80_FR_81895 80 FR 81645 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Proprietary Trader and Proprietary Trader Principal Registration Categories, Securities Trader and Securities Trader Principal Registration Categories, and Establishing the Series 57 Examination

80 FR 81645 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Proprietary Trader and Proprietary Trader Principal Registration Categories, Securities Trader and Securities Trader Principal Registration Categories, and Establishing the Series 57 Examination

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 250 (December 30, 2015)

Page Range81645-81648
FR Document2015-32825

Federal Register, Volume 80 Issue 250 (Wednesday, December 30, 2015) 
[Federal Register Volume 80, Number 250 (Wednesday, December 30, 2015)]
[Notices]
[Pages 81645-81648]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-32825]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76758; File No. SR-BATS-2015-118]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
Proprietary Trader and Proprietary Trader Principal Registration 
Categories, Securities Trader and Securities Trader Principal 
Registration Categories, and Establishing the Series 57 Examination

December 23, 2015.
    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 December 22, 2015, BATS Exchange, Inc. (the ``Exchange'' or 
``BATS'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to retire the Proprietary Trader and 
Proprietary Trader Principal registration categories and to 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 deleting the rule referring to the S501 
continuing education program currently applicable to Proprietary 
Traders. The Exchange will announce the effective date of the proposed 
rule change in a circular distributed to Members.
    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant parts 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 is proposing herein to replace the Series 56 with the 
Series 57 examination and to make various related changes to its 
registration rules. Specifically, in response to the FINRA Amendments 
(defined below), the Exchange is proposing to retire the Proprietary 
Trader \5\ registration categories from its own registration rules 
relating to securities trading activity. It is also therefore retiring 
its Proprietary Trader Principal \6\ registration category. To take the 
place of the retired registration categories, the Exchange is 
establishing new Securities Trader and Securities Trader Principal 
registration categories. This filing is based upon and in response to 
SR-FINRA-2015-017, which was recently approved by the Commission.\7\
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    \5\ Rule 2.5, Interpretation and Policy .01(f).
    \6\ Rule 2.5, Interpretation and Policy .01(d).
    \7\ See Securities Exchange Act Release No. 75783 (August 28, 
2015), 80 FR 53369 (September 3, 2015) (approving SR-FINRA-2015-017) 
referred to herein as the ``FINRA Amendments.'' According to the 
release, FINRA's expected effective date for the FINRA Amendments is 
January 4, 2016.
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New Securities Trader Registration Category
    Currently, under Exchange Rule 11.4(e), each person associated with 
a member who is included within the definition of an ``Authorized 
Trader'' in Rule 1.5(d) is required to register with the Exchange and 
to pass an appropriate qualification examination before such 
registration may become effective. The Exchange recognizes the 
following qualification examinations as acceptable for purposes of 
registration as an Authorized Trader: Series 7, Series 56, or one of 
several foreign securities examination modules.
    Interpretation and Policy .01(f) of Exchange Rule 2.5 currently 
provides that a person may register with the Exchange as a Proprietary 
Trader if such person engages solely in proprietary trading, passes the 
Series 56 examination and is an associated person of a proprietary 
trading firm as defined in Interpretation and Policy .01(g) of Exchange 
Rule 2.5. Therefore, pursuant to Interpretation and Policy .01 to 
Exchange Rule 2.5, an individual meeting these criteria may register in 
the Proprietary Trader category after passing the Series 56 examination 
rather than as a General Securities Representative after passing the 
Series 7

[[Page 81646]]

