80 FR 81390 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend BOX Rule 2020 (Participant Eligibility and Registration) To Replace the Limited Representative-Proprietary Trader and Limited Principal-Proprietary Trader Registration Categories and Establish the Securities Trader and Securities Trader Principal Registration Categories
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 249 (December 29, 2015)
Federal Register Volume 80, Issue 249 (December 29, 2015)
| Page Range | 81390-81393 | |
| FR Document | 2015-32648 |
[Federal Register Volume 80, Number 249 (Tuesday, December 29, 2015)] [Notices] [Pages 81390-81393] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-32648] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76732; File No. SR-BOX-2015-38] Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend BOX Rule 2020 (Participant Eligibility and Registration) To Replace the Limited Representative--Proprietary Trader and Limited Principal--Proprietary Trader Registration Categories and Establish the Securities Trader and Securities Trader Principal Registration Categories December 22, 2015. Pursuant to 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 December 14, 2015, BOX Options Exchange LLC (the ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, of which Items I and II have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule 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 proposes to amend BOX Rule 2020 (Participant Eligibility and Registration) to replace the Limited [[Page 81391]] Representative--Proprietary Trader and Limited Principal--Proprietary Trader registration categories and establish the Securities Trader and Securities Trader Principal registration categories. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission's Public Reference Room and also on the Exchange's Internet Web site at http://boxexchange.com. 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 self-regulatory organization 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 self-regulatory organization 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 Exchange proposes to amend BOX Rule 2020 (Participant Eligibility and Registration) to replace the Limited Representative-- Proprietary Trader and Limited Principal--Proprietary Trader registration categories and establish the Securities Trader and Securities Trader Principal registration categories. The Exchange is also amending its rules to establish the Series 57 examination as the appropriate qualification examination for Securities Traders and eliminating the reference to the S501 continuing education program currently applicable to Proprietary Traders.\3\ This filing is, in all material respects, based upon SR-FINRA-2015-017, which was recently approved by the Securities and Exchange Commission (``SEC'' or ``Commission'').\4\ --------------------------------------------------------------------------- \3\ Currently, in order to supervise, representatives must first pass the appropriate underlying qualification examination which is either the Series 7 qualification examination which would allow a representative to register as a General Securities Representative on BOX or the Series 56 qualification examination which would allow a representative to register as a Limited Representative--Proprietary Trader on BOX. In addition to passing the Series 7 or Series 56, representatives must also pass the Series 24 qualification examination and register as a General Securities Principal if they are registered as a General Securities Representative or as a Limited Principal--Proprietary Trader if they are registered as a Limited Representative--Proprietary Trader. After January 4, 2016, the Series 57 qualification examination would replace the Series 56 qualification examination as the appropriate underlying qualification examination for a representative to take prior to taking the Series 24 qualification examination so that the Representative may supervise proprietary trading on BOX. Representatives would then register as a [sic] Securities Trader Principal in order to supervise proprietary trading on BOX. \4\ See Securities Exchange Act Release No. 75783 (August 28, 2015), 80 FR 41119 (July 14, 2015) [sic] (Order Approving a Proposed Rule Change to Establish the Securities Trader and Securities Trader Principal Registration Categories) (SR-FINRA-2015-017). --------------------------------------------------------------------------- a. Securities Trader Registration Category BOX currently uses the Series 56 qualification examination for the Limited Representative--Proprietary Trader registration category referenced in BOX Rule 2020(b)(2).\5\ However, BOX allows representatives who have passed the Series 7 qualification examination and who are registered as a [sic] General Securities Representative on BOX to conduct proprietary trading without having to take the Series 56 qualification examination and register as a Limited Representative-- Proprietary Trader. For representatives who are new to the industry or have not yet taken a qualification examination, BOX requires the representatives engaged in proprietary trading to take a qualification examination, either the Series 7 or the Series 56, and then register as a General Securities Representative or a Proprietary Trader on BOX. After the implementation of the Series 57 examination on or after January 4, 2016, BOX will no longer allow representatives with a General Securities Representative registration to engage in proprietary trading on BOX.