adjustment process known as equating is used in scoring exams; \21\ and (6) note that each candidate will receive a score report at the end of the test session, which will indicate a pass or fail status and include a score profile listing the candidate's performance on each major content area covered on the examination.\22\ --------------------------------------------------------------------------- \17\ See Exhibit 3a, Outline Page 2. \18\ See Exhibit 3a, Outline Page 3. \19\ See Exhibit 3a, Outline Page 3. \20\ See Exhibit 3a, Outline Page 4. \21\ See Exhibit 3a, Outline Page 5. \22\ See Exhibit 3a, Outline Page 5. --------------------------------------------------------------------------- The number of questions on the Series 4 examination will remain at 125 multiple-choice questions,\23\ and candidates will have 195 minutes to complete the examination. The test time will change from 180 minutes to 195 minutes because pretest items increased from 5 items to 10 items. Currently, a score of 70 percent is required to pass the examination. The passing score will change to 72 percent with the revised Series 4 examination program. --------------------------------------------------------------------------- \23\ Consistent with FINRA's practice of including ``pretest'' items on certain qualification examinations, which is designed to ensure that new examination items meet acceptable testing standards prior to use for scoring purposes, the examination includes 10 additional, unidentified pretest items that do not contribute towards the candidate's score. Therefore, the examination actually consists of 135 items, 125 of which are scored. The 10 pretest items are randomly distributed throughout the examination. --------------------------------------------------------------------------- Availability of Content Outline The current Series 4 content outline is available on FINRA's Web site, at www.finra.org/brokerqualifications/exams. The revised Series 4 content outline will replace the current content outline on FINRA's Web site. FINRA is filing the proposed rule change for immediate effectiveness. FINRA proposes to implement the revised Series 4 examination program on September 28, 2015. FINRA will announce the proposed rule change and the implementation date in a Regulatory Notice. 2. Statutory Basis FINRA believes that the proposed revisions to the Series 4 examination program are consistent with the provisions of Section 15A(b)(6) of the Act,\24\ which requires, among other things, that FINRA rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest, and Section 15A(g)(3) of the Act,\25\ which authorizes FINRA to prescribe standards of training, experience, and competence for persons associated with FINRA members. FINRA believes that the proposed revisions will further these purposes by updating the examination program to reflect changes to the laws, rules and regulations covered by the examination and to incorporate the functions and associated tasks currently performed by a Registered Options Principal. --------------------------------------------------------------------------- \24\ 15 U.S.C. 78o-3(b)(6). \25\ 15 U.S.C. 78o-3(g)(3). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The updated examination aligns with the functions and associated tasks currently performed by a Registered Options Principal and tests knowledge of the most current laws, rules, regulations and skills relevant to those functions and associated tasks. As such, the proposed revisions would make the examination more efficient and effective. 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 The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \26\ and paragraph (f)(1) of Rule 19b-4 thereunder.\27\ 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 shall institute proceedings to determine whether the proposed rule should be approved or disapproved. --------------------------------------------------------------------------- \26\ 15 U.S.C. 78s(b)(3)(A). \27\ 17 CFR 240.19b-4(f)(1). --------------------------------------------------------------------------- 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 CommentsUse 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-FINRA-2015-018 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-FINRA-2015-018. 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 [[Page 36391]] 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 FINRA. 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-FINRA-2015-018, and should be submitted on or before July 15, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\28\ --------------------------------------------------------------------------- \28\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-15454 Filed 6-23-15; 8:45 am] BILLING CODE 8011-01-P
![36388 Federal Register / Vol. 80, No. 121 / Wednesday, June 24, 2015 / Notices
opportunity to make an oral Internet Web site (http://www.sec.gov/ has designated the proposed rule change
presentation.32 rules/sro.shtml). Copies of the as ‘‘constituting a stated policy,
Interested persons are invited to submission, all subsequent practice, or interpretation with respect
submit written data, views, and amendments, all written statements to the meaning, administration, or
arguments regarding whether the with respect to the proposed rule enforcement of an existing rule’’ under
proposal should be approved or change that are filed with the Section 19(b)(3)(A)(i) of the Act 3 and
disapproved by July 15, 2015. Any Commission, and all written Rule 19b–4(f)(1) thereunder,4 which
person who wishes to file a rebuttal to communications relating to the renders the proposal effective upon
any other person’s submission must file proposed rule change between the receipt of this filing by the Commission.
