Federal Register / Vol. 76, No. 156 / Friday, August 12, 2011 / Notices 50279 

19 Id. 

20For purposes only of waiving the operative 

delay of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). See also 17 CFR 200.30–3(a)(59). 

21 17 CFR 200.30–3(a)(12). 

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). 

of the proposed rule change, or such 

shorter time as designated by the 

Commission. The Exchange has satisfied 

this requirement. 

Under Rule 19b–4(f)(6) of the Act,19 a 

proposal does not become operative for 

30 days after the date of its filing, or 

such shorter time as the Commission 

may designate if consistent with the 

protection of investors and the public 

interest. The Commission is waiving the 

30-day operative period for this filing so 

that it may become effective and 

operative upon filing.20 The 

Commission believes waiving the 30- 

day operative delay is consistent with 

the protection of investors and the 

public interest as the waiver will allow 

the Exchange to adopt the content 

outline, and provide notice of having 

done so to associated persons of its 

members, near the same time as other 

exchanges. The Commission, therefore, 

designates the proposed rule change to 

be operative upon filing with the 

Commission. 

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 

• Send an E-mail to rulecomments@sec.gov. Please include File 

No. SR–ISE–2011–36 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–ISE–2011–36. 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 Commissions 

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. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

ISE. 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–ISE–2011–36 and should be 

submitted by September 2, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–20578 Filed 8–11–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65056; File No. SR–BX– 

2011–053] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Adopt a 

Limited Category of Principal 

Registration for Proprietary Traders 

August 8, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 2 thereunder, 

notice is hereby given that on August 3, 

2011, NASDAQ OMX BX, Inc. 

(‘‘Exchange’’ or ‘‘BX’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II below, which Items have been 

prepared by the Exchange. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ rule change pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f)(6) thereunder.4 The 

Commission is publishing this notice to 

solicit comments on the proposal from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

BX is filing with the Commission a 

proposed rule change to amend its Rule 

1022, Categories of Principal 

Registration, to adopt a new limited 

category of principal registration for 

proprietary traders, as described further 

below. BX will implement the proposal 

upon notice to its membership. 

The text of the proposed rule change 

is available at http://nasdaqomxbx. 

cchwallstreet.com/, at BX’s principal 

office, 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 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 purpose of the proposed rule 

change is to recognize a new category of 

limited principal registration. 

Specifically, the Exchange proposes to 

recognize the new Proprietary Trader 

Principal category as a limited principal 

category in Rule 1022(h). Currently, 

Exchange Rule 1021 requires all persons 

engaged or to be engaged in the 

investment banking or securities 

business of a member who are to 

function as principals shall be registered 

as such with the Exchange in the 

category of registration appropriate to 

the function to be performed as 

specified in Rule 1022. Before their 

registration can become effective, they 

shall pass a Qualification Examination 

for Principals appropriate to the 

mstockstill on DSK4VPTVN1PROD with NOTICES

50280 Federal Register / Vol. 76, No. 156 / Friday, August 12, 2011 / Notices 

5BX Rule 1032(b). See SR–BX–2011–051. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78(c)(3)(B) [sic]. 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). 

11 Id. 

12 Id. 

category of registration as specified by 

the Exchange Board. Pursuant to Rule 

1021(b), persons associated with a 

member, enumerated in subparagraphs 

(1) through (5) hereafter, who are 

actively engaged in the management of 

the member’s investment banking or 

securities business, including 

supervision, solicitation, conduct of 

business or the training of persons 

associated with a member for any of 

these functions are designated as 

principals. Such persons shall include: 

(1) Sole Proprietors; (2) Officers; 

(3) Partners; (4) Managers of Offices of 

Supervisory Jurisdiction, and 

(5) Directors of Corporations. 

Rule 1021(e), Requirement of Two 

Registered Principals for Members, 

spells out that an Exchange member, 

except a sole proprietorship, shall have 

at least two officers or partners who are 

registered as principals with respect to 

each aspect of the member’s investment 

banking and securities business 

pursuant to the applicable provisions of 

Rule 1022; provided, however, that a 

proprietary trading firm with 25 or 

fewer registered representatives shall 

only be required to have one officer or 

partner who is registered as a principal. 

Rule 1022 lists the categories of 

principal registration. In addition to 

‘‘General Securities Principal,’’ which is 

the broadest category, there are two 

limited categories of principal 

registration: Financial and Operations, 

and General Securities Sales Supervisor. 

The Exchange proposes to add 

another category of limited principal. 

The new Proprietary Trader Principal 

category would be available for persons 

whose supervisory responsibilities in 

the investment banking and securities 

business are limited to the activities of 

a member that involve proprietary 

trading. Furthermore, it would require 

that he or she be registered pursuant to 

Exchange rules as a Proprietary Trader,5

be qualified to be so registered by 

passing the Series 24 examination, and 

not function in a principal capacity with 

responsibility over any area of business 

activity other than proprietary trading. 

The Exchange has been working with 

other exchanges and the Financial 

Industry Regulatory Authority 

(‘‘FINRA’’) to develop this registration 

category. This category is in lieu of 

registration as a General Securities 

Principal, for which the prerequisite 

qualification examination is the Series 

7. The appropriate qualification 

examination for the proposed new 

registration category of Proprietary 

Trader Principal is the Series 24, which 

is the same qualification required for 

registration as a General Securities 

Principal; no new examination has been 

developed. However, the prerequisite 

examination for the new Proprietary 

Trader Principal category is the new 

Series 56. Accordingly, a person who 

has passed the Series 56 can register as 

a Proprietary Trader Principal and take 

the Series 24 examination, under this 

proposal, but cannot register as a 

General Securities Principal without 

first qualifying as a General Securities 

Representative and passing the Series 7. 