\6\ Representatives who are not grandfathered prior to the implementation of the Series 57 qualification examination or who are new to the industry after implementation of the Series 57; [sic] and are engaged in proprietary trading will be required to take the Series 57 qualification examination and register as a Securities Trader on BOX. --------------------------------------------------------------------------- \5\ See BOX Rule 2020(b)(2). \6\ BOX will grandfather in anyone registered with Limited Representative--Proprietary Trader registration prior to January 4, 2016 with the new Securities Trader registration category in FINRA's Central Registration Depository (``Web CRD'') System. --------------------------------------------------------------------------- BOX notes that the proposed rule change does not impose any additional examination burdens on persons who are already registered on BOX. A person registered as a Limited Representative--Proprietary Trader and Limited Principal--Proprietary Trader on the effective date of the proposed rule change will be grandfathered in as a Securities Trader or Securities Trader Principal, respectively, without having to take additional examinations or any other actions. In addition, individuals who were registered as either a Limited Representative-- Proprietary Trader or Limited Principal--Proprietary Trader prior to the effective date of the proposed rule change will be eligible to register as a Securities Trader or Securities Trader Principal without having to take any additional examinations, provided no more than two years have passed between the date they were last registered as a representative and the date they register as a Securities Trader or Securities Trader Principal. On January 22, 2015, FINRA entered into a Termination Agreement with the national securities exchanges that set forth the terms and conditions that will govern the winding down of the Series 56 examination in advance of its replacement by the Series 57 examination and the integration of the S501 Program into the S101 Regulatory Element Continuing Education Program. The Series 57 qualification examination will be recognized by FINRA and the other national securities exchanges on January 4, 2016. FINRA has developed the Series 57 qualification examination and has filed the qualification examination with the Commission as part of a separate proposed rule change.\7\ According to FINRA, while the Series 57 examination will include the core knowledge portion of the Series 7 examination, the Series 57 examination will also be based on the current job functions of securities traders and include elements of the Series 55 and Series 56 examination programs. In addition, FINRA has filed a separate proposed rule change to establish the fee for the Series 57 examination.\8\ --------------------------------------------------------------------------- \7\ See Securities Exchange Act Release No. 76188 (October 19, 2015), 80 FR 64456 (October 23, 2015) (SR-FINRA-2015-042). \8\ See Securities Exchange Act Release No. 76391 (November 9, 2015), 80 FR 70862 (November 16, 2015) (SR-FINRA-2015-044). BOX will also file a separate rule filing in December 2015 to amend Section VI (Regulatory Fees) of its Fee Schedule to remove Part C (Registration and Continuing Education Fees) associated with Series 56 qualification examination and the S501 continuing education. --------------------------------------------------------------------------- b. Securities Trader Principal Registration Category BOX current registration rules require a person seeking to register as a Limited Principal--Proprietary Trader to have passed the underlying qualification examination Series 56 and be registered pursuant to Exchange Rules as a Limited Representative--Proprietary Trader, and [[Page 81392]] have passed the Series 24 qualification examination.\9\ BOX proposes to amend its rule text to replace Limited Principal--Proprietary Trader registration category with a Securities Trader Principal registration category in addition to replacing the Series 56 underlying qualification examination with the Series 57 underlying qualification examination. The Exchange also proposes to add a statement to clarify that a person registered as a General Securities Principal under 2020(c)(1) above shall not be qualified to function in a Principal capacity with responsibility over any area of business activity described in Rule 2020(c)(2). --------------------------------------------------------------------------- \9\ See BOX Rule 2020(c)(2)(i)(A-C). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),\10\ in general, and Section 6(b)(5) of the Act,\11\ 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 mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. In particular, BOX believes that the proposed rule change will streamline, and bring consistency and uniformity to, the qualification and registration requirements for individuals engaged in securities trading activities across different markets and for principals responsible for supervising such activities, which will, in turn, improve registration and compliance efforts. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f(b). \11\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition BOX 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. BOX's proposed rule change to replace the Limited Representative-- Proprietary Trader registration category and qualification examination Series 56 with the Securities Trader registration category and Series 57 qualification examination will reduce the burden on associated persons currently required to be registered as proprietary traders by harmonizing the registration requirements for representatives engaged in securities trading activities across different markets. Under the proposed rule change, associated persons would be eligible to engage in securities trading activities by registering as Securities Traders and passing a single comprehensive Securities Trader qualification examination which is consistent with the other national securities exchanges. BOX believes that the proposed rule change relating to Securities Trader Principals will harmonize the registration and qualification requirements for principals that supervise securities trading activities across different markets. Further, the proposed rule change does not impose any additional examination burdens on persons who are already registered. There is no obligation to take the proposed Series 57 examination in order to continue in their present duties, so the proposed rule change is not expected to disadvantage current registered persons relative to new entrants in this regard. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action (a) This proposed rule change is filed pursuant to paragraph (A) of section 19(b)(3) of the Exchange Act \12\ and Rule 19b-4(f)(6) thereunder.