Federal Register / Vol. 77, No. 69 / Tuesday, April 10, 2012 / Notices 21603 

3 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Under Chapter 1, Section 1(a)(3) of the BOX 

Rules, the term ‘‘associated person’’ or ‘‘person 

associated with a Participant’’ means any partner, 

officer, director or branch manager of [sic] Options 

Participant (or any person occupying a similar 

status or performing similar functions), any person 

directly or indirectly controlling, controlled by, or 

under common control with a Participant or any 

employee of a Participant. This filing refers 

specifically to the classification of ‘‘individual 

associated persons’’ as an organization could fall 

within the scope of this definition, and it is not 

BOX’s intention to require registration by an 

organization. 

4 17 CFR 240.15b7–1. 

5 15 U.S.C. 78a et seq. 

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–ICC–2012–06 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–ICC–2012–06. 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 the hours of 10 

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

will also be available for inspection and 

copying at the principal office of ICC 

and on ICC’s Web site at https:// 

www.theice.com/publicdocs/ 

regulatory_filings/ 

ICEClearCredit_032712.pdf. 

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–ICC–2012–06 and should 

be submitted on or before May 1, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.3

Kevin O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8520 Filed 4–9–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66733; File No. SR–BX– 

2012–020] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

of Proposed Rule Change Regarding 

Registration, Qualification, and 

Continuing Education Requirements 

for Associated Persons 

April 4, 2012. 

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

Securities Exchange Act of 1934 

(‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule 

19b–4 thereunder,2 notice is hereby 

given that on March 21, 2012, NASDAQ 

OMX BX, Inc. (‘‘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 selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Rules of the Boston Options Exchange 

Group, LLC (‘‘BOX’’) regarding the 

registration of associated persons. The 

text of the proposed rule change is 

available from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s Internet Web site at http:// 

nasdaqomxbx.cchwallstreet.com/ 

NASDAQOMXBX/Filings/. 

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 these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization 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 Exchange is proposing to amend 

its rules regarding qualification, 

registration and continuing education of 

individual associated persons.3

Specifically, in response to a request by 

the Division of Trading and Markets of 

the U.S. Securities and Exchange 

Commission, the Exchange is proposing 

to expand its registration and 

qualification requirements to include 

additional types of individual 

associated persons. The Exchange 

believes the proposed rule change is 

consistent with Rule 15b7–1,4

promulgated under the Securities 

Exchange Act of 1934, as amended 

(‘‘Exchange Act’’),5 which provides: ‘‘No 

registered broker or dealer shall effect 

any transaction in * * * any security 

unless any natural person associated 

with such broker or dealer who effects 

or is involved in effecting such 

transaction is registered or approved in 

accordance with the standards of 

training, experience, competence, and 

other qualification standards* * * 

established by the rules of any national 

securities exchange * * *’’ 

Currently, an individual person 

engaged only in proprietary trading or 

submitting quotations or orders for a 

BOX Market Maker is not subject to a 

registration requirement under the BOX 

Rules. One purpose of this proposed 

rule change is to recognize new 

categories of registration that will 

subject such individuals to such a 

requirement. Proposed Chapter II, 

Section 8 establishes the qualification 

and registration requirements for 

associated persons of Participants, and 

recognizes a new category of limited 

representative registration for 

proprietary traders. Proposed changes to 

Chapter VI, Section 2 establish the 

qualification and registration 

requirements for individual persons, 

Market Maker Authorized Traders 


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6Persons with similar functions at other 

Exchanges are subject to registration requirements. 

See, e.g., Rule 801 of the International Securities 

Exchange, LLC (‘‘ISE’’), Rule 11.6 of BATS 

Exchange, Inc., and Rule 6.34A of the NYSE Arca, 

Inc. 

7 17 CFR 240.15c3–1. 

8These proposed rule changes are consistent with 

those previously adopted by the Chicago Board of 

Options Exchange (‘‘CBOE’’) and International 

Securities Exchange, LLC (‘‘ISE’’). See Securities 

Exchange Act Release Nos. 62977 (September 22, 

2010), 75 FR 59773 (September 28, 2010) (‘‘CBOE 

Registration Proposal’’); 63314 (November 12, 

2010), 75 FR 70957 (November 19, 2010) (‘‘CBOE 

Approval Order’’), and 63843 (February 4, 2011), 76 

FR 7884 (February 11, 2011) (‘‘ISE Approval 

Order’’). 

