[Federal Register Volume 77, Number 40 (Wednesday, February 29, 2012)]
[Notices]
[Pages 12345-12347]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-4766]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66453; File No. SR-NYSEAMEX-2012-11]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending 
Registration Requirements for Traders

February 23, 2012.
    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 February 9, 2012, NYSE Amex LLC (the ``Exchange'' or ``NYSE 
Amex'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization (``SRO''). The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
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)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its registration requirements for 
traders. The text of the proposed rule change is available at the 
Exchange, the Commission's Public Reference Room, and www.nyse.com.

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

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its registration requirements for 
traders.\5\
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    \5\ The Exchange's affiliate, NYSE Arca, Inc., has submitted a 
substantially similar rule filing. See SR-NYSEAMEX-2012-11.
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Background

    NYSE Amex Options Rule 341(a) currently provides that no member or 
member organization shall permit any natural person to perform 
regularly any

[[Page 12346]]

of the duties normally performed by a (i) Registered representative, 
(ii) securities lending representative, (iii) securities trader or (iv) 
direct supervisor of any such individual unless such person has been 
registered with, qualified by and approved by the Exchange. Commentary 
.01 to NYSE Amex Options Rule 341 defines ``securities trader'' as any 
person engaged in the purchase or sale of securities or other similar 
instruments for the account of a member or member organization with 
which he is associated, as an employee or otherwise, and who does not 
transact any business with the public. A securities trader must pass 
the Series 7 examination and is registered as a General Securities 
Representative.\6\
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    \6\ Market Makers and Market Maker Authorized Trader [sic] are 
subject to separate registration requirements that are found in NYSE 
Rules 921NY and 921.1NY.
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Proposal

    As part of the proposed rule change, the Exchange proposes to 
delete the word ``regularly'' from NYSE Amex Options Rule 341(a). The 
Exchange is making this threshold change to the registration 
requirement in the rule because it believes that registration is 
required whenever the activities set forth in the rule are performed, 
even if it would be on an irregular basis.
    In addition, the Exchange proposes to create a new, alternative 
limited registration category for Proprietary Traders that would be 
reflected in NYSE Amex Options Rule 341(a) and Commentary .01 to that 
Rule. The Exchange has been working with other SROs, some of which have 
recently enhanced their registration requirements for associated 
persons,\7\ to develop the content outline and the qualification 
examination, the Series 56, which would be applicable to Proprietary 
Traders. Certain exchanges have submitted filings to the Commission to 
utilize the Series 56.\8\ The Exchange expects to describe the Series 
56 in detail and submit the content outline for it to the Commission in 
a separate filing, as well as make the examination and alternative 
registration category available in Web CRD.\9\ Accordingly, the 
Exchange is amending its rules to recognize the Proprietary Trader 
registration category and the Series 56.
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    \7\ See Securities Exchange Act Release Nos. 63843 (Feb. 4, 
2011), 76 FR 7884 (Feb. 11, 2011) (SR-ISE-2010-115); and 63314 (Nov. 
12, 2010), 75 FR 70957 (Nov. 19, 2010) (SR-CBOE-2010-084).
    \8\ See e.g., Securities Exchange Act Release No. 64699 (June 
17, 2011) 76 FR 36945 (June 23, 2011) (SR-CBOE-2011-056).
    \9\ Web CRD is the central licensing and registration system for 
the U.S. securities industry and its regulators.
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    Under the proposed rule change, the Exchange would rename the 
category ``securities trader'' as ``Proprietary Trader.'' A Proprietary 
Trader would be required to be registered as such on Web CRD and pass 
the Series 56 examination described above, but would not be permitted 
to function in an agency capacity or otherwise conduct a public 
business in securities.\10\
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    \10\ The Exchange proposes to add language to the definition of 
``Proprietary Trader'' to specify that the definition does not 
include individuals required to be registered as Market Makers or 
Market Maker Authorized Traders. See supra note 6.
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    The Exchange believes that the alternative limited registration 
category and qualification examination are appropriate because they are 
tailored to proprietary trading functions. Presently, persons engaged 
in proprietary trading on the Exchange are required to pass the Series 
7, which the Exchange believes covers a great deal of material that is 
not relevant to proprietary trading functions. Instead, the Series 56 
covers both equities and options trading rules, but not all of the 
rules that are applicable to firms and persons conducting a public 
business.
    Securities traders currently associated with member organizations 
have previously passed the Series 7. The proposed rule change would not 
require those individuals currently acting as securities traders who 
have already passed the Series 7 to register under the new category as 
Proprietary Traders or to pass the Series 56 because the Exchange 
believes this would be redundant. Persons who have passed the Series 7 
may, of course, engage in proprietary trading because the new 
Proprietary Trader registration category is a limited registration 
category. Thus, the proposal would not preclude associated persons from 
registering as General Securities Representatives and passing the 
Series 7 examination and then engaging in proprietary trading.
    The Exchange expects that individuals might consider the category 
once it and the Series 56 examination become available for use by NYSE 
Amex on Web CRD. Accordingly, the Exchange believes that the category 
should be helpful to registering those individuals conducting a 
business in proprietary trading, while at the same time preserving the 
important goals of appropriate registration and qualification for 
persons in the securities business. Additionally, member organizations 
that hire new associated persons might choose to register them in the 
category.
    The proposed rule change is not intended to replace the Series 7 
requirement for all traders, but simply to offer an alternative to that 
requirement on a going-forward basis for those qualified individuals 
who solely conduct a business in proprietary trading and have shown 
their proficiency by successfully passing the Series 56.
    The Exchange also proposes technical and conforming changes to NYSE 
Amex Options Rules 6, 8, 340 (and Commentary .03 thereto), and 341B to 
substitute ``Proprietary Trader'' for ``securities trader.''
    Finally, the Exchange notes that Proprietary Traders would be 
subject to the continuing education requirements of NYSE Amex Options 
Rule 341A.\11\
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    \11\ Under Commentary .01 of that Rule, registered persons whose 
activities are limited solely to the transaction of business on the 
Floor with members or registered broker-dealers are not subject to 
continuing education requirements. The Exchange intends to submit a 
separate filing in the future to apply continuing education 
requirements to such persons so that all registered persons would be 
subject to continuing education.
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Compliance Date

