[Federal Register Volume 78, Number 169 (Friday, August 30, 2013)]
[Notices]
[Pages 53807-53809]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21186]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70256; File No. SR-BYX-2013-029]
Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Related to
Registration and Continuing Education Fees for BATS Y-Exchange, Inc.
August 26, 2013.
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 August 16, 2013, BATS Y-Exchange, Inc. (the ``Exchange'' or
``BYX'') 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 the Exchange. The
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change 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)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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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 amend Rule 2.5, entitled
``Restrictions,'' to include the Regulatory Fees that will be charged
to certain registered persons at the Exchange for the proficiency
examination and continuing education (``CE'') requirements under the
Rule. Changes to Exchange fees pursuant to this proposal are effective
upon filing.
The text of the proposed rule change is available at the Exchange's
Web site at http://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 proposes to add Interpretation and Policy .01(j) to
Rule 2.5 to include the examination fee that will be charged to
individuals that choose to complete the Proprietary Traders
Qualification Examination (``Series 56''). Specifically, the Exchange
is proposing to add a $195 examination fee for this examination. The
Exchange also proposes to add Interpretation and Policy .02(f) to Rule
2.5 to include a $60 session fee for those individuals that must
complete the S501 Series 56 Proprietary Trader Continuing Education
Program (``S501'').
Examination Fee
Recently, the Exchange amended Interpretation and Policy .01(f) to
Rule 2.5 to include the registration and qualification requirements for
persons registered as Proprietary Traders with
[[Page 53808]]
the Exchange.\5\ Under this provision, those who wish to register as a
Proprietary Trader with the Exchange must complete the Series 56
examination. Thus, the Exchange is proposing to include the $195 fee
that will be charged to individuals who wish to complete this
examination. This fee will be collected with [sic] the administrator of
the Series 56, which is currently FINRA. The Exchange will not invoice
or collect this fee.
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\5\ See SR-BYX-2013-028 (filed Aug. 15, 2013), available at
http://www.batstrading.com/regulation/rule_filings/byx.
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Rule 2.5 does not currently set forth the examination fees for
other qualification examinations required or accepted by the Exchange
because these programs are within the jurisdiction of the Financial
Industry Regulatory Authority (``FINRA''), which collects these
examination fees from its members. The Series 56, however, applies to
Exchange Members that are not required by Section 15(b)(8) \6\ of the
Act to become FINRA Members. Therefore, [sic] Exchange believes it is
appropriate to include the Series 56 examination fee within Rule 2.5 to
make the cost of this examination clear to Exchange Members. The
examination fee is designed to reflect the costs of maintaining and
developing the Series 56 and to ensure that the examination's content
is and continues to be adequate for testing the competence and
knowledge generally applicable to proprietary trading.
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\6\ 15 U.S.C. 78o(b)(8).
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Continuing Education Fees
Interpretation and Policy .02(a) to Rule 2.5 requires all
Registered Representatives to complete the Regulatory Element of the CE
program beginning with the ``occurrence of their second registration
anniversary date and every three years thereafter or as otherwise
prescribed by the Exchange.'' Recently, the Exchange amended
Interpretation and Policy .02 to enumerate the different CE programs
appropriate for each category of registration with the Exchange.\7\ The
Exchange is now proposing to outline the necessary fees associated with
the Regulatory Element of the S501.\8\
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\7\ Id. [sic]
\8\ The Exchange has assisted with the development of, and plan
to administer, the Series 56 and S501 along with the following
participating self-regulatory organizations: BATS Exchange, Inc.,
Chicago Board Options Exchange (``CBOE''), C2 Options Inc. (``C2''),
the Chicago Stock Exchange, Inc., the New York Stock Exchange, LLC,
NYSE Arca, Inc., NYSE Amex, LLC, the NASDAQ Stock Market LLC, the
National Stock Exchange, Inc., NASDAQ OMX BX, Inc., NASDAQ OMX PHLX,
LLC, EDGA Exchange, Inc. (``EDGA''), EDGX Exchange, Inc. (``EDGX''),
International Securities Exchange, LLC, and BOX Options Exchange,
LLC.
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The Exchange has determined that this fee change is necessary to
administer the Series 56 CE program. Specifically, the $60 session fee
will be used to fund the CE program administered to Proprietary Traders
that have a Series 56 registration and are required to complete the
S501. The Exchange believes the $60 fee is reasonable and proportional
based upon the programming of the CE. In addition, the $60 fee will
only be used for the administration of the CE, while the costs
associated with the development of the S501 are included in the
examination fee. Like the examination fee for the Series 56, the S501
fee will be collected by the administrator of the Program, which is
currently FINRA. The Exchange will not invoice or collect this fee. The
Exchange is not proposing to include the CE fees for the other CE
programs enumerated in the Rule. Like the registration examinations,
these CE programs are within FINRA's jurisdiction and FINRA collects
the session fees from its members.