9Proposed Chapter II, Section 8 specifies that 

individual associated persons of a Participant that 

conducts a public customer business, including 

Registered Options Principals and Registered 

Representatives, are also subject to the registration 

requirements set forth in Chapter XI, Sections 2 and 

3 of the BOX Rules. It also specifies that individual 

persons entering quotations or orders for a 

Participant registered as a BOX Market Maker must 

also comply with the registration requirements set 

forth in Chapter VI, Section 2 of the BOX Rules for 

Market Maker Authorized Traders. 

10Under the proposal, each individual associated 

person subject to the registration requirements in 

proposed Chapter II, Section 8 will be required to 

electronically file a Uniform Application for 

Securities Industry Registration (‘‘Form U4’’) 

through Web CRD. 

11An individual with an indirect ownership 

interest in a Participant that is engaged in the 

securities business of such Participant is required 

to register under proposed Chapter II, Section 8. 

12This requirement is consistent with FINRA’s 

registration requirement for ‘‘Principals’’ (as 

defined in NASD Rule 1021). BOX is declining to 

adopt the term ‘‘Principal’’ in the proposed rule 

change to avoid confusion with existing terms, such 

as ‘‘Option Principal.’’ 

13For purposes of this requirement, a Participant 

is considered to conduct only proprietary trading if 

it has the following characteristics: (i) The 

Participant is not required by Section 15(b)(8) of the 

Exchange Act to become a FINRA member but is 

a member of another registered securities exchange 

not registered solely under Section 6(g) of the 

Exchange Act; (ii) all funds used or proposed to be 

used by the Participant are the Participant’s own 

capital, traded through the Participant’s own 

accounts; (iii) the Participant does not, and will not, 

have customers; and (iv) all persons registered on 

behalf of the Participant acting or to be acting in 

the capacity of a trader must be owners of, 

employees of, or contractors to the Participant. 

14See proposed Chapter VI, Section 2. 

15See Securities Exchange Act Rel. No. 64699, 

(June 17, 2011), 76 FR 36945 (June 23, 2011), (SR– 

CBOE–2011–056) Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change to Adopt the 

Selection Specifications and Content Outline for the 

Proprietary Traders Examination Program (Series 

56). The Series 56 examination recognized by the 

Exchange for the category of Proprietary Trader 

became available on Web CRD on June 20, 2011. 

16The Exchange, with other SROs, has developed 

the Series 56 examination that would be applicable 

to proprietary traders required to register under the 

proposed rule. The Exchange will submit a noncontroversial rule change to the Commission that, 

when effective, will allow the Exchange to Adopt 

the Selection Specifications and Content Outline for 

the Series 56 Examination Program [sic]. 

(‘‘MMAT’’),6 who submit quotations and 

orders to BOX on behalf of Participants 

which are registered as BOX Market 

Makers. Further, this proposed rule sets 

forth the circumstances under which the 

Exchange may suspend or withdraw the 

registration of an MMAT. 

The proposed Chapter II, Section 8 

also establishes registration 

requirements for a Chief Compliance 

Officer (‘‘CCO’’) for each Participant and 

for a Financial/Operations Principal for 

each Participant subject to Exchange Act 

Rule 15c3–1.7 Proposed Chapter II, 

Section 8 also references the registration 

requirements set forth in Chapter XI of 

the BOX Rules for associated persons of 

Participants that conduct a public 

customer business.8

Under the proposal, individual 

associated persons acting in the capacity 

of a sole proprietor, officer, partner, 

director or CCO will be subject to 

heightened qualification requirements. 

In addition, an individual associated 

person that is engaged in the 

supervision or monitoring of proprietary 

trading, market-making or brokerage 

activities and/or that is engaged in the 

supervision or training of those engaged 

in proprietary trading, market-making or 

brokerage activities will be subject to 

heightened qualification requirements. 

