Federal Register / Vol. 77, No. 40 / Wednesday, February 29, 2012 / Notices 12345 

92With respect to the concern that any attempt to 

pass through the fee would be based on estimates, 

and that setting up a system to track charges to 

customers would disproportionately burden small 

firms, the Commission notes that the proposed rule 

change does not require FINRA members to pass the 

fee through to their customers. 

93See 15 U.S.C. 77s(g). Further, as discussed 

above, one commenter pointed out that, by 

allocating the GASB Accounting Support Fee 

among FINRA members, the proposed rule change 

could eliminate conflicts of interest for entities that 

collect sums from state and local governments for 

the funding of GASB, but that also participate in 

commenting on the policy decisions developed by 

GASB. 

94With respect to the comment that the proposed 

rule change is inconsistent with how FASB is 

funded, the Commission notes that the allocation, 

assessment, and collection of the GASB Accounting 

Support Fee, unlike the FASB fee, is governed by 

Section 19(g) of the Securities Act. 

95See 15 U.S.C. 77s(g)(1). 

96The Commission notes that FINRA has 

proposed to publish a Regulatory Notice each year 

disclosing the total annual GASB Accounting 

Support Fee that it would collect for that year and 

an estimated fee rate, and that the Regulatory Notice 

would remind any firms choosing to pass through 

the fee of the need for proper disclosure of the 

GASB Accounting Support Fee, including, if 

applicable, the fact that the fee is an estimate and 

that the firm ultimately may pay more or less than 

the fee charged to the customer. In addition, FINRA 

has stated that any disclosure used by the firm 

cannot be misleading and must comport with 

FINRA rules, including just and equitable 

principles of trade, as well as any applicable MSRB 

rules. 

97See 15 U.S.C. 77s(g)(5)(B)(i). 

98Based on FINRA’s response to comments in the 

Notice and the response letter, the Commission 

believes that it is reasonable for FINRA to not 

amend its process for collecting its TAF to include 

the GASB Accounting Support Fee. 

99 15 U.S.C. 78s(b)(2). 

100 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)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5The Exchange’s affiliate, NYSE Arca, Inc., has 

submitted a substantially similar rule filing. See 

SR–NYSEAMEX–2012–11. 

Commission notes that FINRA members 

that do not fall within the de minimis 

exemption will be equitably allocated a 

portion of the fee based on an objective 

measure of their participation in the 

municipal securities market.92

With respect to the comments that the 

proposed GASB Accounting Support 

Fee is inequitable because it is only 

imposed on broker-dealers, but not 

others who may benefit from GASB’s 

activities, the Commission notes that 

Section 19(g) of the Securities Act 

provides that the Commission may 

require a registered national securities 

association to establish rules and 

procedures to provide for the equitable 

allocation, assessment, and collection of 

the GASB Accounting Support Fee from 

its members.93 As such, consistent with 

the statutory language, FINRA may only 

impose the GASB Accounting Support 

Fee on its members, even though other 

entities may benefit from GASB’s 

activities. 

Further, in connection with the 

comments regarding whether FINRA 

members should be allowed to pass 

through the GASB Accounting Support 

Fee, the Commission notes that how 

FINRA members recoup their 

expenditures is not the subject of 

Section 19(g) of the Securities Act or 

FINRA’s proposed rule change.94

Consistent with Section 19(g)(1) of the 

Securities Act,95 the GASB Accounting 

Support Fee will be allocated and 

assessed to, and collected from, FINRA 

members.96

With respect to the concerns that 

there would be no oversight of the 

amount of the GASB Accounting 

Support Fee to be collected and the use 

of the money, the Commission notes 

that Section 19(g)(5)(B)(i) of the 

Securities Act specifically states that 

Section 19 does not provide the 

Commission or any national securities 

association with direct or indirect 

oversight of the budget or technical 

agenda of the GASB.97

With respect to comments regarding 

the $50,000 fee for FINRA to administer 

the GASB Accounting Support Fee, the 

Commission notes that according to 

FINRA, the fee was negotiated with FAF 

and is based on estimated costs to 

FINRA. Further, FINRA stated that this 

fee may increase or decrease, if 

necessary, based on yearly reviews in 

light of FINRA’s experience in assessing 

and collecting the GASB Accounting 

Support Fee and the actual costs 

incurred by FINRA. As such, the 

Commission believes that the $50,000 

administrative fee is not unreasonable.98

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,99 that the 

proposed rule change (SR–FINRA– 

2011–073) be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.100

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–4767 Filed 2–28–12; 8:45 am] 

BILLING CODE 8011–01–P 

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 ‘‘noncontroversial’’ 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. 

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

Background 

NYSE Amex Options Rule 341(a) 

currently provides that no member or 

member organization shall permit any 

natural person to perform regularly any 


tkelley on DSK3SPTVN1PROD with NOTICES
12346 Federal Register / Vol. 77, No. 40 / Wednesday, February 29, 2012 / Notices 

6Market Makers and Market Maker Authorized 

Trader [sic] are subject to separate registration 

requirements that are found in NYSE Rules 921NY 

and 921.1NY. 

7See 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). 

8See e.g., Securities Exchange Act Release No. 

64699 (June 17, 2011) 76 FR 36945 (June 23, 2011) 

(SR–CBOE–2011–056). 

9Web CRD is the central licensing and 

registration system for the U.S. securities industry 

and its regulators. 

10The 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. 

11Under 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. 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(c)(3)(B). 

14 15 U.S.C. 78f(b)(5). 

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

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. 

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

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

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 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 40 / Wednesday, February 29, 2012 / Notices 12347 

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

16 17 CFR 240.19b–4(f)(6). 

17For 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). 

18 17 CFR 200.30–3(a)(12). 

1 15 U.S.C.78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4 15 U.S.C. 78s(b)(3)(A)(iii). 

5 17 CFR 240.19b–4(f)(6). 

continue to be, properly registered, 

trained and qualified to perform their 

functions. 

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

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

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 

• 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 Number SR– 

NYSEAMEX–2012–11 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–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

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–4766 Filed 2–28–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66452; File No. SR– 

NYSEARCA–2012–15] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Registration 

Requirements for Traders and 

Removing Obsolete References to 

Paper Registration Submissions 

February 23, 2012. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on February 

9, 2012, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) 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. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 4 and 

Rule 19b–4(f)(6) thereunder,5 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. 

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 and 


tkelley on DSK3SPTVN1PROD with NOTICES