that rebuttal by July 29, 2015. In light of Commission and any person, other than The Commission is publishing this
the concerns raised by the proposed rule those that may be withheld from the notice to solicit comments on the
change, as discussed above, the public in accordance with the proposed rule change from interested
Commission invites additional comment provisions of 5 U.S.C. 552, will be persons.
on the proposed rule change as the available for Web site viewing and
I. Self-Regulatory Organization’s
Commission continues its analysis of printing in the Commission’s Public
Statement of the Terms of the Substance
the proposed rule change’s consistency Reference Room, 100 F Street NE.,
of the Proposed Rule Change
with sections 6(b)(5) and 6(b)(8),33 or Washington, DC 20549 on official
any other provision of the Act, or the business days between the hours of FINRA is filing revisions to the
rules and regulations thereunder. The 10:00 a.m. and 3:00 p.m. Copies of the content outline and selection
Commission asks that commenters filing also will be available for specifications for the Registered Options
address the sufficiency and merit of the inspection and copying at the principal Principal (Series 4) examination
Exchange’s statements in support of the office of the Exchange. All comments program.5 The proposed revisions
proposed rule change, in addition to any received will be posted without change; update the material to reflect changes to
other comments they may wish to the Commission does not edit personal the laws, rules and regulations covered
submit about the proposed rule change. identifying information from by the examination and to incorporate
In particular, the Commission invites submissions. You should submit only the functions and associated tasks
comment on the following: information that you wish to make currently performed by a Registered
1. What are commenters’ views on available publicly. All submissions Options Principal. In addition, FINRA is
how CBOE’s proposal could impact the should refer to File Number SR–CBOE– proposing to make changes to the format
quality of the Auctions, internalization 2015–026 and should be submitted by of the content outline. FINRA is not
rates, liquidity, and competition, within July 15, 2015. Rebuttal comments proposing any textual changes to the By-
or outside of the Auctions? should be submitted by July 29, 2015. Laws, Schedules to the By-Laws or
2. What are commenters’ views on the For the Commission, by the Division of Rules of FINRA.
potential impact of CBOE’s proposal on Trading and Markets, pursuant to delegated The revised content outline is
the quoting behavior of Market-Makers? authority.34 attached.6 The Series 4 selection
Comments may be submitted by any Brent J. Fields, specifications have been submitted to
of the following methods: Secretary. the Commission under separate cover
with a request for confidential treatment
Electronic Comments [FR Doc. 2015–15453 Filed 6–23–15; 8:45 am]
pursuant to SEA Rule 24b–2.7
• Use the Commission’s Internet BILLING CODE 8011–01–P
The text of the proposed rule change
comment form (http://www.sec.gov/ is available on FINRA’s Web site at
rules/sro.shtml); or SECURITIES AND EXCHANGE http://www.finra.org, at the principal
• Send an email to rule-comments@ office of FINRA and at the
COMMISSION
sec.gov. Please include File Number SR– Commission’s Public Reference Room.
CBOE–2015–026 on the subject line. [Release No. 34–75246; File No. SR–FINRA–
2015–018] II. Self-Regulatory Organization’s
Paper Comments Statement of the Purpose of, and
• Send paper comments in triplicate Self-Regulatory Organizations; Statutory Basis for, the Proposed Rule
to Secretary, Securities and Exchange Financial Industry Regulatory Change
Commission, 100 F Street NE., Authority, Inc.; Notice of Filing and In its filing with the Commission,
Washington, DC 20549–1090. Immediate Effectiveness of a Proposed FINRA included statements concerning
All submissions should refer to File Rule Change Relating to the Series 4 the purpose of and basis for the
Number SR–CBOE–2015–026. This file Examination Program proposed rule change and discussed any
number should be included on the June 18, 2015.
subject line if email is used. To help the Pursuant to Section 19(b)(1) of the
3 15 U.S.C. 78s(b)(3)(A)(i).
Commission process and review your Securities Exchange Act of 1934 (‘‘Act’’
4 17 CFR 240.19b–4(f)(1).