The Exchange believes that the 

heightened qualification requirements 

should enhance the supervisory 

structure for Participants that do not 

conduct a public customer business.9

Specifically, the Exchange is 

proposing to require additional 

associated persons to submit the 

appropriate application for registration 

online through the Central Registration 

Depository system (‘‘Web CRD’’), which 

is operated by the Financial Industry 

Regulatory Authority, Incorporated 

(‘‘FINRA’’), successfully complete the 

qualification examination(s) as 

prescribed by the Exchange and submit 

any required registration and 

examination fees.10 Proposed Chapter II, 

Section 8 will require registration and 

qualification by individual associated 

persons engaged or to be engaged in the 

securities business of a Participant.11

An individual associated person will be 

considered to be a person engaged in the 

securities business of a Participant if (i) 

the individual associated person 

conducts proprietary trading, acts as a 

market-maker, effects transactions on 

behalf of a broker-dealer account, 

supervises or monitors proprietary 

trading, market-making or brokerage 

activities on behalf of the broker-dealer, 

supervises or conducts training for those 

engaged in proprietary trading, marketmaking or brokerage activities on behalf 

of a broker-dealer account; or (ii) the 

individual associated person engages in 

the management of any individual 

associated person identified in (i) above 

as an officer, partner or director.12

The Exchange is also proposing to 

recognize a new category of limited 

representative registration for individual 

persons associated with a BOX Options 

Participant that is a ‘‘proprietary trading 

firm’’ as defined in Supplementary 

Material .07 to the proposed Section 8.13

Further, the Exchange is proposing to 

extend the registration requirements to 

Market Maker Authorized Traders, i.e., 

individual persons submitting to BOX 

quotations or orders for Participants 

registered as BOX Market Makers.14

With respect to the new qualification 

examination associated with the 

proposed rule changes,15 the Exchange 

has developed, with other selfregulatory organizations (‘‘SROs’’), the 

Series 56 examination that would be 

applicable to proprietary traders. A 

subset of individuals associated with 

Participants, those engaged only in 

proprietary trading, may use the Series 

56 examination to qualify for 

registration under the new category of 

limited representative registration as a 

proprietary trader.16 Persons who 

conduct a public customer business do 

not fit in the registration category 

proposed for proprietary traders and as 

noted in note 6 above, must continue to 

comply with the registration 

requirements in Chapter XI of the BOX 

Rules and register and be qualified by 

passing the General Securities 

Registered Examination (Series 7). The 

Exchange believes the Series 7 

examination 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 applicable to firms and persons 

conducting business with public 

customers. The Exchange will describe 

the Series 56 in greater detail in a 

separate proposed rule change and the 

Exchange will notify its Participants via 

regulatory circular that the Series 56 

examination will be acceptable for 

compliance with the requirements 

proposed in Chapter II, Section 8. 

Of course, persons registering as 

proprietary trader representatives or an 

MMAT would be subject to the 

continuing education requirements set 

forth in Chapter XI, Section 5 of the 

BOX Rules. Additionally, the Exchange 

will require all associated persons 

required to register under proposed 

Chapter II, Section 8 that are not already 

registered in Web CRD to register (i.e., 

complete a Form U4) within 60 days of 

the approval date of this filing by the 


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Federal Register / Vol. 77, No. 69 / Tuesday, April 10, 2012 / Notices 21605 

17Web CRD has been enhanced by FINRA to 

allow for general registration of applicable 

associated persons. 

18See NASD Rule 1070 (Qualification 

Examinations and Waiver of Requirements) and 

NYSE Rule 345 (Employees—Registration, 

Approval, Records). 

19The appropriate qualification examination for a 

Financial/Operations Principal is the Series 27 

exam. The appropriate qualification examination 

for a CCO is the Series 14 exam. These categories 

of registration and the accompanying qualification 

examinations are available to the Exchange through 

Web CRD. 

20The duties of a Financial/Operations Principal 

include taking appropriate actions to assure that the 

Participant complies with applicable financial and 

operational requirements under SRO rules and the 

Exchange Act. The Exchange notes that it is not the 

Designated Examining Authority for any BOX 

Participant, but for consistency with other SRO 

rules, is proposing to include the designation of a 

Financial/Operations Principals in the BOX Rules. 

21With the exception of its application to sole 

proprietors, this requirement is consistent with the 

registration requirement set forth in NASD Rule 

1021 addressing registration of two Principals (as 

defined in NASD Rule 1021). 

U.S. Securities and Exchange 

Commission.17

This proposal does not require 

proprietary traders or MMATs who have 

already registered and have passed the 

Series 7 examination to register under 

the new proprietary trader category or to 

pass the Series 56 because the Exchange 

believes this would be redundant. 

Persons whom are registered with the 

Exchange and have passed the Series 7 

may, of course, perform the functions of 

a proprietary trader or MMAT, because 

these new registration categories are 

limited registration categories. This 

proposal does not preclude associated 

persons from passing the Series 7 

examination, registering with the 

Exchange, and then functioning as a 

proprietary trader or MMAT. 