examination or equivalent foreign securities examination module.
    In consultation with FINRA and other exchanges, and in order to 
harmonize the requirements for individuals engaged in trading 
activities, the Exchange is now proposing to retire the Proprietary 
Trader registration category. Similarly, the Exchange is proposing to 
adopt a new Securities Trader registration category.
    Under Exchange Rules, as revised, each person associated with a 
member who is included within the definition of Authorized Trader will 
be required to register as a Securities Trader unless they instead 
qualify based on the Series 7 examination or an equivalent foreign 
securities examination module. Therefore, representatives who 
previously qualified for Proprietary Trader registration will be 
required to register as Securities Traders. Accordingly, the Exchange 
is proposing to modify paragraph (f) of Interpretation and Policy .01 
to reflect the new Securities Trader qualification as a permissible 
registration for Authorized Traders of Members that engage solely in 
trading on the Exchange on either an agency or principal basis. In 
order to register as a Securities Trader, an applicant would be 
required to have passed the new Securities Trader qualification 
examination (Series 57) or a predecessor examination (i.e., the Series 
56, as described below).
    A person registered as a Proprietary Trader in the Central 
Registration Depository (CRD[supreg]) system on the effective date of 
the proposed rule change will be grandfathered as a Securities Trader 
without having to take any additional examinations and without having 
to take any other actions. In addition, individuals who were registered 
as Proprietary Traders in the CRD system prior to the effective date of 
the proposed rule change will be eligible to register as Securities 
Traders without having to take any additional examinations, provided 
that 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.
    Persons registered in the new category would be subject to the 
continuing education requirements of Interpretation and Policy .02(e) 
to Rule 2.5. The Exchange proposes to amend Interpretation and Policy 
.02(e) by removing the option for Series 56 registered persons to 
participate in the S501 Series 56 Proprietary Trader continuing 
education program in order to satisfy the Regulatory Element. The S501 
Series 56 Proprietary Trader continuing education program is being 
phased out along with the Series 56 Proprietary Trader qualification 
examination. As a result, effective January 4, 2016, the S501 Series 56 
Proprietary Trader continuing education program for Series 56 
registered persons will cease to exist. In place of the S501 Series 56 
Proprietary Trader continuing education program for Series 56 
registered persons, the Exchange proposes that Series 57 registered 
persons be required to take the S101 General Program for Series 7 and 
all other registered persons.
New Securities Trader Principal Registration Category
    Currently, under Interpretation and Policy .01(d), the Exchange 
requires each Member to register ``Principals'' \8\ with the Exchange. 
The Exchange requires the Series 24 examination to register as 
Principal. The Exchange will also accept the New York Stock Exchange 
Series 14 Compliance Official Examination in lieu of the Series 24 to 
satisfy the Principal examination requirement for any person designated 
as a Chief Compliance Officer. Further, in addition to the Series 24 or 
Series 14, in order to supervise the activities of General Securities 
Representatives a Principal generally must complete the Series 7 or an 
equivalent foreign examination module as a prerequisite to the Series 
24 or Series 14. However, the Exchange currently permits the Series 56 
as a prerequisite to the Series 24 or Series 14 for those Principals 
whose supervisory responsibilities are limited to overseeing the 
activities of proprietary traders, as described above. Like the 
Proprietary Trader category discussed above, the Proprietary Trader 
Principal registration category is being retired. Accordingly, the 
Exchange proposes to modify the references in the Rule regarding the 
prerequisite to the Series 24 or 14 for an individual that will 
supervise Series 57 qualified traders to correspond with the new 
Securities Trader exam. The Exchange proposes to establish the 
Securities Trader Principal category in Interpretation and Policy 
.01(d).
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    \8\ Pursuant to Interpretation and Policy .01(d) to Rule 2.5, a 
Principal is ``any individual responsible for supervising the 
activities of a Member's Authorized Traders and each person 
designated as a Chief Compliance Officer on Schedule A of Form BD.''
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    The Exchange has been working with other exchanges and FINRA to 
develop this new principal registration category and believes that it 
is an appropriate corollary to the new Securities Trader representative 
registration category. To qualify for registration as a Securities 
Trader Principal, an applicant must become qualified and registered as 
a Securities Trader under proposed Interpretation and Policy .01(c) and 
pass either the Series 24 or Series 14 examination. A person who is 
qualified and registered as a Securities Trader Principal would only be 
permitted to have supervisory responsibility over the activities of 
Securities Traders, unless such person were separately qualified and 
registered in another appropriate principal registration category, such 
as the General Securities Principal registration category. Conversely, 
the proposed rule change clarifies that each principal who will have 
supervisory responsibility over registered Securities Traders is 
required to become qualified and registered as a Securities Trader 
Principal.
    A person registered as a General Securities Principal and as a 
Proprietary Trader Principal in the CRD system on the effective date of 
the proposed rule change will be eligible to register as a Securities 
Trader Principal without having to take any additional examinations. An 
individual who was registered as a General Securities Principal and as 
a Proprietary Trader Principal in the CRD system prior to the effective 
date of the proposed rule change will also be eligible to register as a 
Securities Trader Principal without having to take any additional 
examinations, provided that no more than two years have passed between 
the date they were last registered as a principal and the date they 
register as a Securities Trader Principal. Members, however, will be 
required to affirmatively register persons transitioning to the 
proposed registration category as Securities Trader Principals on or 
after the effective date of the proposed rule change.
Other Changes
    In order to accomplish the changes proposed above, the Exchange has 
proposed modifications throughout Interpretation and Policy .01 and .02 
to Rule 2.5 as well as Rule 11.4(e) to eliminate references to 
Proprietary Trader, Proprietary Trader Principal, and Series 56 
examination and to replace such references with Securities Trader, 
Securities Trader Principal and Series 57 examination. The Exchange 
also proposes to modify Rule 11.6, which sets forth the registration 
requirements applicable to Market Maker Authorized Traders, or MMATs, 
to cross-reference Interpretation and Policy .01 and .02. Although Rule 
11.6 currently requires an MMAT to qualify by taking the Series 7 
examination, the Exchange does not intend to impose