\13\ --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- (b) This proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, 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. The Exchange has requested that the Commission waive the 30-day operative delay period for ``non- controversial'' proposals and make the proposed rule change effective and operative upon filing \14\ because the proposal is related to the industry wide replacement of the proprietary trader registration categories and Series 56 qualification examination with the Securities Trader registration category and Series 57 qualification examination, which will become effective on January 4, 2015 [sic]. --------------------------------------------------------------------------- \14\ As required under Rule 19b-4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change along with a brief description and the text of 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 Commission believes that waiving the thirty-day operative delay is consistent with the protection of investors and the public interest, because waiving the operative delay will enable BOX to have registration and qualification requirements that are consistent with those of the other national securities exchanges and FINRA. Therefore, the Commission hereby waives the thirty-day operative delay and designates the proposal operative as of January 4, 2016.\15\ --------------------------------------------------------------------------- \15\ For purposes of waiving the 30-day operative delay, the Commission has 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. 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File Number SR-BOX-2015-38 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-BOX-2015-38. 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 [[Page 81393]] 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, on official business days between the hours of 10:00 a.m. and 3:00 p.m., located at 100 F Street NE., Washington, DC 20549. Copies of such 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-BOX-2015-38 and should be submitted on or before January 19, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ Brent J. Fields, Secretary. --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2015-32648 Filed 12-28-15; 8:45 am] BILLING CODE 8011-01-P
![81390 Federal Register / Vol. 80, No. 249 / Tuesday, December 29, 2015 / Notices
TRF operators to enter the space. III. Date of Effectiveness of the Washington, DC 20549 on official
Alternatively, because BDs reporting to Proposed Rule Change and Timing for business days between the hours of
TRFs are themselves free to consolidate Commission Action 10:00 a.m. and 3:00 p.m. Copies of such
the market data that they report, the The foregoing rule change has become filing also will be available for
market for over-the-counter data itself, effective pursuant to Section inspection and copying at the principal
separate and apart from the markets for 19(b)(3)(A)(ii) of the Act.15 At any time office of the Exchange. All comments
execution and trade reporting services— received will be posted without change;
within 60 days of the filing of the
is very competitive. the Commission does not edit personal
proposed rule change, the Commission
Moreover, consolidated data provides identifying information from
summarily may temporarily suspend
two additional measures of pricing submissions. You should submit only
such rule change if it appears to the
discipline for proprietary data products information that you wish to make
Commission that such action is
that are a subset of the consolidated data available publicly. All submissions
necessary or appropriate in the public
stream. First, the consolidated data is should refer to File Number SR–
interest, for the protection of investors,
widely available in real-time at $1 per NASDAQ–2015–152, and should be
or otherwise in furtherance of the
month for non-professional users. submitted on or before January 19,2016.
purposes of the Act. If the Commission
Second, consolidated data is also takes such action, the Commission shall For the Commission, by the Division of
available at no cost with a 15- or 20- institute proceedings to determine Trading and Markets, pursuant to delegated
minute delay. Because consolidated authority.16
whether the proposed rule should be
data contains marketwide information, Brent J. Fields,
approved or disapproved.
it effectively places a cap on the fees Secretary.
assessed for proprietary data (such as IV. Solicitation of Comments [FR Doc. 2015–32652 Filed 12–28–15; 8:45 am]
last sale data) that is simply a subset of Interested persons are invited to BILLING CODE 8011–01–P
the consolidated data. The mere submit written data, views, and
availability of low-cost or free arguments concerning the foregoing,
consolidated data provides a powerful including whether the proposed rule SECURITIES AND EXCHANGE
form of pricing discipline for change is consistent with the Act. COMMISSION
proprietary data products that contain Comments may be submitted by any of [Release No. 34–76732; File No. SR–BOX–
data elements that are a subset of the the following methods: 2015–38]
consolidated data, by highlighting the
optional nature of proprietary products. Electronic Comments Self-Regulatory Organizations; BOX
In this environment, an unjustified • Use the Commission’s Internet Options Exchange LLC; Notice of
price increase in the fees charged for comment form (http://www.sec.gov/ Filing and Immediate Effectiveness of
either transactions or data has the rules/sro.shtml); or a Proposed Rule Change To Amend
potential to impair revenues from both • Send an email to rule-comments@ BOX Rule 2020 (Participant Eligibility
products. ‘‘No one disputes that sec.gov. Please include File Number SR– and Registration) To Replace the
competition for order flow is ‘fierce’.’’ NASDAQ–2015–152 on the subject line. Limited Representative—Proprietary
NetCoalition I at 539. The existence of Trader and Limited Principal—
Paper Comments Proprietary Trader Registration
fierce competition for order flow
implies a high degree of price sensitivity • Send paper comments in triplicate Categories and Establish the
on the part of BDs with order flow, since to Secretary, Securities and Exchange Securities Trader and Securities Trader
they may readily reduce costs by Commission, 100 F Street NE., Principal Registration Categories
directing orders toward the lowest-cost Washington, DC 20549–1090.
