19042 Federal Register / Vol. 77, No. 61 / Thursday, March 29, 2012 / Notices 

3See CBOE Fees Schedule, Section 11. 

4 15 U.S.C. 78f(b). 

5 15 U.S.C. 78f(b)(4). 

6See Note 3. 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

proposes increasing the fees in order to 

recoup such costs. Further, these 

changes will make these fee amounts 

equivalent to corresponding fees on the 

Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’).3

The Exchange also proposes waiving 

Renewal fees for a six-month period 

beginning on April 1, 2012. The 

Renewal fee is assessed to organizations 

and sole proprietorships that were once 

C2 Trading Permit Holders but gave up 

their trading permits, and now want to 

return. The Exchange proposes waiving 

the Renewal fee for a six-month period 

beginning on April 1, 2012 in order to 

provide an incentive to former C2 

Trading Permit Holders to return to C2. 

The proposed changes are to take 

effect April 1, 2012. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.4 Specifically, 

the Exchange believes the proposed rule 

change is consistent with Section 6(b)(4) 

of the Act,5 which provides that 

Exchange rules may provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

Trading Permit Holders and other 

persons using its facilities. The 

proposed increases in TPH Application 

fees are reasonable because such 

increases are necessary to cover the 

increased costs of processing such 

applications and activities. The 

proposed increases in TPH Application 

fees are equitable and not unfairly 

discriminatory because they apply 

equally to all qualifying market 

participants. Further, these changes will 

make these fee amounts equivalent to 

corresponding fees on CBOE.6

The proposed waiver of the Renewal 

fees for a six-month period beginning on 

April 1, 2012 is reasonable because it 

will permit former C2 Trading Permit 

Holders to avoid having to pay a fee 

they would otherwise have to pay to 

return to C2. The proposed waiver of the 

Renewal fees for a six-month period 

beginning on April 1, 2012 is equitable 

and not unfairly discriminatory because 

it will apply equally to all former C2 

Trading Permit Holders who wish to 

return to C2. Moreover, this waiver will 

encourage former C2 Trading Permit 

Holders to return to C2, which will in 

turn bring greater liquidity and more 

trading opportunities for all market 

participants. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

C2 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 

The Exchange neither solicited nor 

received 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) 7 of the Act and paragraph (f) 

of Rule 19b–4 8 thereunder. 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 email to rulecomments@sec.gov. Please include File 

Number SR–C2–2012–010 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–C2–2012–010. 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 

a.m. and 3 p.m. Copies of such filing 

will also 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 No. SR–C2–2012– 

010 and should be submitted on or 

before April 19, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–7525 Filed 3–28–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66645; File No. SR–PHLX– 

2012–37] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX LLC Relating to the 

Proprietary Traders Qualification 

Examination (‘‘Series 56’’) 

March 22, 2012. 

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 March 21, 

2012, NASDAQ OMX PHLX LLC 

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

Securities and Exchange Commission 

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

rule change as described in Items I, II, 

and III below, which Items have been 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 77, No. 61 / Thursday, March 29, 2012 / Notices 19043 

3See Securities Exchange Act Release No. 66497 

(March 1, 2012), 77 FR 13668 (March 7, 2012) (SR– 

Phlx–2012–23). 

4See e.g., Securities Exchange Act Release Nos. 

63843 (February 4, 2011), 76 FR 7884 (February 11, 

2011) (SR–ISE–2010–115); and 63314 (November 

12, 2010), 75 FR 70957 (November 19, 2010) (SR– 

CBOE–2010–084). 

5Proprietary trading firms don not have 

customers. 

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

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

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) 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. 

prepared by the Exchange. 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 is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) the content outline and 

selection specifications for the 

Proprietary Traders Qualification 

Examination (‘‘Series 56’’) program. 

Phlx will implement the proposal upon 

notice to its membership. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, 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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Recently, Phlx filed a proposed rule 

change to recognize a new category of 

limited representative registration for 

proprietary traders.3 Specifically, Phlx 

will recognize the new registration 

category ‘‘Proprietary Trader’’ and the 

new examination, the Series 56. The 

new Proprietary Trader category would 

be limited to persons engaged solely in 

proprietary trading, market making or 

effecting transactions on behalf of a 

broker-dealer account. 

The Exchange has been working with 

the Financial Industry Regulatory 

Authority (‘‘FINRA’’) and certain other 

markets, many of which have recently 

enhanced their registration 

requirements to require the registration 

of associated persons,4 to develop the 

content outline and qualification 

examination that would be applicable to 

proprietary traders. The Series 56 

examination program is shared by Phlx 

and the following: Boston Options 

Exchange; C2 Options Exchange, 

Incorporated; Chicago Board Options 

Exchange, Incorporated; Chicago Stock 

Exchange, Inc.; International Securities 

Exchange, LLC; The NASDAQ Stock 

Market LLC; National Stock Exchange, 

Inc.; New York Stock Exchange LLC; 

NYSE AMEX LLC; and NYSE ARCA, 

Inc. FINRA staff convened a committee 

of industry representatives and staff of 

the various markets to develop the 

criteria for the Series 56 examination 

program. 