    Following effectiveness of the proposed rule change, the Exchange 
will issue a Regulatory Bulletin announcing the compliance date within 
30 days from the operative date of the rule change.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Securities Exchange Act of 1934 (``Act'') \12\ in general, 
and furthers the objectives of (1) Section 6(c)(3)(B) of the Act,\13\ 
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,\14\ 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. The Exchange believes that adopting 
new registration requirements for associated persons of member 
organizations who are acting in the capacity of a trader and by 
offering an alternative limited registration category for Proprietary 
Traders should help ensure that all associated persons engaged in a 
securities business are, and will

[[Page 12347]]

continue to be, properly registered, trained and qualified to perform 
their functions.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(c)(3)(B).
    \14\ 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 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

    Because the foregoing proposed rule does not (i) significantly 
affect the protection of investors or the public interest; (ii) impose 
any significant burden on competition; and (iii) become operative for 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate if consistent with the protection of 
investors and the public interest, provided that the self-regulatory 
organization has given 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 proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6).
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    The Commission believes it is consistent with the protection of 
investors and the public interest to waive the 30-day operative delay. 
Waiver of the 30-day operative delay will help ensure registration of 
all associated persons of member firms performing certain duties on the 
Exchange, even if certain activities performed on the Exchange are not 
done by such persons on a regular basis. In addition, waiver of the 
operative delay will enable associated persons of Exchange firms to 
avail themselves of the limited Proprietary Trader registration 
category, and qualify by taking the Series 56, as soon as it becomes 
available. Finally, the technical changes will add clarity to NYSE 
Amex's rules. For these reasons, the Commission hereby waives the 30-
day operative delay.\17\
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    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of such 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

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#ef9d9a838ac28c8082828a819b9caf9c8a8cc1888099"><span class="__cf_email__" data-cfemail="0a787f666f27696567676f647e794a796f69246d657c">[email protected]</span></a>. Please include 
File Number SR-NYSEAMEX-2012-11 on the subject line.

Paper Comments

    <bullet> 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-NYSEAMEX-2012-11. 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 Section, 100 F Street 
NE., Washington, DC 20549 on official business days between 10 a.m. and 
3 p.m. Copies of the filing will also be available for inspection and 
copying at the NYSE's principal office and on its Internet Web site at 
www.nyse.com. 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-
NYSEAMEX-2012-11 and should be submitted on or before March 21, 2012.


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-4766 Filed 2-28-12; 8:45 am]
BILLING CODE 8011-01-P


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