[[Page 81647]]

different registration or continuing education requirements on MMATs 
than are required of Authorized Traders generally. In addition to these 
changes, the Exchange proposes to delete paragraph (h) to 
Interpretation .01, which currently states that: ``Principals 
responsible for supervising the activities of General Securities 
Representatives must successfully complete the Series 7 or an 
equivalent foreign examination module in addition to the Series 24.'' 
The Exchange proposes to eliminate this provision as duplicative with 
existing language in Interpretation and Policy .01, including paragraph 
(d), which states that ``[i]ndividuals that supervise the activities of 
General Securities Representatives must successfully complete the 
Series 7 or an equivalent foreign examination module as a prerequisite 
to the Series 24 or Series 14 and shall be referred to as General 
Securities Principals.'' The Exchange also proposes to modify a 
reference in Interpretation and Policy .01(e) from ``General Securities 
Representative Principal'' to ``General Securities Principal.'' In 
addition, the Exchange proposes to eliminate the fees applicable to the 
Series 56 examination as well as the fees associated with the 
continuing education necessary to maintain registration after passing 
the Series 56 examination. Consistent with all other examinations 
recognized by the Exchange, FINRA will administer the Series 57 
examination and the continuing education requirements related thereto, 
and the Exchange will not be separately charging and collecting any 
fees in order to take such examination or participate in applicable 
continuing education. Finally, in order to continue to align the 
Exchange's rules with the rules of its affiliated exchanges, the 
Exchange proposes to adopt descriptive headings in Interpretation and 
Policy .02 to Rule 2.5 based on Interpretation and Policy .02 to Rule 
2.5 of the rules of EDGA Exchange, Inc. and EDGX Exchange, Inc. and to 
modify the language, but not the substance, of Rule 11.4(e).
2. Statutory Basis
    The Exchange believes that proposed rule change is consistent with 
Section 6(b)(5) of the Act,\9\ which requires, among other things, that 
the Exchange's rules be 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, and to remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system. The Exchange believes that the requirements of the 
Securities Trader and Securities Trader Principal registration 
categories, as well as the new Securities Trader qualification 
examination, should help ensure that proprietary traders and the 
principals who supervise proprietary traders and proprietary trading 
are, and will continue to be, properly trained and qualified to perform 
their functions which should protect investors and the public interest.
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    \9\ 15 U.S.C. 78f(b)(5).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. Implementation of the proposed 
changes to the Exchange's registration rules in coordination with the 
FINRA Amendments does not present any competitive issues, but rather is 
designed to provide less burdensome and more efficient regulatory 
compliance for members and enhance the ability of the Exchange to 
fairly and efficiently regulate members, which will further enhance 
competition. Additionally, the proposed rule change should not affect 
intramarket competition because all similarly situated representatives 
and principals will be required to complete the same qualification 
examinations and maintain the same registrations.

(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 written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (A) 
Significantly affect the protection of investors or the public 
interest; (B) impose any significant burden on competition; and (C) by 
its terms, become operative for 30 days from the date on which it was 
filed or such shorter time as the Commission may designate it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \10\ and 
paragraph (f)(6) of Rule 19b-4 thereunder,\11\ the Exchange has 
designated this rule filing as non-controversial. The Exchange has 
given the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4.
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    The Exchange has requested that the Commission waive the thirty-day 
operative delay so that the proposal may become operative as of January 
4, 2016. The Exchange states that waiving the thirty-day delay would 
allow the Exchange to eliminate the Proprietary Trader and Proprietary 
Trader Principal registration categories and adopt the Securities 
Trader and Securities Trader Principal registration categories at the 
same time as FINRA and the other national securities exchanges. The 
Commission believes that waiving the thirty day delay is consistent 
with the protection of investors and the public interest, as it will 
enable BATS to have the new requirements in effect at the same time as 
the other SROs. Therefore, the Commission hereby waives the thirty-day 
operative delay and designates the proposal operative as of January 4, 
2016.\12\
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    \12\ 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).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) 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 proposal 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 rule-comments@sec.gov. Please include 
File No. SR-BATS-2015-118 on the subject line.

[[Page 81648]]