BOX expects that new BOX Options 

Participants might consider these new 

registration alternatives when applying 

to be a Participant. Accordingly, BOX 

believes that the [sic] these alternatives 

should be helpful to attracting new 

Participants, while at the same time 

preserving the important goals of 

appropriate registration and 

qualification for persons in the 

securities business. Additionally, 

proprietary trading or market making 

firms who hire new associated persons 

might choose to register those persons 

using the Series 56 exam. Unlike the 

associated persons of proprietary 

trading and market making firms 

covered by this proposal, associated 

persons of firms that conduct business 

with public customers continue to be 

subject to registration with the Exchange 

and have to pass the Series 7 

examination. These individual 

associated persons are not eligible for 

the new registration category and 

examination. 

The Exchange is proposing to identify 

in Chapter II, Section 8 several 

categories of persons that are exempt 

from these additional registration 

requirements. The categories of 

individual associated persons that are 

exempt from the registration 

requirements include: (i) Individual 

associated persons functioning solely 

and exclusively in a clerical or 

ministerial capacity; (ii) individual 

associated persons that are not actively 

engaged in the securities business; (iii) 

individual associated persons 

functioning solely and exclusively to 

meet a need for nominal corporate 

officers or for capital participation; and 

(iv) individual associated persons 

whose functions are solely and 

exclusively related to transactions in 

commodities, transactions in security 

futures and/or effecting transactions on 

the floor of another national securities 

exchange and who are registered as floor 

members with such exchange. The 

Exchange believes these registration 

exemptions are appropriate because it 

would not consider individuals that fall 

into the exemptions to be actively 

engaged in securities business unless 

they are registered as floor members on 

another national securities exchange, in 

which case, they are already registered 

as floor members and not required to 

register with the Exchange. The 

Exchange believes incorporating these 

exemptions into the rule provides 

additional clarity to individual 

associated persons as to who will or will 

not be required to register with the 

Exchange under the proposed rule. Any 

applicable FINRA registration 

requirements would continue to apply 

to Participants that are also members of 

FINRA. 

Additionally, under the proposal, the 

Exchange may, in exceptional cases and 

where good cause is shown, waive the 

qualification examination requirement. 

Similar rules are in place at the New 

York Stock Exchange, Inc. (‘‘NYSE’’) 

and FINRA.18 In determining whether a 

waiver shall be granted, the Exchange 

shall consider, among other things, 

previous industry employment, training 

and/or the successful completion of 

similar qualification examinations of 

other self-regulatory organizations. 

The Exchange also is proposing to 

require the designation of a Financial/ 

Operations Principal by each Participant 

that is subject to Exchange Act Rule 

15c3–1, and the designation of a CCO by 

each Participant. Under the proposed 

rule, the Financial/Operations Principal 

and CCO are required to register and 

pass the appropriate qualification 

examination.19 The Financial/ 

Operations Principal and CCO play 

important roles within a Participant’s 

business by acting as the persons 

responsible for the firm’s compliance 

with applicable net capital, 

recordkeeping, and other financial and 

operational rules and regulations. The 

registration requirements for a 

Financial/Operations Principal and for a 

CCO are consistent with CBOE Rule 

3.6A 20 (which in turn are consistent 

with FINRA Rule 3130 and NASD Rule 

1022). The proposal includes a limited 

exemption from the requirement to pass 

the appropriate qualification 

examination by a CCO. Specifically, a 

person that has been designated as a 

CCO on Schedule A of Form BD for at 

least two years immediately prior to 

January 1, 2002, and who has not been 

subject within the last ten years to any 

statutory disqualification as defined in 

Section 3(a)(39) of the Act; a 

suspension; or the imposition of a 

$5,000 or more fine for a violation(s) of 

any provision of any securities law or 

regulation, or any agreement with, rule 

or standard of conduct of any securities 

governmental agency, securities selfregulatory organization, or as imposed 

by any such self-regulatory organization 

in connection with a disciplinary 

proceeding, shall be required to register 

in the category of registration 

appropriate to the function to be 

performed as prescribed by the 

Exchange, but shall be exempt from the 

requirement to pass the heightened 

qualification examination as prescribed 

by the Exchange. The Exchange believes 

that implementing this proposed change 

will help meet the important goals of 

appropriate registration and 

qualification for all persons engaged in 

the securities business. 