The Series 56 examination tests a 

candidate’s knowledge of proprietary 

trading generally and the industry rules 

applicable to trading of equity securities 

and listed options contracts. The Series 

56 examination covers, among other 

things, recordkeeping and recording 

requirements, types and characteristics 

of securities and investments, trading 

practices and display execution and 

trading systems. While the examination 

is primarily dedicated to topics related 

to proprietary trading, the Series 56 

examination also covers a few general 

concepts relating to customers.5

The qualification examination 

consists of 100 multiple choice 

questions. Candidates will have 150 

minutes to complete the exam. The 

content outline describes the following 

topical sections comprising the 

examination: Personnel, Business 

Conduct and Recordkeeping and 

Reporting Requirements, 9 questions; 

Markets, Market Participants, 

Exchanges, and Self-Regulatory 

Organizations, 8 questions; Types and 

Characteristics of Securities and 

Investments, 20 questions; Trading 

Practices and Prohibited Acts, 50 

questions; and Display, Execution, and 

Trading Systems, 13 questions. 

Representatives from the applicable 

markets intend to meet on a periodic 

basis to evaluate and, as necessary, 

update the Series 56 examination 

program. 

The Exchange understands that the 

other applicable markets will also file 

with the Commission similar filings 

regarding the Series 56 examination 

program. The Exchange proposes to 

implement the Series 56 examination 

program upon availability in WebCRD, 

notification to its membership and 

approval of SR–Phlx–2012–23. 

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 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, in particular, by offering a new 

qualification examination for 

proprietary traders. This filing provides 

the content outline and relevant 

specifications for the Series 56 

examination program, which should 

help ensure that all associated persons 

engaged in a securities business are, and 

will continue to be, properly 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 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 

Because the foregoing proposed rule 

change 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 after the date of 

the filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to 19(b)(3)(A) 

of the Act 8 and Rule 19b–4(f)(6) 9

thereunder. 

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 

mstockstill on DSK4VPTVN1PROD with NOTICES

19044 Federal Register / Vol. 77, No. 61 / Thursday, March 29, 2012 / Notices 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

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 rulecomments@sec.gov. Please include File 

Number SR–PHLX–2012–37 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–PHLX–2012–37. 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 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal offices 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–PHLX– 

2012–37, and should be submitted on or 

before April 19, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–7571 Filed 3–28–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66652; File No. SR– 

NASDAQ–2012–038] 

Self-Regulatory Organizations; the 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Rule 

4120 

March 23, 2012. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on March 19, 

2012, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or ‘‘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 the Exchange. 

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 proposing to amend Rule 

4120 to adopt a modification in the 

process for initiating trading of a 

security that is the subject of an initial 

public offering (an ‘‘IPO’’) on NASDAQ. 

The text of the proposed rule change is 

available at http://nasdaq.cchwallstreet.

com/, at the Exchange’s principal office, 

on the Commission’s Web site at 

http://www.sec.gov/, 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ is proposing to make a 

minor modification to its process for 

commencing trading of a security that is 

the subject of an IPO on NASDAQ. Rule 

4120(a)(7) provides that trading in an 

IPO security is halted until the security 

is released for trading. Rule 

4120(c)(7)(B) establishes the process for 

lifting the halt and commencing trading. 

Under that rule, prior to terminating the 

halt, there is a 15-minute Display-Only 

Period during which market 

participants may enter quotes and 

orders into the NASDAQ Market Center. 

At the conclusion of the Display-Only 

Period, trading commences through the 

halt cross process provided for in Rule 

4753. However, if at the end of a 

Display-Only Period, NASDAQ detects 

an order imbalance in the security, the 

halt may be extended for up to six 

additional Display-Only Periods of five 

minutes each. 

Under the current process, quotes and 

orders in the IPO security may not be 

entered until the commencement of the 

Display-Only Period. However, 

NASDAQ believes that the quality of its 

process for commencing IPO trading 

would be enhanced by allowing market 

participants to begin entering orders at 

7 a.m., to be held and not displayed 

until the beginning of the Display-Only 

Period. Specifically, NASDAQ believes 

that this change will provide for a 

greater number of orders being entered 

prior to commencement of trading, 

resulting in a higher level of order 

interaction at the open. 

To effect this change, NASDAQ 

proposes amending Rule 4120(c)(7)(B) 

to provide that beginning at 7 a.m., 

market participants may enter Market 

Hours Day Orders (‘‘MDAY Orders’’) in 

a security that is the subject of an IPO 

on NASDAQ and designate such orders 

to be held until the beginning of the 

Display-Only Period. Such orders will 

be held in an undisplayed state until the 

beginning of the Display-Only Period, at 

which time they will be entered into the 

system. Market participants may cancel 

orders entered in this manner in the 

same way they would cancel any other 

order. Orders entered prior to the 

Display-Only Period will be cancelled 

mstockstill on DSK4VPTVN1PROD with NOTICES