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 No. SR-BATS-2015-118. 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 such filing will also 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 No. SR-BATS-2015-118 and should be 
submitted on or before January 20, 2016.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Brent J. Fields,
Secretary.
[FR Doc. 2015-32825 Filed 12-29-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 250 / Wednesday, December 30, 2015 / Notices 81645 All submissions should refer to File No. ‘‘Act’’),1 and Rule 19b 4 thereunder,2 (A) Self-Regulatory Organization’s SR–EDGA–2015–48. This file number notice is hereby given that on December Statement of the Purpose of, and should be included on the subject line 22, 2015, BATS Exchange, Inc. (the Statutory Basis for, the Proposed Rule if email is used. To help the ‘‘Exchange’’ or ‘‘BATS’’) filed with the Change Commission process and review your Securities and Exchange Commission 1. Purpose comments more efficiently, please use (‘‘Commission’’) the proposed rule only one method. The Commission will change as described in Items I and II The Exchange is proposing herein to post all comments on the Commission’s below, which Items have been prepared replace the Series 56 with the Series 57 Internet Web site (http://www.sec.gov/ by the Exchange. The Exchange has examination and to make various rules/sro.shtml). Copies of the designated this proposal as a ‘‘non- related changes to its registration rules. submission, all subsequent controversial’’ proposed rule change Specifically, in response to the FINRA amendments, all written statements pursuant to Section 19(b)(3)(A) of the Amendments (defined below), the with respect to the proposed rule Act 3 and Rule 19b–4(f)(6)(iii) Exchange is proposing to retire the change that are filed with the thereunder,4 which renders it effective Proprietary Trader 5 registration Commission, and all written upon filing with the Commission. The categories from its own registration communications relating to the rules relating to securities trading Commission is publishing this notice to proposed rule change between the activity. It is also therefore retiring its solicit comments on the proposed rule Commission and any person, other than Proprietary Trader Principal 6 change from interested persons. those that may be withheld from the registration category. To take the place public in accordance with the I. Self-Regulatory Organization’s of the retired registration categories, the provisions of 5 U.S.C. 552, will be Statement of the Terms of Substance of Exchange is establishing new Securities available for Web site viewing and the Proposed Rule Change Trader and Securities Trader Principal printing in the Commission’s Public registration categories. This filing is Reference Room, 100 F Street NE., The Exchange filed a proposal to based upon and in response to SR– Washington, DC 20549, on official retire the Proprietary Trader and FINRA–2015–017, which was recently business days between the hours of Proprietary Trader Principal registration approved by the Commission.7 10:00 a.m. and 3:00 p.m. Copies of such categories and to establish the Securities filing will also be available for Trader and Securities Trader Principal New Securities Trader Registration inspection and copying at the principal registration categories. The Exchange is Category office of the Exchange. All comments also amending its rules to establish the Currently, under Exchange Rule received will be posted without change; Series 57 examination as the 11.4(e), each person associated with a the Commission does not edit personal appropriate qualification examination member who is included within the identifying information from for Securities Traders and deleting the definition of an ‘‘Authorized Trader’’ in submissions. You should submit only rule referring to the S501 continuing Rule 1.5(d) is required to register with information that you wish to make education program currently applicable the Exchange and to pass an appropriate available publicly. All submissions to Proprietary Traders. The Exchange qualification examination before such should refer to File No. SR–EDGA– will announce the effective date of the registration may become effective. The 2015–48 and should be submitted on or proposed rule change in a circular Exchange recognizes the following before January 20, 2016. distributed to Members. qualification examinations as acceptable For the Commission, by the Division of for purposes of registration as an The text of the proposed rule change Trading and Markets, pursuant to delegated Authorized Trader: Series 7, Series 56, is available at the Exchange’s Web site authority.13 or one of several foreign securities at www.batstrading.com, at the examination modules. Brent J. Fields, principal office of the Exchange, and at Secretary. Interpretation and Policy .01(f) of the Commission’s Public Reference [FR Doc. 2015–32819 Filed 12–29–15; 8:45 am] Exchange Rule 2.5 currently provides Room. BILLING CODE 8011–01–P that a person may register with the II. Self-Regulatory Organization’s Exchange as a Proprietary Trader if such Statement of the Purpose of, and person engages solely in proprietary SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule trading, passes the Series 56 COMMISSION Change examination and is an associated person of a proprietary trading firm as defined [Release No. 34–76758; File No. SR–BATS– In its filing with the Commission, the in Interpretation and Policy .01(g) of 2015–118] Exchange included statements Exchange Rule 2.5. Therefore, pursuant Self-Regulatory Organizations; BATS concerning the purpose of and basis for to Interpretation and Policy .01 to Exchange, Inc.; Notice of Filing and the proposed rule change and discussed Exchange Rule 2.5, an individual Immediate Effectiveness of Proposed any comments it received on the meeting these criteria may register in Rule Change Relating to Proprietary proposed rule change. The text of these the Proprietary Trader category after Trader and Proprietary Trader Principal statements may be examined at the passing the Series 56 examination rather Registration Categories, Securities places specified in Item IV below. The than as a General Securities Trader and Securities Trader Principal Exchange has prepared summaries, set Representative after passing the Series 7 mstockstill on DSK4VPTVN1PROD with NOTICES Registration Categories, and forth in Sections A, B, and C below, of Establishing the Series 57 Examination the most significant parts of such 5 Rule 2.5, Interpretation and Policy .01(f). statements. 6 Rule 2.5, Interpretation and Policy .01(d). December 23, 2015. 7 See Securities Exchange Act Release No. 75783 Pursuant to Section 19(b)(1) of the 1 15 (August 28, 2015), 80 FR 53369 (September 3, 2015) U.S.C. 78s(b)(1). (approving SR–FINRA–2015–017) referred to herein Securities Exchange Act of 1934 (the 2 17 CFR 240.19b–4. as the ‘‘FINRA Amendments.’’ According to the 3 15 U.S.C. 78s(b)(3)(A). release, FINRA’s expected effective date for the 13 17 CFR 200.30–3(a)(12). 4 17 CFR 240.19b–4(f)(6)(iii). FINRA Amendments is January 4, 2016. VerDate Sep<11>2014 17:59 Dec 29, 2015 Jkt 238001 PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 E:\FR\FM\30DEN1.SGM 30DEN1