All individuals who engage in 

supervisory functions of the 

Participant’s securities business shall be 

required to register and pass the 

appropriate heightened qualification 

examination(s) relevant to their 

particular category of registration. Each 

BOX Participant must have at least two 

such persons. The Exchange is 

proposing to require registration and 

successful completion of a heightened 

qualification examination by at least 

two individuals [sic] for any person who 

is an (i) officer; (ii) partner; (iii) director; 

(iv) supervisor of proprietary trading, 

market-making or brokerage activities; 

and/or (v) supervisor of those engaged 

in proprietary trading, market-making or 

brokerage activities with respect to 

those activities.21 The Exchange 

believes it is appropriate that any 


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22See NASD Rule 1021(e). 

23E.g., CBOE Rule 9.3A and ISE Rule 604. 

24See CBOE Rule 9.3A and ISE Rule 604. 

25 15 U.S.C. 78f(b). 

26 15 U.S.C. 78f(b)(5). 

27 15 U.S.C. 78f(c). 

28 15 U.S.C. 78f(c)(3)(B). 

person acting in a supervisory capacity 

be required to comply with heightened 

requirements regarding their 

qualification and registration. 

The Exchange may waive the 

requirement to have two officers, 

partners, directors, and/or supervisors 

registered if a Participant conclusively 

demonstrates that only one such person 

should be required to register. For 

example, a Participant could 

conclusively demonstrate that only one 

individual is required to register if such 

Participant is owned by one individual 

(such as a single member limited 

liability company), such individual acts 

as the only trader on behalf of the 

Participant, and the Participant employs 

only one other individual who functions 

only in a clerical capacity. The ability 

to waive this registration requirement is 

consistent with similar FINRA rules 

regarding principal registration.22

The Exchange notes that Participants 

that are sole proprietors may also be 

granted a waiver from the requirement 

that two officers, partners, directors, 

and/or supervisors be registered. 

Further, the Exchange is also proposing 

to allow a Participant that conducts only 

proprietary trading and has 25 or fewer 

registered persons to have only one 

officer or partner registered under this 

section rather than two. This exception 

is similar to that of several other 

exchanges and reflects that such 

Participants do not necessitate the same 

level of supervisory structure as those 

Participants that have customers or are 

larger in size. For purposes of this 

requirement, a Participant is considered 

to conduct only proprietary trading if it 

has the following characteristics: (i) The 

Participant is not required by Section 

15(b)(8) of the Exchange Act to become 

a FINRA member but is a member of 

another registered securities exchange 

not registered solely under Section 6(g) 

of the Exchange Act; (ii) all funds used 

or proposed to be used by the 

Participant are the Participant’s own 

capital, traded through the Participant’s 

own accounts; (iii) the Participant does 

not, and will not, have customers; and 

(iv) all persons registered on behalf of 

the Participant acting or to be acting in 

the capacity of a trader must be owners 

of, employees of, or contractors to the 

Participant. The description of what 

constitutes proprietary trading for 

purposes of this requirement is 

appropriate in that it provides 

additional clarity for associated persons 

to evaluate whether two individuals are 

required to register. The Exchange 

believes these potential waivers are 

appropriate to allow proprietary trading 

firms and sole proprietor firms to 

comply with the regulatory supervisory 

requirements in a reasonable manner. 

Proposed Chapter II, Section 8 also 

sets forth the requirements for 

examinations where there is a lapse in 

registration. Specifically, an individual 

associated person shall be required to 

pass the appropriate qualification 

examination for the category of 

registration if the individual associated 

person’s registration has been revoked 

by the Exchange as a disciplinary 

sanction or whose most recent 

registration has been terminated for a 

period of two or more years. The 

Exchange believes that implementing 

this proposed change will help meet the 

important goals of appropriate 

registration and qualification for all 

persons engaged in the securities 

business. 

Additionally, the Exchange proposes 

to update Chapter XI, Section 5 of the 

BOX Rules regarding continuing 

education requirements so that it is 

consistent with other SRO rules.23

Specifically, the Exchange proposes to 

add a provision detailing the procedures 

required for in-house delivery of the 

regulatory element. The required 

procedures address responsibility for 

the education program, site 

requirements, technology requirements, 

supervision requirements, and 

administration of the program. 