December 22, 2015.
trading venues. A BD that shifted its All submissions should refer to File Pursuant to Section 19(b)(1) of the
order flow from one platform to another Number SR–NASDAQ–2015–152. This Securities Exchange Act of 1934
in response to order execution price file number should be included on the (‘‘Act’’),1 and Rule 19b–4 thereunder,2
differentials would both reduce the subject line if email is used. To help the notice is hereby given that on December
value of that platform’s market data and Commission process and review your 14, 2015, BOX Options Exchange LLC
reduce its own need to consume data comments more efficiently, please use (the ‘‘Exchange’’) filed with the
from the disfavored platform. If a only one method. The Commission will Securities and Exchange Commission
platform increases its market data fees, post all comments on the Commission’s (‘‘Commission’’) the proposed rule
the change will affect the overall cost of Internet Web site (http://www.sec.gov/ change as described in Items I, II, and
doing business with the platform, and rules/sro.shtml). Copies of the III below, of which Items I and II have
affected BDs will assess whether they submission, all subsequent been prepared by the self-regulatory
can lower their trading costs by amendments, all written statements organization. The Commission is
directing orders elsewhere and thereby with respect to the proposed rule publishing this notice to solicit
lessening the need for the more change that are filed with the comments on the proposed rule from
expensive data. Commission, and all written interested persons.
communications relating to the
C. Self-Regulatory Organization’s proposed rule change between the I. Self-Regulatory Organization’s
Statement on Comments on the Statement of the Terms of Substance of
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Commission and any person, other than
Proposed Rule Change Received From those that may be withheld from the the Proposed Rule Change
Members, Participants, or Others public in accordance with the The Exchange proposes to amend
Written comments were neither provisions of 5 U.S.C. 552, will be BOX Rule 2020 (Participant Eligibility
solicited nor received. available for Web site viewing and and Registration) to replace the Limited
printing in the Commission’s Public
10.6% of non-exchange share volume in Regulation Reference Room, 100 F Street NE., 16 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
NMS stocks that represented 3.8% of overall
volume. 15 15 U.S.C. 78s(b)(3)(a)(ii). [sic] 2 17 CFR 240.19b–4.
VerDate Sep<11>2014 19:17 Dec 28, 2015 Jkt 238001 PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 E:\FR\FM\29DEN1.SGM 29DEN1](https://thefederalregister.org/doc/80_FR_81639/page/1.svg)
![Federal Register / Vol. 80, No. 249 / Tuesday, December 29, 2015 / Notices 81391
Representative—Proprietary Trader and filing is, in all material respects, based Securities Trader or Securities Trader
Limited Principal—Proprietary Trader upon SR–FINRA–2015–017, which was Principal, respectively, without having
registration categories and establish the recently approved by the Securities and to take additional examinations or any
Securities Trader and Securities Trader Exchange Commission (‘‘SEC’’ or other actions. In addition, individuals
Principal registration categories. The ‘‘Commission’’).4 who were registered as either a Limited
text of the proposed rule change is Representative—Proprietary Trader or
a. Securities Trader Registration
available from the principal office of the Limited Principal—Proprietary Trader
Category
Exchange, at the Commission’s Public prior to the effective date of the
Reference Room and also on the BOX currently uses the Series 56 proposed rule change will be eligible to
Exchange’s Internet Web site at http:// qualification examination for the register as a Securities Trader or
boxexchange.com. Limited Representative—Proprietary Securities Trader Principal without
Trader registration category referenced having to take any additional
II. Self-Regulatory Organization’s in BOX Rule 2020(b)(2).5 However, BOX examinations, provided no more than
Statement of the Purpose of, and allows representatives who have passed two years have passed between the date
Statutory Basis for, the Proposed Rule the Series 7 qualification examination they were last registered as a
Change and who are registered as a [sic] General representative and the date they register
In its filing with the Commission, the Securities Representative on BOX to as a Securities Trader or Securities
self-regulatory organization included conduct proprietary trading without Trader Principal.
statements concerning the purpose of, having to take the Series 56 On January 22, 2015, FINRA entered
and basis for, the proposed rule change qualification examination and register into a Termination Agreement with the
and discussed any comments it received as a Limited Representative— national securities exchanges that set
on the proposed rule change. The text Proprietary Trader. For representatives forth the terms and conditions that will
of these statements may be examined at who are new to the industry or have not govern the winding down of the Series
the places specified in Item IV below. yet taken a qualification examination, 56 examination in advance of its
The self-regulatory organization has BOX requires the representatives replacement by the Series 57
prepared summaries, set forth in engaged in proprietary trading to take a examination and the integration of the
Sections A, B, and C below, of the most qualification examination, either the S501 Program into the S101 Regulatory
significant aspects of such statements. Series 7 or the Series 56, and then Element Continuing Education Program.
register as a General Securities The Series 57 qualification examination
A. Self-Regulatory Organization’s
Representative or a Proprietary Trader will be recognized by FINRA and the
Statement of the Purpose of, and
on BOX. After the implementation of other national securities exchanges on
Statutory Basis for, the Proposed Rule
the Series 57 examination on or after January 4, 2016.