Thus, although the Series 24 will now 

be the appropriate qualification 

examination for both categories (General 

Securities Principal and Proprietary 

Trader Principal), different prerequisites 

apply and different registration 

categories result. 

The Exchange believes that the new 

principal registration category is an 

appropriate corollary to the new 

Proprietary Trader representative 

registration category, filed separately, 

and reflects a substantial joint-exchange 

effort to develop a registration 

framework specific to principals 

supervising persons engaged in 

proprietary trading, market making and 

effecting transactions on behalf of 

broker-dealers. Furthermore, BX 

believes that the Series 24 is the 

appropriate examination for Proprietary 

Trader Principals, because it tests 

knowledge and understanding of 

supervision-related rules. 

The Proprietary Trader Principal 

registration counts towards the two 

principal requirements in Rule 1021(e). 

The Exchange believes that this is 

appropriate because the same 

comprehensive qualification 

examination, the Series 24, is required. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 6 in general, and furthers the 

objectives of: (1) Section 6(c)(3)(B) of the 

Act,7 pursuant to which a national 

securities exchange prescribes standards 

of training, experience and competence 

for members and their associated 

persons; and (2) Section 6(b)(5) of the 

Act,8 in that it is designed, among other 

things, to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, 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, by 

offering a new, limited principal 

registration category to Exchange 

members. The Exchange believes that 

the requirements of this new category 

should help ensure that principals who 

supervise proprietary traders and 

proprietary trading are, and will 

continue to be, properly trained and 

qualified to perform their functions, 

because the new Proprietary Trader 

Principal category is limited and 

tailored to persons supervising 

proprietary trading functions. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

BX 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. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Pursuant to Section 19(b)(3)(A) of the 

Act 9 and Rule 19b–4(f)(6) 10 thereunder, 

the Exchange has designated this 

proposal as one that effects a change 

that: (i) Does not significantly affect the 

protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) 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. Rule 19b–4(f)(6) 11

requires a self-regulatory organization to 

give the Commission written notice of 

its intent to file 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 

Exchange has satisfied this requirement. 

Under Rule 19b–4(f)(6) of the Act,12 a 

proposal does not become operative for 

30 days after the date of its filing, or 

such shorter time as the Commission 

may designate if consistent with the 

protection of investors and the public 

interest. The Exchange requests that the 

Commission waive the 30 day operative 

period for this filing so that it may 

become effective and operative upon 

filing with the Commission pursuant to 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 76, No. 156 / Friday, August 12, 2011 / Notices 50281 

13 15 U.S.C. 78s(b)(3)(A). 

14For purposes only of waiving the operative 

delay of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). See also 17 CFR 200.30–3(a)(59). 

15 17 CFR 200.30–3(a)(12). 

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). 

Section 19(b)(3)(A) 13 of the Act and 

subparagraph (f)(6) thereunder. The 

Commission believes waiving the 30- 

day operative delay is consistent with 

the protection of investors and the 

public interest as the waiver will allow 

the Exchange to make the new 

registration category available near the 

same time as other exchanges.14 The 

Commission, therefore, designates the 

proposal to be operative upon filing 

with the Commission. 

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 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–BX–2011–053 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–BX–2011–053. 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 the 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–BX–2011–053 and should 

be submitted on or before September 2, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–20580 Filed 8–11–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65055; File No. SR– 

NASDAQ–2011–106] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Adopt a 

Limited Category of Principal 

Registration for Proprietary Traders 

August 8, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’)1, and Rule 19b–42 thereunder, 

notice is hereby given that on August 1, 

2011, The NASDAQ Stock Market LLC 

(the ‘‘Exchange’’ or ‘‘NASDAQ’’) filed 

with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I and II below, which Items 

have been prepared by the Exchange. 

The Exchange filed the 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) 

thereunder.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NASDAQ is filing with the 

Commission a proposal to amend 

NASDAQ Rule 1022, Categories of 

Principal Registration, to adopt a new 

limited category of principal registration 

for proprietary traders, as described 

further below. NASDAQ will implement 

the proposal upon notice to its 

membership. 

The text of the proposed rule change 

is available at 

http://nasdaq.cchwallstreet.com/, at 

NASDAQ’s principal office, 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 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 purpose of the proposed rule 

change is to recognize a new category of 

limited principal registration. 

Specifically, NASDAQ proposes to 

recognize the new Proprietary Trader 

Principal category as a limited principal 

category in Rule 1022(h). Currently, 

NASDAQ Rule 1021 requires all persons 

engaged or to be engaged in the 

investment banking or securities 

business of a member who are to 

function as principals shall be registered 

as such with NASDAQ in the category 

of registration appropriate to the 

function to be performed as specified in 

Rule 1022. Before their registration can 

become effective, they shall pass a 

Qualification Examination for Principals 

appropriate to the category of 

registration as specified by the 

NASDAQ Board. Pursuant to Rule 

1021(b), persons associated with a 

member, enumerated in subparagraphs 

(1) through (5) hereafter, who are 

actively engaged in the management of 

mstockstill on DSK4VPTVN1PROD with NOTICES