Participants are required to file with 

their Designated Examining Authority, 

[sic] a letter of attestation signed by a 

senior officer or partner, attesting to the 

establishment of the required 

procedures, and must annually 

represent that they have continued to 

maintain all required procedures for the 

previous year. While BOX does not have 

a floor, for consistency with other SRO 

rules, the Exchange also proposes to 

delete language that excludes those 

people whose activities are limited 

solely to the transaction of business on 

a floor from the definition of ‘‘registered 

person’’ for purposes of Chapter XI, 

Section 5 of the BOX Rules.24 The 

Exchange believes that implementing 

this proposed change will help meet the 

important goals of appropriate 

qualification and continuing education 

for all persons engaged in the securities 

business. 

Finally, this filing proposes to make 

non-substantive changes to Chapter XI, 

Section 2 (Registration of Options 

Principals), Section 3 (Registration of 

Representatives) and Section 4 

(Termination of Registered Persons) of 

the BOX Rules to define and reference 

certain terms consistently within these 

rules and with proposed Chapter II, 

Section 8. Specifically, these rules 

currently contain inconsistent 

references to the use of the Central 

Registration Depository, and the 

registration and termination forms 

required to be filed under the rules. 

Additionally, these rules contain 

reference [sic] to the National 

Association of Securities Dealers which 

is now known as the Financial Industry 

Regulatory Authority or ‘‘FINRA.’’ 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the 

Act,25 in general, and Section 6(b)(5) of 

the Act,26 in particular, in that it is 

designed to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism for a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. Specifically, the 

enhanced registration and qualification 

requirements will provide additional 

protection to investors and further 

promote the public interest. 

Additionally, the proposed rule change 

is intended to provide uniformity across 

the various SROs with respect to the 

registration and qualification 

requirements for individual persons. 

The Exchange believes that 

implementing this proposed rule change 

will help meet the important goals of 

subjecting all persons engage in the 

securities business to appropriate 

registration requirements, qualification 

requirements through the examination 

process, and continuing education 

requirements, including those persons 

associated with proprietary trading 

firms and BOX market makers. 

In addition, the Exchange believes 

that the proposed rule change is 

consistent with Section 6(c) of the 

Exchange Act,27 in general, and furthers 

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

Act,28 which provides, among other 

things, that a national securities 

exchange may bar a natural person from 

becoming associated with a member if 

such natural person does not meet the 

standards of training, experience and 

competence as prescribed by the rules of 

the national securities exchange. The 

Exchange also believes that the 


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29 15 U.S.C. 78f(c)(3)(C). 

30 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

proposed rule change furthers the 

objectives of Section 6(c)(3)(C) of the 

Exchange Act,29 which provides, among 

other things, that a national securities 

exchange may bar any person from 

becoming associated with a member if 

such person does not agree to supply 

the exchange with such information 

with respect to its dealings with the 

member as may be specified by the rules 

of the exchange and to permit the 

examination of its books and records to 

verify the accuracy of any information 

so supplied. The Exchange believes the 

Series 56 examination program 

establishes the appropriate 

qualifications for an individual 

associated person that is required to 

register as a Proprietary Trader under 

proposed Chapter II, Section 8 of the 

BOX Rules, including, but not limited 

to, Market-Makers, proprietary traders 

and individuals effecting transactions 

on behalf of other broker-dealers. The 

Exchange also believes the Series 56 

addresses industry topics that establish 

the foundation for the regulatory and 

procedural knowledge necessary for 

individuals required to register as 

Market Maker Authorized Trader [sic] 

under proposed Chapter VI, Section 2 of 

the BOX Rules. 

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 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be 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–BX–2012–020 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–2012–020. 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 on business days between the 

hours of 10 a.m. and 3 p.m. in the 

Commission’s Public Reference Room 

located at 100 F Street NE., Washington, 

DC 20549. 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–BX–2012–020 and should 

be submitted on or before May 1, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8521 Filed 4–9–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66741; No. SR–NASDAQ– 

2012–040] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify 

NASDAQ’s Transaction Execution Fee 

and Credit Schedule 

April 5, 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 23, 

2012, The NASDAQ Stock Market LLC 

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

with the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change as described in 

Items I and II 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 proposes to modify the 

Exchange’s transaction execution fee 

and credit schedule in Rule 7018. 

NASDAQ will implement the proposed 

change on April 2, 2012. The text of the 

proposed rule change is available at 

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 

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, 


srobinson on DSK4SPTVN1PROD with NOTICES