5 FINRA also is proposing corresponding
comments more efficiently, please use or ‘‘SEA’’) 1 and Rule 19b–4 revisions to the Series 4 question bank. Based on
only one method. The Commission will thereunder,2 notice is hereby given that instruction from SEC staff, FINRA is submitting this
post all comments on the Commission’s on June 12, 2015, Financial Industry filing for immediate effectiveness pursuant to
Regulatory Authority, Inc. (‘‘FINRA’’) Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(1)
32 Section 19(b)(2) of the Act, as amended by the thereunder, and is not filing the question bank for
Securities Act Amendments of 1975, Pub. L. 94–29
filed with the Securities and Exchange review. See Letter to Alden S. Adkins, Senior Vice
(June 4, 1975), grants to the Commission flexibility Commission (‘‘SEC’’ or ‘‘Commission’’) President and General Counsel, NASD Regulation,
tkelley on DSK3SPTVN1PROD with NOTICES
to determine what type of proceeding—either oral the proposed rule change as described from Belinda Blaine, Associate Director, Division of
or notice and opportunity for written comments— in Items I, II, and III below, which Items Market Regulation, SEC, dated July 24, 2000. The
is appropriate for consideration of a particular question bank is available for SEC review.
proposal by a self-regulatory organization. See
have been prepared by FINRA. FINRA 6 The Commission notes that the revised content
Securities Act Amendments of 1975, Senate Comm. outline is attached to the filing, not to this Notice.
34 17 CFR 200.30–3(a)(57).
on Banking, Housing & Urban Affairs, S. Rep. No. The content outline is available as part of the filing
75, 94th Cong., 1st Sess. 30 (1975). 1 15 U.S.C. 78s(b)(1). on FINRA’s Web site.
33 15 U.S.C. 78f(b)(5), (b)(8). 2 17 CFR 240.19b–4. 7 17 CFR 240.24b–2.
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![Federal Register / Vol. 80, No. 121 / Wednesday, June 24, 2015 / Notices 36391
Reference Room, 100 F Street NE., I. Self-Regulatory Organization’s be offered by all of the Exchange’s
Washington, DC 20549 on official Statement of the Terms of Substance of affiliated equity exchanges but that the
business days between the hours of 10 the Proposed Rule Change fees are also appropriately set forth on
a.m. and 3 p.m. Copies of such filing The Exchange filed a proposal to the fee schedule of BATS Options
also will be available for inspection and amend its fees and rebates applicable to because BATS Connect will be offered
copying at the principal offices of Members 5 of the Exchange pursuant to to all Exchange Members, including
FINRA. All comments received will be Rule 15.1(a) and (c) (‘‘Fee Schedule’’) to Members that participate primarily or
posted without change; the Commission adopt fees applicable to Members of the exclusively on BATS Options.
Exchange’s equity options platform BATS Connect is offered by the
does not edit personal identifying
(‘‘BATS Options’’) for the use of a Exchange on a voluntary basis in a
information from submissions. You
communication and routing service capacity similar to a vendor. In sum,
should submit only information that BATS Connect is a communication
you wish to make available publicly. All known as BATS Connect. Changes to
the fee schedule pursuant to this service that provides subscribers an
submissions should refer to File additional means to receive market data
Number SR–FINRA–2015–018, and proposal are effective upon filing.
The text of the proposed rule change from and route orders to any destination
should be submitted on or before July connected to the Exchange’s network.
is available at the Exchange’s Web site
15, 2015. BATS Connect does not provide any
at www.batstrading.com, at the
For the Commission, by the Division of principal office of the Exchange, and at advantage to subscribers for connecting
Trading and Markets, pursuant to delegated the Commission’s Public Reference to the Exchange’s affiliates 8 as
authority.28 Room. compared to other method of
Brent J. Fields, connectivity available to subscribers.
II. Self-Regulatory Organization’s The servers of the subscriber need not
Secretary. Statement of the Purpose of, and be located in the same facilities as the
[FR Doc. 2015–15454 Filed 6–23–15; 8:45 am] Statutory Basis for, the Proposed Rule Exchange in order to subscribe to BATS
BILLING CODE 8011–01–P Change Connect. Subscribers may also seek to
In its filing with the Commission, the utilize BATS Connect in the event of a
Exchange included statements market disruption where other
SECURITIES AND EXCHANGE concerning the purpose of and basis for alternative connection methods become
COMMISSION the proposed rule change and discussed unavailable.
any comments it received on the The Exchange will charge a monthly
[Release No. 34–75243; File No. SR–BATS– proposed rule change. The text of these connectivity fee to subscribers utilizing
2015–45] statements may be examined at the BATS Connect to route orders to other
places specified in Item IV below. The exchanges and broker-dealers that are
Self-Regulatory Organizations; BATS Exchange has prepared summaries, set connected to the Exchange’s network.