81646 Federal Register / Vol. 80, No. 250 / Wednesday, December 30, 2015 / Notices examination or equivalent foreign phased out along with the Series 56 become qualified and registered as a securities examination module. Proprietary Trader qualification Securities Trader under proposed In consultation with FINRA and other examination. As a result, effective Interpretation and Policy .01(c) and pass exchanges, and in order to harmonize January 4, 2016, the S501 Series 56 either the Series 24 or Series 14 the requirements for individuals Proprietary Trader continuing education examination. A person who is qualified engaged in trading activities, the program for Series 56 registered persons and registered as a Securities Trader Exchange is now proposing to retire the will cease to exist. In place of the S501 Principal would only be permitted to Proprietary Trader registration category. Series 56 Proprietary Trader continuing have supervisory responsibility over the Similarly, the Exchange is proposing to education program for Series 56 activities of Securities Traders, unless adopt a new Securities Trader registered persons, the Exchange such person were separately qualified registration category. proposes that Series 57 registered and registered in another appropriate Under Exchange Rules, as revised, persons be required to take the S101 principal registration category, such as each person associated with a member General Program for Series 7 and all the General Securities Principal who is included within the definition of other registered persons. registration category. Conversely, the Authorized Trader will be required to proposed rule change clarifies that each register as a Securities Trader unless New Securities Trader Principal principal who will have supervisory they instead qualify based on the Series Registration Category responsibility over registered Securities 7 examination or an equivalent foreign Currently, under Interpretation and Traders is required to become qualified securities examination module. Policy .01(d), the Exchange requires and registered as a Securities Trader Therefore, representatives who each Member to register ‘‘Principals’’ 8 Principal. previously qualified for Proprietary with the Exchange. The Exchange A person registered as a General Trader registration will be required to requires the Series 24 examination to Securities Principal and as a Proprietary register as Securities Traders. register as Principal. The Exchange will Trader Principal in the CRD system on Accordingly, the Exchange is proposing also accept the New York Stock the effective date of the proposed rule to modify paragraph (f) of Interpretation Exchange Series 14 Compliance Official change will be eligible to register as a and Policy .01 to reflect the new Examination in lieu of the Series 24 to Securities Trader Principal without Securities Trader qualification as a satisfy the Principal examination having to take any additional permissible registration for Authorized requirement for any person designated examinations. An individual who was Traders of Members that engage solely as a Chief Compliance Officer. Further, registered as a General Securities in trading on the Exchange on either an in addition to the Series 24 or Series 14, Principal and as a Proprietary Trader agency or principal basis. In order to in order to supervise the activities of Principal in the CRD system prior to the register as a Securities Trader, an General Securities Representatives a effective date of the proposed rule applicant would be required to have Principal generally must complete the change will also be eligible to register as passed the new Securities Trader Series 7 or an equivalent foreign a Securities Trader Principal without qualification examination (Series 57) or examination module as a prerequisite to having to take any additional a predecessor examination (i.e., the the Series 24 or Series 14. However, the examinations, provided that no more Series 56, as described below). Exchange currently permits the Series than two years have passed between the A person registered as a Proprietary 56 as a prerequisite to the Series 24 or date they were last registered as a Trader in the Central Registration Series 14 for those Principals whose principal and the date they register as a Depository (CRD®) system on the supervisory responsibilities are limited Securities Trader Principal. Members, effective date of the proposed rule to overseeing the activities of however, will be required to change will be grandfathered as a proprietary traders, as described above. affirmatively register persons Securities Trader without having to take Like the Proprietary Trader category transitioning to the proposed any additional examinations and discussed above, the Proprietary Trader registration category as Securities without having to take any other Principal registration category is being Trader Principals on or after the actions. In addition, individuals who retired. Accordingly, the Exchange effective date of the proposed rule were registered as Proprietary Traders in proposes to modify the references in the change. the CRD system prior to the effective Rule regarding the prerequisite to the date of the proposed rule change will be Series 24 or 14 for an individual that Other Changes eligible to register as Securities Traders will supervise Series 57 qualified In order to accomplish the changes without having to take any additional traders to correspond with the new proposed above, the Exchange has examinations, provided that no more Securities Trader exam. The Exchange proposed modifications throughout than two years have passed between the proposes to establish the Securities Interpretation and Policy .01 and .02 to date they were last registered as a Trader Principal category in Rule 2.5 as well as Rule 11.4(e) to representative and the date they register Interpretation and Policy .01(d). eliminate references to Proprietary as a Securities Trader. The Exchange has been working with Trader, Proprietary Trader Principal, Persons registered in the new category other exchanges and FINRA to develop and Series 56 examination and to would be subject to the continuing this new principal registration category replace such references with Securities education requirements of Interpretation and believes that it is an appropriate Trader, Securities Trader Principal and and Policy .02(e) to Rule 2.5. The corollary to the new Securities Trader Series 57 examination. The Exchange Exchange proposes to amend representative registration category. To also proposes to modify Rule 11.6, mstockstill on DSK4VPTVN1PROD with NOTICES Interpretation and Policy .02(e) by qualify for registration as a Securities which sets forth the registration removing the option for Series 56 Trader Principal, an applicant must requirements applicable to Market registered persons to participate in the Maker Authorized Traders, or MMATs, S501 Series 56 Proprietary Trader 8 Pursuant to Interpretation and Policy .01(d) to to cross-reference Interpretation and continuing education program in order Rule 2.5, a Principal is ‘‘any individual responsible Policy .01 and .02. Although Rule 11.6 for supervising the activities of a Member’s to satisfy the Regulatory Element. The Authorized Traders and each person designated as currently requires an MMAT to qualify S501 Series 56 Proprietary Trader a Chief Compliance Officer on Schedule A of Form by taking the Series 7 examination, the continuing education program is being BD.’’ Exchange does not intend to impose VerDate Sep<11>2014 17:59 Dec 29, 2015 Jkt 238001 PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 E:\FR\FM\30DEN1.SGM 30DEN1