Change
January 4, 2016, BOX will no longer FINRA has developed the Series 57
1. Purpose allow representatives with a General qualification examination and has filed
The Exchange proposes to amend Securities Representative registration to the qualification examination with the
BOX Rule 2020 (Participant Eligibility engage in proprietary trading on BOX.6 Commission as part of a separate
and Registration) to replace the Limited Representatives who are not proposed rule change.7 According to
Representative—Proprietary Trader and grandfathered prior to the FINRA, while the Series 57 examination
Limited Principal—Proprietary Trader implementation of the Series 57 will include the core knowledge portion
registration categories and establish the qualification examination or who are of the Series 7 examination, the Series
Securities Trader and Securities Trader new to the industry after 57 examination will also be based on
Principal registration categories. The implementation of the Series 57; [sic] the current job functions of securities
Exchange is also amending its rules to and are engaged in proprietary trading traders and include elements of the
establish the Series 57 examination as will be required to take the Series 57 Series 55 and Series 56 examination
the appropriate qualification qualification examination and register programs. In addition, FINRA has filed
examination for Securities Traders and as a Securities Trader on BOX. a separate proposed rule change to
eliminating the reference to the S501 BOX notes that the proposed rule establish the fee for the Series 57
continuing education program currently change does not impose any additional examination.8
applicable to Proprietary Traders.3 This examination burdens on persons who
are already registered on BOX. A person b. Securities Trader Principal
3 Currently, in order to supervise, representatives registered as a Limited Representative— Registration Category
must first pass the appropriate underlying Proprietary Trader and Limited BOX current registration rules require
qualification examination which is either the Series Principal—Proprietary Trader on the a person seeking to register as a Limited
7 qualification examination which would allow a effective date of the proposed rule
representative to register as a General Securities
Principal—Proprietary Trader to have
Representative on BOX or the Series 56
change will be grandfathered in as a passed the underlying qualification
qualification examination which would allow a examination Series 56 and be registered
representative to register as a Limited Representatives would then register as a [sic] pursuant to Exchange Rules as a Limited
Representative—Proprietary Trader on BOX. In Securities Trader Principal in order to supervise
addition to passing the Series 7 or Series 56, proprietary trading on BOX.
Representative—Proprietary Trader, and
representatives must also pass the Series 24 4 See Securities Exchange Act Release No. 75783
7 See Securities Exchange Act Release No. 76188
qualification examination and register as a General (August 28, 2015), 80 FR 41119 (July 14, 2015) [sic]
(October 19, 2015), 80 FR 64456 (October 23, 2015)
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Securities Principal if they are registered as a (Order Approving a Proposed Rule Change to
General Securities Representative or as a Limited Establish the Securities Trader and Securities (SR–FINRA–2015–042).
Principal—Proprietary Trader if they are registered Trader Principal Registration Categories) (SR– 8 See Securities Exchange Act Release No. 76391
as a Limited Representative—Proprietary Trader. FINRA–2015–017). (November 9, 2015), 80 FR 70862 (November 16,
After January 4, 2016, the Series 57 qualification 5 See BOX Rule 2020(b)(2). 2015) (SR–FINRA–2015–044). BOX will also file a
examination would replace the Series 56 6 BOX will grandfather in anyone registered with separate rule filing in December 2015 to amend
qualification examination as the appropriate Limited Representative—Proprietary Trader Section VI (Regulatory Fees) of its Fee Schedule to
underlying qualification examination for a registration prior to January 4, 2016 with the new remove Part C (Registration and Continuing
representative to take prior to taking the Series 24 Securities Trader registration category in FINRA’s Education Fees) associated with Series 56
qualification examination so that the Representative Central Registration Depository (‘‘Web CRD’’) qualification examination and the S501 continuing
may supervise proprietary trading on BOX. System. education.