Because the CE element is separate and different from the CE
programs already administered, the proposed change would put Registered
Representatives on notice of the associated fees. The proposed fee
would also allow the Exchange to fund the S501, which is more tailored
to the Series 56 registration. In addition, the Exchange believes other
exchanges will be assessing the same fee for this CE program. The
proposed changes are to take effect on August 19, 2013.
2. Statutory Basis
The Exchange believes that its proposal is consistent with the
Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\9\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(5) of the Act,\10\ which requires that the rules of an exchange 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 regulating, clearing,
settling, and processing information with respect to, and facilitation
of 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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) requirement that the rules of an
exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.\11\ The proposed changes
fulfill this requirement because the fees are allocated to all
individuals who have or wish to have a Series 56 registration. The
proposed fees are reasonably designed to allow FINRA to cover its cost
of administering the Series 56 examination program on behalf of the
Exchange. The fee for the Series 56 examination is greater than the fee
for the CE program because the examination fee is also designed to
cover the costs associated with developing both the Series 56
examination and the related S501. The S501 fee is meant only to cover
the costs of administering the CE sessions. The Exchange notes that it
will not invoice or collect funds from Members that are subject to
these fees because these fees will be paid directly to FINRA. The
Exchange and the current administrator of the examination and CE
program, FINRA, incur costs in maintaining and developing the
examination and CE program to ensure the content is and continues to be
adequate for testing the competence and knowledge generally applicable
to proprietary trading. The Exchange believes it is reasonable and
equitable to include these fees in Interpretations and Policies .01(j)
and .02(f) to make the costs of the Series 56 and its related CE
requirement clear to Members. Moreover, the Exchange believes other
exchanges will be assessing the same fees for this examination and
related CE program.\12\
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\11\ Id.
\12\ CBOE, C2, EDGX, and EDGA have already assessed this $60
fee. Securities Exchange Act Release No. 70064 (July 30, 2013), 78
FR 47469 (Aug. 5, 2013) (SR-CBOE-2013-078); Securities Exchange Act
Release No. 70194 (Aug. 14, 2013) (SR-C2-2013-030); Securities
Exchange Act Release No. 70162 (Aug. 12, 2013) (SR-EDGX-2013-31);
Securities Exchange Act Release No. 70163 (Aug. 12, 2013) (SR-EDGA-
203-24 [sic]). EDGX and EDGA have also already assessed the $195
examination fee. Securities Exchange Act Release No. 70162 (Aug. 12,
2013) (SR-EDGX-2013-31); Securities Exchange Act Release No. 70163
(Aug. 12, 2013) (SR-EDGA-203-24 [sic]).
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Finally, the Exchange believes the proposed rule change is
consistent with Section 6(b)(1) of the Act,\13\ which requires that the
Exchange be organized and have the capacity to be able to carry out the
purposes of the Act such that it can enforce compliance with the Act by
persons registered with the Exchange.
[[Page 53809]]
As previously discussed, the proposed rule change is designed to fund
the administration of the Series 56 and S501. Thus, the proposed rule
change will help the Exchange enforce compliance with the Act and
Exchange Rules by those persons registered as Proprietary Traders.
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\13\ 15 U.S.C. 78f(b)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule changes will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. In particular, the proposed
rule change will not impose any burden on intermarket competition
because it will merely serve to aid the Exchange in fulfilling its
obligations as a Self-Regulatory Organization by funding the
administration of the Series 56 and S501. The proposed rule change will
not impose any burden on intramarket competition because all Registered
Representatives are required to pass a qualification examination and
fulfill the appropriate CE requirement as outlined in Interpretations
and Policies .01 and .02 of Rule 2.5, and the fees for the Series 56
and S501 will apply uniformly to all Members. In addition, as noted
above, the Exchange believes other exchanges will be assessing the same
fees for the Series 56 and related CE program to be collected by FINRA.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \14\ and paragraph (f) of Rule 19b-4
thereunder.\15\ 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.
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-BYX-2013-029 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-BYX-2013-029. 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 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-BYX-2013-029 and should be
submitted on or before September 20, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-21186 Filed 8-29-13; 8:45 am]
BILLING CODE 8011-01-P