Federal Register / Vol. 80, No. 250 / Wednesday, December 30, 2015 / Notices 81647 different registration or continuing perfect the mechanism of a free and controversial. The Exchange has given education requirements on MMATs open market and a national market the Commission written notice of its than are required of Authorized Traders system. The Exchange believes that the intent to file the proposed rule change, generally. In addition to these changes, requirements of the Securities Trader along with a brief description and text the Exchange proposes to delete and Securities Trader Principal of the proposed rule change at least five paragraph (h) to Interpretation .01, registration categories, as well as the business days prior to the date of filing which currently states that: ‘‘Principals new Securities Trader qualification of the proposed rule change, or such responsible for supervising the activities examination, should help ensure that shorter time as designated by the of General Securities Representatives proprietary traders and the principals Commission. must successfully complete the Series 7 who supervise proprietary traders and The Exchange has requested that the or an equivalent foreign examination proprietary trading are, and will Commission waive the thirty-day module in addition to the Series 24.’’ continue to be, properly trained and operative delay so that the proposal may The Exchange proposes to eliminate this qualified to perform their functions provision as duplicative with existing become operative as of January 4, 2016. which should protect investors and the language in Interpretation and Policy The Exchange states that waiving the public interest. .01, including paragraph (d), which thirty-day delay would allow the states that ‘‘[i]ndividuals that supervise (B) Self-Regulatory Organization’s Exchange to eliminate the Proprietary the activities of General Securities Statement on Burden on Competition Trader and Proprietary Trader Principal Representatives must successfully The Exchange does not believe that registration categories and adopt the complete the Series 7 or an equivalent the proposed rule change will impose Securities Trader and Securities Trader foreign examination module as a any burden on competition not Principal registration categories at the prerequisite to the Series 24 or Series 14 necessary or appropriate in furtherance same time as FINRA and the other and shall be referred to as General of the purposes of the Act. national securities exchanges. The Securities Principals.’’ The Exchange Implementation of the proposed Commission believes that waiving the also proposes to modify a reference in changes to the Exchange’s registration thirty day delay is consistent with the Interpretation and Policy .01(e) from rules in coordination with the FINRA protection of investors and the public ‘‘General Securities Representative Amendments does not present any interest, as it will enable BATS to have Principal’’ to ‘‘General Securities competitive issues, but rather is the new requirements in effect at the Principal.’’ In addition, the Exchange designed to provide less burdensome same time as the other SROs. Therefore, proposes to eliminate the fees and more efficient regulatory the Commission hereby waives the applicable to the Series 56 examination compliance for members and enhance thirty-day operative delay and as well as the fees associated with the the ability of the Exchange to fairly and designates the proposal operative as of continuing education necessary to efficiently regulate members, which will January 4, 2016.12 maintain registration after passing the further enhance competition. At any time within 60 days of the Series 56 examination. Consistent with Additionally, the proposed rule change filing of the proposed rule change, the all other examinations recognized by the should not affect intramarket Commission summarily may Exchange, FINRA will administer the competition because all similarly temporarily suspend such rule change if Series 57 examination and the situated representatives and principals it appears to the Commission that such continuing education requirements will be required to complete the same action is: (1) Necessary or appropriate in related thereto, and the Exchange will qualification examinations and maintain the public interest; (2) for the protection not be separately charging and the same registrations. of investors; or (3) otherwise in collecting any fees in order to take such furtherance of the purposes of the Act. examination or participate in applicable (C) Self-Regulatory Organization’s Statement on Comments on the If the Commission takes such action, the continuing education. Finally, in order Commission shall institute proceedings to continue to align the Exchange’s rules Proposed Rule Change Received From Members, Participants or Others to determine whether the proposed rule with the rules of its affiliated exchanges, should be approved or disapproved. the Exchange proposes to adopt The Exchange has neither solicited descriptive headings in Interpretation nor received written comments on the IV. Solicitation of Comments and Policy .02 to Rule 2.5 based on proposed rule change. Interpretation and Policy .02 to Rule 2.5 Interested persons are invited to III. Date of Effectiveness of the submit written data, views and of the rules of EDGA Exchange, Inc. and Proposed Rule Change and Timing for arguments concerning the foregoing, EDGX Exchange, Inc. and to modify the Commission Action including whether the proposal is language, but not the substance, of Rule 11.4(e). Because the foregoing proposed rule consistent with the Act. Comments may change does not: (A) Significantly affect be submitted by any of the following 2. Statutory Basis the protection of investors or the public methods: The Exchange believes that proposed interest; (B) impose any significant Electronic Comments rule change is consistent with Section burden on competition; and (C) by its 6(b)(5) of the Act,9 which requires, terms, become operative for 30 days • Use the Commission’s Internet among other things, that the Exchange’s from the date on which it was filed or comment form (http://www.sec.gov/ rules be designed to prevent fraudulent such shorter time as the Commission rules/sro.shtml); or mstockstill on DSK4VPTVN1PROD with NOTICES and manipulative acts and practices, to may designate it has become effective • Send an email to rule-comments@ promote just and equitable principles of pursuant to Section 19(b)(3)(A) of the sec.gov. Please include File No. SR– trade, to foster cooperation and Act 10 and paragraph (f)(6) of Rule 19b– BATS–2015–118 on the subject line. coordination with persons engaged in 4 thereunder,11 the Exchange has facilitating transactions in securities, designated this rule filing as non- 12 For purposes of waiving the 30-day operative and to remove impediments to and delay, the Commission has considered the proposed 10 15 U.S.C. 78s(b)(3)(A). rule’s impact on efficiency, competition, and capital 9 15 U.S.C. 78f(b)(5). 11 17 CFR 240.19b–4. formation. See 15 U.S.C. 78c(f). VerDate Sep<11>2014 17:59 Dec 29, 2015 Jkt 238001 PO 00000 Frm 00141 Fmt 4703 Sfmt 4703 E:\FR\FM\30DEN1.SGM 30DEN1