VerDate Sep<11>2014 19:17 Dec 28, 2015 Jkt 238001 PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 E:\FR\FM\29DEN1.SGM 29DEN1](https://thefederalregister.org/doc/80_FR_81639/page/2.svg)
![81392 Federal Register / Vol. 80, No. 249 / Tuesday, December 29, 2015 / Notices
have passed the Series 24 qualification requirements for representatives to the industry wide replacement of the
examination.9 BOX proposes to amend engaged in securities trading activities proprietary trader registration categories
its rule text to replace Limited across different markets. Under the and Series 56 qualification examination
Principal—Proprietary Trader proposed rule change, associated with the Securities Trader registration
registration category with a Securities persons would be eligible to engage in category and Series 57 qualification
Trader Principal registration category in securities trading activities by examination, which will become
addition to replacing the Series 56 registering as Securities Traders and effective on January 4, 2015 [sic].
underlying qualification examination passing a single comprehensive The Commission believes that
with the Series 57 underlying Securities Trader qualification waiving the thirty-day operative delay is
qualification examination. The examination which is consistent with consistent with the protection of
Exchange also proposes to add a the other national securities exchanges. investors and the public interest,
statement to clarify that a person BOX believes that the proposed rule because waiving the operative delay
registered as a General Securities change relating to Securities Trader will enable BOX to have registration and
Principal under 2020(c)(1) above shall Principals will harmonize the qualification requirements that are
not be qualified to function in a registration and qualification consistent with those of the other
Principal capacity with responsibility requirements for principals that national securities exchanges and
over any area of business activity supervise securities trading activities FINRA. Therefore, the Commission
described in Rule 2020(c)(2). across different markets. hereby waives the thirty-day operative
Further, the proposed rule change delay and designates the proposal
2. Statutory Basis does not impose any additional operative as of January 4, 2016.15
The Exchange believes that the examination burdens on persons who At any time within 60 days of the
proposal is consistent with the are already registered. There is no filing of the proposed rule change, the
requirements of Section 6(b) of the obligation to take the proposed Series 57 Commission summarily may
Securities Exchange Act of 1934 (the examination in order to continue in temporarily suspend such rule change if
‘‘Act’’),10 in general, and Section 6(b)(5) their present duties, so the proposed it appears to the Commission that such
of the Act,11 in particular, in that it is rule change is not expected to action is necessary or appropriate in the
designed to prevent fraudulent and disadvantage current registered persons public interest, for the protection of
manipulative acts and practices, to relative to new entrants in this regard. investors, or otherwise in furtherance of
promote just and equitable principles of the purposes of the Act. If the
C. Self-Regulatory Organization’s
trade, to foster cooperation and Commission takes such action, the
Statement on Comments on the
coordination with persons engaged in Commission shall institute proceedings
Proposed Rule Change Received From
facilitating transactions in securities, to to determine whether the proposed rule
Members, Participants, or Others
remove impediments to and perfect the should be approved or disapproved.
mechanism of a free and open market The Exchange has neither solicited
nor received comments on the proposed IV. Solicitation of Comments
and a national market system, and, in
general to protect investors and the rule change. Interested persons are invited to
public interest. In particular, BOX submit written data, views and
III. Date of Effectiveness of the
believes that the proposed rule change arguments concerning the foregoing,
Proposed Rule Change and Timing for
will streamline, and bring consistency including whether the proposed rule
Commission Action
and uniformity to, the qualification and change is consistent with the Act.
(a) This proposed rule change is filed Comments may be submitted by any of
registration requirements for individuals pursuant to paragraph (A) of section
engaged in securities trading activities the following methods:
19(b)(3) of the Exchange Act 12 and Rule
across different markets and for 19b–4(f)(6) thereunder.13 Electronic Comments
principals responsible for supervising (b) This proposed rule change does • Use the Commission’s Internet
such activities, which will, in turn, not significantly affect the protection of comment form (http://www.sec.gov/
improve registration and compliance investors or the public interest, does not rules/sro.shtml); or
efforts. impose any significant burden on • Send an email to rule-comments@
B. Self-Regulatory Organization’s competition, and, by its terms, does not sec.gov. Please include File Number SR–
Statement on Burden on Competition become operative for 30 days after the BOX–2015–38 on the subject line.
date of the filing, or such shorter time
BOX does not believe that the Paper Comments
as the Commission may designate if
proposed rule change will impose any consistent with the protection of • Send paper comments in triplicate
burden on competition not necessary or investors and the public interest. The to Secretary, Securities and Exchange
appropriate in furtherance of the Exchange has requested that the Commission, 100 F Street NE.,
purposes of the Act. Commission waive the 30-day operative Washington, DC 20549–1090.
