[Federal Register Volume 76, Number 144 (Wednesday, July 27, 2011)]
[Notices]
[Pages 44972-44974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-18927]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64946; File No. SR-CBOE-2011-064]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Extend the Compliance Deadline for Registration and 
Qualification Pursuant to Rule 3.6A

July 21, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934, 15 U.S.C. 78s(b)(1), notice is hereby given that on July 8, 2011, 
Chicago Board Options Exchange, Incorporated (``CBOE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items, I, II 
and III below, which Items have been prepared by CBOE. The Exchange has 
designated this proposal as one constituting a stated policy, practice, 
or interpretation with respect to the meaning, administration, or 
enforcement of an existing rule under Section 19(b)(3)(A)(i) of the 
Act,\1\ and Rule 19b-4(f)(1) thereunder,\2\ which renders the proposal 
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)(3)(A)(i).
    \2\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (the ``Act''),\3\ the Exchange proposes to extend 
the August 12, 2011 deadline to comply with its rules regarding 
registration and qualification of individual Trading Permit Holders and 
individual associated persons. CBOE is not proposing any textual 
changes to the Rules of CBOE. The text of the proposed rule change is 
available on the Exchange's Web site (http://www.cboe.org/legal), at 
the Exchange's Office of the Secretary and at the Commission.
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    \3\ 15 U.S.C. 78s(b)(1).
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, CBOE included statements 
concerning the purpose of and basis of 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. CBOE 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, Proposed Rule Change

(a) Purpose
    Pursuant to Rule 15b7-1,\4\ promulgated under the Exchange Act,\5\ 
``No registered broker or dealer shall effect any transaction in * * * 
any security unless any natural person

[[Page 44973]]

associated with such broker or dealer who effects or is involved in 
effecting such transaction is registered or approved in accordance with 
the standards of training, experience, competence, and other 
qualification standards * * * established by the rules of any national 
securities exchange. * * * '' CBOE Rule 3.6A sets forth the 
requirements for registration and qualification of individual Trading 
Permit Holders and individual associated persons. In response to a 
request by the Division of Trading and Markets at the Securities and 
Exchange Commission (the ``Commission'' or ``SEC''), CBOE recently 
amended its rules to expand its registration and qualification 
requirements set forth in CBOE Rule 3.6A to include individual Trading 
Permit Holders and individual associated persons that are engaged or to 
be engaged in the securities business of a Trading Permit Holder or TPH 
organization.\6\ CBOE Rule 3.6A provides that these individuals must be 
registered with the Exchange in the category of registration 
appropriate to the function to be performed as prescribed by the 
Exchange. Further, Rule 3.6A requires, among other things, that an 
individual Trading Permit Holder or individual associated person submit 
an application for registration and pass the appropriate qualification 
examination before the registration can become effective. The revised 
requirements apply to both CBOE and CBOE Stock Exchange (``CBSX'') 
Trading Permit Holders and their associated persons.
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    \4\ 17 CFR 240.15b7-1.
    \5\ 15 U.S.C. 78a et seq.
    \6\ See Securities Exchange Act Release No. 63314 (November 12, 
2010), 75 FR 70957 (November 19, 2010) (SR-CBOE-2010-084).
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    In conjunction with the registration requirements established by 
SR-CBOE-2010-084, three new qualification examinations became available 
on June 20, 2011 in the Central Registration Depository system 
(``WebCRD''), which is operated by the Financial Industry Regulatory 
Authority, Incorporated (``FINRA''). These registration categories 
include the following (the required qualification examinations and 
prerequisites, as applicable, associated with each registration 
category are in parentheses): PT--Proprietary Trader (Series 56), CT--
Proprietary Trader Compliance Officer (Series 14, Series 56 
prerequisite) and TP--Proprietary Trader Principal (Series 24, Series 
56 prerequisite). In the Approval Order for SR-CBOE-2010-084, the SEC 
established a deadline of August 12, 2011 for CBOE and CBSX individual 
Trading Permit Holders and individual associated persons of CBOE and 
CBSX Trading Permit Holders to register for and pass the applicable 
qualification examination(s), approximately seven weeks from the date 
the qualification exams became available. CBOE respectfully requests to 
extend the August 12, 2011 deadline to September 19, 2011 (or such 
other later compliance date as the Commission deems appropriate for the 
participating self-regulatory organizations) to be consistent with the 
time period allotted to ISE members to comply with the registration and 
qualification requirements.\7\ CBOE believes its proposal to extend 
this deadline is reasonable and necessary in an effort to implement 
consistent standards for registration and qualification across self-
regulatory organizations.
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    \7\ The International Securities Exchange (``ISE'') received 
approval for a rule filing establishing substantially similar 
registration and qualification requirements on February 4, 2011. The 
Approval Order for SR-ISE-2010-115 provides that ``Associated 
persons of ISE members will have 90 days from the date [sic] See 
Securities Exchange Act Release No. 63843 (February 4, 2011), 76 FR 
7884 (February 11, 2011) (SR-ISE-2010-115).
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    CBOE continues to evaluate the reasonability of the proposed 
ninety-day deadline in light of various factors including, but not 
limited to, the following: (i) Potential disruption to the marketplace 
if a Market-Maker or Designated Primary Market-Maker does not satisfy 
the qualification requirements; (ii) system enforced delays in 
registering for an examination in WebCRD upon an individual's failure 
of a qualification examination; (iii) examination scheduling 
limitations due to the volume of individuals required to take the 
examination(s); and (iv) the ability for those individuals subject to 
heightened qualification examinations to prepare for, schedule and pass 
more than one examination in an extremely limited window of time. CBOE 
will continue to update Commission staff and evaluate whether 
additional rule filings are necessary to address reasonability concerns 
in conjunction with requiring compliance within a ninety-day window.
(b) Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\8\ in general, and furthers the objectives of Section 6(b)(1) \9\ 
of the Act in particular, in that it is designed to enforce compliance 
by Exchange members and persons associated with its members with the 
rules of the Exchange. The Exchange also believes the proposed rule 
change furthers the objectives of Section 6(c)(3) \10\ of the Act, 
which authorizes CBOE to prescribe standards of training, experience 
and competence for persons associated with CBOE members, in that this 
filing is proposing to extend the deadline for compliance with the 
standards of training, experience and competence established by the 
Exchange. CBOE believes that its proposal is reasonable in that it 
establishes a deadline for compliance with the registration and 
qualification requirements that is consistent with the deadline in 
place for ISE members and their associated persons.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(1).
    \10\ 15 U.S.C. 78f(c)(3).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The foregoing proposed rule change will take effect upon filing 
with the Commission pursuant to Section 19(b)(3)(A)(i) of the Act \11\ 
and Rule 19b-4(f)(1) thereunder,\12\ because it constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(i).
    \12\ 17 CFR 240.19b-4(f)(1).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or

[[Page 44974]]

     Send an e-mail to [email protected]. Please include 
File Number SR-CBOE-2011-064 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2011-064. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of CBOE. 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 publicly available. All 
submissions should refer to File Number SR-CBOE-2011-064 and should be 
submitted on or before August 17, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-18927 Filed 7-26-11; 8:45 am]
BILLING CODE 8011-01-P