81648 Federal Register / Vol. 80, No. 250 / Wednesday, December 30, 2015 / Notices Paper Comments SECURITIES AND EXCHANGE List and the Fee Schedule related to COMMISSION these co-location services. • Send paper comments in triplicate The Exchange proposes to offer the to Secretary, Securities and Exchange [Release No. 34–76750; File No. SR– wireless connection to provide Users Commission, 100 F Street NE., NYSEMKT–2015–85] with an alternative means of Washington, DC 20549–1090. connectivity for Third Party Data. As the Self-Regulatory Organizations; NYSE All submissions should refer to File No. MKT LLC; Order Approving Proposed Exchange notes, wireless connections SR–BATS–2015–118. This file number Rule Change to the Co-location involve beaming signals through the air should be included on the subject line Services Offered by the Exchange (the between antennas that are within sight Offering of a Wireless Connection to of one another.6 Because the signals if email is used. To help the Allow Users to Receive Market Data travel a straight, unimpeded line, and Commission process and review your Feeds from Third Party Markets) and to because light waves travel faster through comments more efficiently, please use air than through glass (fiber optics), only one method. The Commission will Reflect Changes to the NYSE MKT Equities Price List and the NYSE Amex wireless messages have lower latency post all comments on the Commission’s than messages travelling through fiber Internet Web site (http://www.sec.gov/ Options Fee Schedule Related to These Services optics.7 rules/sro.shtml). Copies of the Under the proposed rule change, the submission, all subsequent December 23, 2015. Exchange would utilize a network amendments, all written statements vendor to provide a wireless connection with respect to the proposed rule I. Introduction to the Third Party Data through wireless change that are filed with the On October 23, 2015, NYSE MKT LLC connections from the Exchange access Commission, and all written (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed centers in Secaucus and Carteret, New communications relating to the with the Securities and Exchange Jersey, to its data center in Mahwah, proposed rule change between the Commission (the ‘‘Commission’’) New Jersey, through a series of towers Commission and any person, other than pursuant to Section 19(b)(1) 1 of the equipped with wireless equipment.8 A those that may be withheld from the Securities Exchange Act of 1934 (the User that chooses this optional service public in accordance with the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 a would be able to receive data feeds from provisions of 5 U.S.C. 552, will be proposed rule change to amend the co- NASDAQ and BATS Exchange, Inc. over available for Web site viewing and location services offered by the a wireless connection. To receive Third printing in the Commission’s Public Exchange to include a means for co- Party Data, the User would enter into a Reference Room, 100 F Street NE., located Users to receive market data contract with the relevant third party Washington, DC 20549, on official feeds from third party markets through market, which would charge the User a wireless connection. The proposed the applicable market data fees for the business days between the hours of rule change was published in the Third Party Data. The Exchange would 10:00 a.m. and 3:00 p.m. Copies of such Federal Register on November 12, charge the User fees for the wireless filing will also be available for 2015.4 No comment letters were connection for the Third Party Data.9 inspection and copying at the principal received in response to the Notice. This A User would be charged a $5,000 office of the Exchange. All comments order approves the proposed rule non-recurring initial charge for each received will be posted without change; change. wireless connection and a monthly the Commission does not edit personal recurring charge (‘‘MRC’’) that would identifying information from II. Description of the Proposed Rule Change vary depending upon the feed that the submissions. You should submit only User opts to receive. If a User purchased information that you wish to make The Exchange proposes to change the two wireless connections, it would pay available publicly. All submissions co-location services offered by the two non-recurring initial charges. The should refer to File No. SR–BATS– Exchange to include a means for Users MRC for a wireless connection to each 2015–118 and should be submitted on to receive market data feeds from third of BATS Pitch BZX Gig shaped data, or before January 20, 2016. party markets (the ‘‘Third Party Data’’) DirectEdge EDGX Gig shaped data, and through a wireless connection.5 In NASDAQ BX Totalview-ITCH data will For the Commission, by the Division of Trading and Markets, pursuant to delegated addition, the proposed rule change be $6,000; the MRC for a wireless authority.13 reflects changes to the Exchange’s Price connection of NASDAQ Totalview-ITCH Brent J. Fields, data will be $8,500; and the MRC for a 1 15 U.S.C.78s(b)(1). wireless connection of NASDAQ Secretary. 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. Totalview-ITCH and BX Totalview- [FR Doc. 2015–32825 Filed 12–29–15; 8:45 am] ITCH data will be $12,000. The 4 See Securities Exchange Act Release No. 76366 BILLING CODE 8011–01–P (November 5, 2015), 80 FR 70047 (November 12, 6 See Notice, supra note 4 at 70048. 2015) (‘‘Notice’’). 5 For purposes of the Exchange’s co-location 7 See id. 8 The NASDAQ Stock Market LLC (‘‘NASDAQ’’) services, a ‘‘User’’ means any market participant that requests to receive co-location services directly offers a similar wireless service. See Securities from the Exchange. See Securities Exchange Act Exchange Act Release No. 68735 (January 25, 2013), Release No. 76009 (September 29, 2015), 80 FR 78 FR 6842 (January 31, 2013) (SR–NASDAQ–2012– 60213 (October 5, 2015) (SR–NYSEMKT–2015–67). 119) (approving a proposed rule change to establish mstockstill on DSK4VPTVN1PROD with NOTICES As specified in the Price List and the Fee Schedule, a new optional wireless connectivity for co-located a User that incurs co-location fees for a particular clients). co-location service pursuant thereto would not be 9 A User would only receive the Third Party Data subject to co-location fees for the same co-location for which it had entered into a contract. For service charged by the Exchange’s affiliates New example, a User that contracted with NASDAQ for York Stock Exchange LLC and NYSE Arca, Inc. See the NASDAQ Totalview-ITCH data feed but did not Securities Exchange Act Release No. 70176 (August contract to receive any other Third Party Data 13, 2013), 78 FR 50471 (August 19, 2013) (SR– would receive only the NASDAQ Totalview-ITCH 13 17 CFR 200.30–3(a)(12). NYSEMKT–2013–67). data feed through its wireless connection. VerDate Sep<11>2014 17:59 Dec 29, 2015 Jkt 238001 PO 00000 Frm 00142 Fmt 4703 Sfmt 4703 E:\FR\FM\30DEN1.SGM 30DEN1


Document Created: 2015-12-30 03:15:43
Document Modified: 2015-12-30 03:15:43
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 81645 
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