BOX’s proposed rule change to delay period for ‘‘non-controversial’’ All submissions should refer to File
replace the Limited Representative— proposals and make the proposed rule Number SR–BOX–2015–38. This file
Proprietary Trader registration category change effective and operative upon number should be included on the
and qualification examination Series 56 filing 14 because the proposal is related subject line if email is used. To help the
with the Securities Trader registration
Commission process and review your
asabaliauskas on DSK5VPTVN1PROD with NOTICES
category and Series 57 qualification 12 15 U.S.C. 78s(b)(3)(A). comments more efficiently, please use
examination will reduce the burden on 13 17 CFR 240.19b–4(f)(6). only one method.
associated persons currently required to 14 As required under Rule 19b–4(f)(6)(iii), the
The Commission will post all
be registered as proprietary traders by Exchange provided the Commission with written
comments on the Commission’s Internet
harmonizing the registration notice of its intent to file the proposed rule change
along with a brief description and the text of the
proposed rule change, at least five business days 15 For purposes of waiving the 30-day operative
9 See BOX Rule 2020(c)(2)(i)(A–C). prior to the date of filing of the proposed rule delay, the Commission has considered the proposed
10 15 U.S.C. 78f(b).
change, or such shorter time as designated by the rule’s impact on efficiency, competition, and capital
11 15 U.S.C. 78f(b)(5). Commission. formation. See 15 U.S.C. 78c(f).
VerDate Sep<11>2014 19:17 Dec 28, 2015 Jkt 238001 PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 E:\FR\FM\29DEN1.SGM 29DEN1](https://thefederalregister.org/doc/80_FR_81639/page/3.svg)
![Federal Register / Vol. 80, No. 249 / Tuesday, December 29, 2015 / Notices 81393
Web site (http://www.sec.gov/rules/ provisions of Phlx Rule 1080.07, Complex Order Strategies and to
sro.shtml). Copies of the submission, all ‘‘Complex Orders on Phlx XL,’’ which provide additional details regarding the
subsequent amendments, all written governs the handling of Complex Orders COOP.8 Currently, Phlx Rule
statements with respect to the proposed submitted to the Phlx’s electronic 1080.07(d)(ii) provides that upon receipt
rule change that are filed with the Complex Order System (‘‘System’’). The of a single COLA-eligible order, the
Commission, and all written proposed rule change was published for System initiates the opening process.
communications relating to the comment in the Federal Register on The Phlx proposes to revise Phlx Rule
proposed rule change between the June 23, 2015.3 On July 30, 2015, the 1080.07(d)(ii) to indicate that, instead,
Commission and any person, other than Commission extended the time period the COOP operates in a manner similar
those that may be withheld from the for Commission action to September 21, to a traditional opening process for
public in accordance with the 2015.4 On September 17, 2015, the single leg orders, taking into account all
provisions of 5 U.S.C. 552, will be Commission instituted proceedings to trading interest in a particular Complex
available for Web site viewing and determine whether to approve or Order Strategy (rather than auctioning a
printing in the Commission’s Public disapprove the proposed rule change.5 single order), to determine the price at
Reference Room, on official business The Phlx filed Amendment Nos. 1 and which the maximum number of
days between the hours of 10:00 a.m. 2 to the proposal on November 4, 2015, contracts may trade, and calculating any
and 3:00 p.m., located at 100 F Street and December 3, 2015, respectively.6 On imbalance.9 The Phlx states that the
NE., Washington, DC 20549. Copies of December 15, 2015, the Commission opening process maximizes price
such filing also will be available for extended the time period for discovery and seeks to execute as much
inspection and copying at the principal Commission action to February 18, interest as possible at the best possible
office of the Exchange. All comments 2016.7 The Commission received no price(s).10
received will be posted without change; comments regarding the proposed rule Phlx Rule 1080.07(d)(ii), as amended,
the Commission does not edit personal change. The Commission is publishing provides that the Phlx will conduct a
identifying information from this notice to solicit comments on COOP for any Complex Order Strategy
submissions. You should submit only Amendment Nos. 1 and 2 and is for which the Phlx has received an order
information that you wish to make approving the proposed rule change, as prior to the opening, unless the
available publicly. amended, on an accelerated basis. Complex Order Strategy is already open
All submissions should refer to File II. Description of the Proposal as a result of another electronic auction
Number SR–BOX–2015–38 and should process or another electronic auction
be submitted on or before January 19, The Phlx proposes to amend and
involving the same Complex Order
2016. correct inconsistencies in several
Strategy is in progress.11 Following a
provisions of Phlx Rule 1080.07, which
For the Commission, by the Division of trading halt, the System will conduct a
governs the handling of Complex Orders
Trading and Markets, pursuant to delegated COOP for any Complex Order Strategy
authority.16 submitted to the System. The System
that has a Complex Order present or that
Brent J. Fields,
currently includes a Complex Order
had previously opened prior to the
Opening Process (‘‘COOP’’); the
Secretary. trading halt.12 The System will initiate
Complex Order Live Auction (‘‘COLA’’),
[FR Doc. 2015–32648 Filed 12–28–15; 8:45 am] the COOP once trading in each option
an automated auction for seeking
BILLING CODE 8011–01–P component of a Complex Order Strategy
liquidity and price improvement for
has opened (or re-opened following a
Complex Orders; and a Complex Limit
trading halt) for a certain configurable
Order Book (‘‘CBOOK’’). In addition, the
SECURITIES AND EXCHANGE time not to exceed 60 seconds.13 This
proposal revises Phlx Rule 1080.07 to
COMMISSION
describe the acceptance and treatment 8 A Complex Order Strategy is a particular
[Release No. 34–76742; File No. SR–Phlx– of all-or-none Complex Orders. combination of components of a Complex Order