Exchange, Inc.; Notice of Filing and forth in Sections A, B, and C below, of The amount of the connectivity fee
Immediate Effectiveness of a Proposed the most significant parts of such varies based solely on the bandwidth
Rule Change Related to Fees for Use statements. selected by the subscriber. Specifically,
of BATS Exchange, Inc. the Exchange proposes to charge $350
A. Self-Regulatory Organization’s for 1 Mb, $700 for 5 Mb, $950 for 10 Mb,
June 18, 2015. Statement of the Purpose of, and $1,500 for 25 Mb, $2,500 for 50 Mb, and
Statutory Basis for, the Proposed Rule $3,500 for 100 Mb.
Pursuant to Section 19(b)(1) of the Change BATS Connect would also allow
Securities Exchange Act of 1934 (the
1. Purpose subscribers to receive market data feeds
‘‘Act’’),1 and Rule 19b–4 thereunder,2 from the exchanges connected to the
notice is hereby given that on June 9, The Exchange proposes to adopt fees Exchange’s network. In such case, the
2015, BATS Exchange, Inc. (the applicable to Members of BATS Options subscriber would pay the Exchange a
‘‘Exchange’’ or ‘‘BATS’’) filed with the for the use of a communication and connectivity fee, which varies and is
Securities and Exchange Commission routing service known as BATS based solely on the amount of
(‘‘Commission’’) the proposed rule Connect. bandwidth required to transmit the
change as described in Items I, II and III On May 26 [sic], 2015, the Exchange selected data product to the subscriber.
below, which Items have been prepared filed a proposed rule change with the The proposed connectivity fees are set
by the Exchange. The Exchange has Commission to adopt a communication forth in the Exhibit 5 attached hereto
designated the proposed rule change as and routing service known as BATS and range from no charge to $11,500
one establishing or changing a member Connect.6 The Exchange now proposes based on the market data product the
due, fee, or other charge imposed by the to adopt fees related to the use of BATS subscriber selects.
Exchange under Section 19(b)(3)(A)(ii) Connect that are equal to the fees The Exchange also proposes to adopt
charged for an identical service, also a discounted fee of $4,160 per month for
of the Act 3 and Rule 19b–4(f)(2)
called BATS Connect, offered by the subscribers who purchase connectivity
thereunder,4 which renders the
Exchange’s affiliate, EDGX.7 The to a bundle of select market data
proposed rule change effective upon
Exchange notes that BATS Connect will products. The following market data
filing with the Commission. The
Commission is publishing this notice to 5 A Member is defined as ‘‘any registered broker
8 The Exchange’s affiliated exchanges are EDGX,
solicit comments on the proposed rule or dealer that has been admitted to membership in EDGA Exchange, Inc. (‘‘EDGA’’), and BATS Y-
tkelley on DSK3SPTVN1PROD with NOTICES
change from interested persons. the Exchange.’’ See Exchange Rule 1.5(n). Exchange, Inc. (‘‘BYX’’). The Exchange understands
6 See file no. SR–BATS–2015–40.
that its affiliated exchanges intend to file identical
7 See the EDGX fee schedule available at http:// proposed rule changes to adopt the fees for the
28 17 CFR 200.30–3(a)(12).
1 15
batstrading.com/support/fee_schedule/edgx/. See BATS Connect service with the Commission. The
U.S.C. 78s(b)(1). also Securities Exchange Act Release No. 73780 Exchange also notes that its affiliated exchanges
2 17 CFR 240.19b–4.
(December 8, 2014), 79 FR 73942 (December 12, have also filed proposed rule changes with the
3 15 U.S.C. 78s(b)(3)(A)(ii).
2014) (SR–EDGX–2014–28) and file no. SR–EDGX– Commission to adopt rules describing the BATS
4 17 CFR 240.19b–4(f)(2). 2015–27. Connect service.
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Document Created: 2015-12-15 14:09:10
Document Modified: 2015-12-15 14:09:10
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 80 FR 36388 |
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