2015–49] and their ratios to one another. See Phlx Rule
A. Amendments to the COOP Rules 1080.07(a)(ii).
Self-Regulatory Organizations; The Phlx proposes several changes to 9 See Notice, 80 FR at 35997. Phlx states that it
NASDAQ OMX PHLX LLC; Notice of Phlx Rule 1080.07(d) to accurately currently operates the COOP as proposed. Id.
10 See Notice, 80 FR at 36004.
Filing of Amendment Nos. 1 and 2 and describe the operation of the COOP for 11 Phlx Rule 1080.07(d)(ii) currently indicates
Order Granting Accelerated Approval
that the System will conduct a COOP if a Complex
of a Proposed Rule Change, as 3 See Securities Exchange Act Release No. 75189
Order is pending at the opening or re-opening
Modified by Amendment Nos. 1 and 2, (June 17, 2015), 80 FR 35997 (‘‘Notice’’). following a trading halt. The Phlx is revising the
4 See Securities Exchange Act Release No. 75570,
To Amend and Correct Phlx Rule rule to indicate that the receipt of an order will
80 FR 46619 (August 5, 2015). trigger a COOP, regardless of whether the order is
1080.07 5 See Securities Exchange Act Release No. 75942, still pending. For example, an order that was no
December 22, 2015. 80 FR 57406 (September 23, 2015). longer pending because the sender has canceled the
6 As described more fully in Section II(H) below, order will nonetheless trigger a COOP. See Notice,
I. Introduction Amendment No. 1 revises the proposal to further 80 FR at 35997.
clarify or add detail to several rules, provide 12 See Phlx Rule 1080.07(d)(ii).
On June 5, 2015, NASDAQ OMX additional rationale for certain proposed changes, 13 See id. The proposal deletes provisions in Phlx
PHLX LLC (‘‘Exchange’’ or ‘‘Phlx’’) filed and specify the time when the Phlx plans to begin Rule 1080.07(d)(ii)(A)(2) which states that the
with the Securities and Exchange accepting all-or-none Complex Orders. Amendment System will not engage the COOP Timer upon re-
No. 2 revises several rules to clarify the manner in
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Commission (‘‘Commission’’), pursuant opening Complex Order trading when either: (a) the
which participants may participate in auctions and Exchange’s automated execution system was
to Section 19(b)(1) of the Securities in the opening process. When the Phlx filed disengaged and subsequently re-engaged, or (b) the
Exchange Act of 1934 (‘‘Act’’) 1 and Rule Amendment Nos. 1 and 2 with the Commission, it Phlx XL Risk Monitor Mechanism was engaged and
19b–4 thereunder,2 a proposed rule also posted the amendments on the Phlx’s Web site subsequently disengaged. These provisions are
and submitted them as a comment letters to the file, incorrect because the Exchange cannot disengage its
change to amend and correct several which the Commission posted on its Web site and automatic execution system and because the
placed in the public comment file for SR–Phlx– operation of the Risk Monitor Mechanism does not
16 17 CFR 200.30–3(a)(12). 2015–49. impact the COOP Timer. See Notice, 80 FR at
1 15 U.S.C. 78s(b)(1). 7 See Securities Exchange Act Release No. 76648, 35998. The proposal also deletes the references to
2 17 CFR 240.19b–4. 80 FR 79385 (December 21, 2015). Continued
VerDate Sep<11>2014 19:17 Dec 28, 2015 Jkt 238001 PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 E:\FR\FM\29DEN1.SGM 29DEN1](https://thefederalregister.org/doc/80_FR_81639/page/4.svg)
Document Created: 2015-12-29 10:15:46
Document Modified: 2015-12-29 10:15:46
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 81390 |
2024 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR