Federal Register / Vol. 75, No. 187 / Tuesday, September 28, 2010 / Notices 59773 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3CBOE Rule 1.1(qq) provides ‘‘The term 

‘Associated Person’ or ‘Person Associated with a 

Trading Permit Holder’ means any partner, officer, 

director or branch manager of a Trading Permit 

Holder (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 Trading Permit Holder, or 

any employee of a Trading Permit Holder.’’ This 

filing refers specifically to the classification of 

‘‘individual associated persons’’ as an organization 

could fall within the scope of CBOE Rule 1.1(qq) 

and it is not CBOE’s intention to require registration 

by an organization. 

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 

prior to 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, the 

proposed rule change has become 

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

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder. 

The Exchange has requested that the 

Commission waive the 30-day operative 

delay so that the proposal may become 

operative immediately upon filing. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest, because such waiver 

will promote consistency between the 

rules governing the trading of Nasdaq 

Securities and listed securities on the 

Exchange. Accordingly, the Commission 

waives the 30-day operative delay 

requirement and designates the 

proposed rule change as operative upon 

filing with the Commission. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

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

Number SR–NYSEAmex–2010–95 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–2010–95. This 

file number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, on official business 

days between the hours of 10 a.m. and 

3 p.m. Copies of the filing also will be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–NYSEAmex–2010–95 and 

should be submitted on or before 

October 19, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–24261 Filed 9–27–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62977; File No. SR–CBOE– 

2010–084] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Proposed Rule 

Change Regarding Registration and 

Qualification Requirements 

September 22, 2010. 

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 

September 10, 2010, the Chicago Board 

Options Exchange, Incorporated 

(‘‘Exchange’’ or ‘‘CBOE’’) 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 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 proposes to amend its 

rules regarding qualification and 

registration of individual Trading 

Permit Holders and associated persons. 

The text of the rule proposal is available 

on the Exchange’s Web site (http:// 

www.cboe.org/legal), at the Exchange’s 

Office of the Secretary, on the 

Commission’s Web site (http:// 

www.sec.gov), and at the Commission. 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

CBOE is proposing to amend its rules 

regarding qualification, registration and 

continuing education of individual 

Trading Permit Holders and 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 

and in light of recent market events, the 

Exchange is proposing to expand its 

registration and qualification 

requirements to include additional 


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4Section 1.1 of CBOE’s By-Laws provides: ‘‘The 

term ‘Trading Permit Holder’ means any individual, 

corporation, partnership, limited liability company 

or other entity authorized by the Rules that holds 

a Trading Permit. If a Trading Permit Holder is an 

individual, the Trading Permit Holder may also be 

referred to as an ‘individual Trading Permit Holder.’ 

If a Trading Permit Holder is not an individual, the 

Trading Permit Holder may also be referred to as 

a ‘TPH organization.’ A Trading Permit Holder is a 

‘member’ solely for purposes of the Act; however, 

one’s status as a Trading Permit Holder does not 

confer on that Person any ownership interest in the 

Exchange.’’ 

5 17 CFR 240.15b7–1. 

6 15 U.S.C. 78a et seq. 

7 17 CFR 240.15c3–1. 

8An individual with an indirect ownership 

interest in a Trading Permit Holder or TPH 

organization, that is engaged in the securities 

business of such Trading Permit Holder or TPH 

organization, is required to register under proposed 

Rule 3.6A(a)(1). 

9With the exception of its application to sole 

proprietors (as registration of sole proprietors at 

CBOE is required under proposed subparagraph (a) 

of Interpretation and Policy .06 to Rule 3.6A), this 

requirement is consistent with FINRA’s registration 

requirement for Principals (as defined in NASD 

Rule 1021). CBOE is declining to adopt the term 

‘‘Principal’’ in the Exchange Rulebook to avoid 

confusion with existing terms, such as ‘‘Option 

Principal.’’ 

10CBOE has represented to Commission staff that 

it intends to develop, within six months of the 

approval date of this filing, the appropriate 

qualification examination(s) for the individual 

Trading Permit Holders and associated persons that 

will be required to register following the approval 

of this filing. Once the development of an 

examination(s) has been completed, the 

implementation and effective date will be subject to 

approval by the Commission and any necessary 

systems development schedules to implement the 

examination. If the Exchange does not complete 

development of the examination(s) within six 

months of the approval date of this filing, the 

Exchange will establish a deadline for qualification 

based on the existing categories of registration and 

qualification examinations available on Web CRD, 

until such time as the development and 

implementation of an alternative examination(s) has 

been completed. The referenced categories of 

registration available on Web CRD include, but may 

not be limited to, the General Securities 

Representative (GS) and General Securities 

Principal (GP), as applicable to the type of business 

activities conducted. The accompanying 

qualification examination for the General Securities 

Representative is the Series 7 and the 

accompanying qualification examination for the 

General Securities Principal is the Series 24. 

types of individual Trading Permit 

Holders and individual associated 

persons. The revised requirements 

apply to both CBOE and CBOE Stock 

Exchange (‘‘CBSX’’) Trading Permit 

Holders and their associated persons. 

CBOE is also proposing to clarify that 

certain requirements throughout Rule 

3.6A, including proposed Rule 3.6A(a), 

3.6A(b) and Interpretation and Policy 

.03 to 3.6A, apply to both Trading 

Permit Holders and TPH organizations.4

The Exchange believes the proposed 

rule changes are consistent with Rule 

15b7–1,5 promulgated under the 

Securities Exchange Act of 1934, as 

amended (‘‘Exchange Act’’),6 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 

***’’ 

CBOE Rule 3.6A establishes the 

qualification and registration 

requirements for associated persons of 

TPH organizations. This rule currently 

establishes registration requirements for 

a Financial/Operations Principal for 

each Trading Permit Holder and TPH 

organization subject to the Exchange Act 

Rule 15c3–1.7 Rule 3.6A also references 

the registration requirements set forth in 

Chapter IX of the Exchange’s Rulebook 

for associated persons of TPH 

organizations that conduct a public 

customer business. 

The Exchange is proposing to require 

additional Trading Permit Holders and 

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 any 

qualification examination(s) as 

prescribed by the Exchange and submit 

any required registration and 

examination fees. Specifically, the 

Exchange is proposing to move the 

existing Rule 3.6A(a), governing 

registration requirements for Financial 

and Operations Principals to 3.6A(b). 

CBOE is proposing to add Rule 

3.6A(a)(1) that will require registration 

and qualification by individual Trading 

Permit Holders and individual 

associated persons engaged or to be 

engaged in the securities business of a 

Trading Permit Holder or TPH 

organization.8

CBOE is also proposing to adopt 

Interpretation and Policy .06 to define 

what it means to be ‘‘engaged in the 

securities business of a Trading Permit 

Holder or TPH organization’’ for 

purposes of this rule. Specifically, an 

individual Trading Permit Holder or 

individual associated person shall be 

considered to be a person engaged in the 

securities business of a Trading Permit 

Holder or TPH organization if (i) the 

individual Trading Permit Holder or 

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, market-making or brokerage 

activities on behalf of a broker-dealer 

account; or (ii) the individual Trading 

Permit Holder or associated person 

engages in the management of any 

individual Trading Permit Holder or 

individual associated person identified 

in (i) above as an officer, partner or 

director.9

Web CRD has been enhanced by 

FINRA to allow for general registration 

of applicable Trading Permit Holders 

and associated persons. CBOE will 

require that all applicable Trading 

Permit Holders and individual 

associated persons that are not already 

registered in Web CRD, that are required 

to register under proposed Rule 3.6A, to 

register within 60 days of the approval 

date of this filing by the U.S. Securities 

and Exchange Commission. CBOE is 

currently working with the Division of 

Trading and Markets of the U.S. 

Securities and Exchange Commission to 

identify a reasonable time period for 

which compliance with the additional 

examination requirements will be 

required. The availability of the 

appropriate category on Web CRD for 

any new qualification examinations 

recognized by the Exchange may be 

subject to the timing for any required 

systems development on Web CRD. 

CBOE is considering various 

alternatives for an appropriate 

qualification examination(s) for Trading 

Permit Holders and associated persons 

required to register under proposed Rule 

3.6A(a). These alternatives include, but 

are not limited to, the successful 

completion of CBOE’s Trading Permit 

Holder Qualification Examination or the 

development of a new qualification 

examination.10 The Exchange will 

notify its Trading Permit Holders and 

TPH organizations via regulatory 

circular what qualification 

examination(s) will be acceptable for 

compliance with the requirements 

proposed in Rule 3.6A(a)(1). Individual 

Trading Permit Holders or individual 

associated persons acting in the capacity 

of a sole proprietor, officer, partner, 

director or Chief Compliance Officer 

will be subject to heightened 

qualification requirements. In addition, 

an individual Trading Permit Holder or 

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 with respect to 


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11The Commission notes that these firms must 

comply with Section 15(b)(8) of the Act. 

12The appropriate qualification examination for a 

Chief Compliance Officer is the Series 14 

(Compliance Official). CBOE is working with 

FINRA to establish this category of registration and 

make the accompanying qualification examination 

available at CBOE on Web CRD. 

13See NASD Rule 1070—Qualification 

Examinations and Waiver of Requirements and 

NYSE Rule 345—Employees—Registration, 

Approval, Records. 

14With the exception of its application to sole 

proprietors, this requirement is consistent with the 

Continued 

those activities will be subject to 

heightened qualification requirements. 

The Exchange believes that the 

heightened qualification requirements 

should enhance the supervisory 

structure for Trading Permit Holders 

and TPH organizations that do not 

conduct a public customer business. 

The Exchange is also proposing to add 

Rule 3.6A(a)(2) to identify several 

categories of persons that are exempt 

from these additional registration 

requirements. The categories of 

individual Trading Permit Holders and 

associated persons that are exempt from 

the registration requirements set forth in 

Rule 3.6A(a)(1) include (i) Individual 

associated persons functioning solely 

and exclusively in a clerical or 

ministerial capacity; (ii) individual 

Trading Permit Holders and individual 

associated persons that are not actively 

engaged in the securities business, (iii) 

individual Trading Permit Holders and 

individual associated persons 

functioning solely and exclusively to 

meet a Trading Permit Holder’s or TPH 

organization’s 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 CBOE 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 at 

CBOE.11 CBOE believes incorporating 

these exemptions into the rule provides 

additional clarity to individual Trading 

Permit Holders and individual 

associated persons as to who will or will 

not be required to register under the 

proposed rule. Any applicable FINRA 

registration requirements would 

continue to apply to Trading Permit 

Holders and TPH organizations that are 

also members of FINRA. 

The Exchange is proposing to move 

the existing Rule 3.6A(b), referencing 

the types of associated persons required 

to register under Chapter IX of CBOE’s 

Rules, to Rule 3.6A(d). CBOE is also 

proposing to clarify the language in this 

section to make it clear that individual 

associated persons, including Registered 

Options Principals and Registered 

Representatives, are also subject to the 

registration requirements set forth in 

Chapter IX of CBOE’s Rules. Chapter IX 

is generally applicable to TPH 

organizations that conduct a public 

customer business. 

The Exchange is also proposing to 

adopt Rule 3.6A(c) to require the 

designation of a Chief Compliance 

Officer by Trading Permit Holders and 

TPH organizations that are registered 

broker-dealers, which designation shall 

be updated on Schedule A of Form BD. 

Under the proposed rule, the Chief 

Compliance Officer shall be required to 

register and pass the appropriate 

qualification examination as prescribed 

by the Exchange.12 This is consistent 

with FINRA Rule 3130 requiring 

designation of at least one Chief 

Compliance Officer on Schedule A of 

Form BD. In addition, NASD Rule 1022 

requires registration by each person 

designated as Chief Compliance Officer 

on Schedule A of Form BD. CBOE is 

also proposing to implement a limited 

exemption from the requirement to pass 

the appropriate qualification 

examination by a Chief Compliance 

Officer. Specifically, a person that has 

been designated as a Chief Compliance 

Officer 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 is proposing to adopt 

Rule 3.6A(e) to set forth the 

requirements for examinations where 

there is a lapse in registration. 

Specifically, an individual Trading 

Permit Holder or individual associated 

person shall be required to pass the 

appropriate qualification examination 

for the category of registration if the 

individual Trading Permit Holder’s or 

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 is proposing to move 

the language in the existing 

Interpretation and Policy .01 to 

Interpretation and Policy .02. The 

Exchange is proposing to add language 

to Interpretation and Policy .01 

requiring each individual Trading 

Permit Holder or individual associated 

person subject to the registration 

requirements in Rule 3.6A to 

electronically file a Uniform 

Application for Securities Industry 

Registration through Web CRD. 

The Exchange is also proposing to 

move the existing Interpretation and 

Policies .02 and .03 to Interpretation 

and Policies .03 and .04, respectively. 

The Exchange is also proposing to 

modify the proposed Interpretation and 

Policies .02, .03 and .04 to remove the 

existing references to those with ‘‘an 

associated person status’’ enumerated 

under paragraph (a) or (b) of the current 

Rule 3.6A and extend the applicability 

to all individual Trading Permit Holders 

or individual associated persons subject 

to the registration requirements in Rule 

3.6A. 

The Exchange is also proposing to 

adopt Interpretation and Policy .05 to 

Rule 3.6A. This will enable the 

Exchange to waive the qualification 

examination requirement where good 

cause is shown. Similar rules are in 

place at the New York Stock Exchange, 

Inc. (‘‘NYSE’’) and FINRA.13 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 selfregulatory organizations. 

In addition, the Exchange is 

proposing to add Interpretation and 

Policy .07 that will require registration 

and successful completion of a 

heightened qualification examination by 

at least two individuals that are each an 

officer, partner or director of each 

Trading Permit Holder or TPH 

organization that is a registered brokerdealer and has trading privileges on the 

Exchange.14 However, please note that 


srobinson on DSKHWCL6B1PROD with NOTICES
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registration requirement set forth in NASD Rule 

1021 addressing registration of two Principals (as 

defined in NASD Rule 1021). 

15See NASD Rule 1021(e). 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(5). 

18 15 U.S.C. 78f(c). 

19 15 U.S.C. 78f(c)(3)(B). 

20 15 U.S.C. 78f(c)(3)(C). 

all individuals who engage in 

supervisory functions of the Trading 

Permit Holder’s or TPH organization’s 

securities business shall be required to 

register and pass the appropriate 

heightened qualification examination(s) 

relevant to the particular category of 

registration. Trading Permit Holders that 

are sole proprietors are exempt from this 

requirement. In addition, the Exchange 

may waive the requirement to have two 

officers, partners and/or directors 

registered if a Trading Permit Holder or 

TPH organization conclusively 

demonstrates that only one officer, 

partner or director should be required to 

register. For example, a TPH 

organization could conclusively 

demonstrate that only one individual is 

required to register if such TPH 

organization is owned by one individual 

(such as a single member limited 

liability company), such individual acts 

as the only trader on behalf of the TPH 

organization, and the TPH organization 

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.15

CBOE is also proposing to allow a 

Trading Permit Holder or TPH 

organization that conducts proprietary 

trading only 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 

Trading Permit Holders or TPH 

organizations do not necessitate the 

same level of supervisory structure as 

those Trading Permit Holders or TPH 

organizations that have customers or are 

larger in size. For purposes of this 

Interpretation and Policy .07 to Rule 

3.6A, a Trading Permit Holder or TPH 

organization shall be considered to 

conduct only proprietary trading if it 

has the following characteristics: (i) the 

Trading Permit Holder or TPH 

organization 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 Trading 

Permit Holder or TPH organization are 

the Trading Permit Holder’s or TPH 

organization’s own capital, traded 

through the Trading Permit Holder’s or 

TPH organization’s own accounts; (iii) 

the Trading Permit Holder or TPH 

organization does not, and will not, 

have customers; and (iv) all persons 

registered on behalf of the Trading 

Permit Holder or TPH organization 

acting or to be acting in the capacity of 

a trader must be owners of, employees 

of, or contractors to the Trading Permit 

Holder or TPH organization. The 

description of what constitutes 

proprietary trading for purposes of this 

Interpretation and Policy .07 to Rule 

3.6A is appropriate in that it provides 

additional clarity for Trading Permit 

Holders and individual associated 

persons to evaluate whether two 

individuals are required to register. 

In conjunction with the additional 

registration requirements, the Exchange 

is proposing to delete a reference in 

Interpretation and Policy .01 to Rule 

9.3A that excludes those people whose 

activities are limited solely to the 

transaction of business on the Floor 

with Trading Permit Holders or 

registered broker-dealers from the 

definition of ‘‘registered person’’ for 

purposes of Rule 9.3A. The changes 

proposed to Interpretation and Policy 

.04 of Rule 3.6A would subject 

individual Trading Permit Holders and 

individual associated persons whose 

activities are limited solely to the 

transaction of business on the Floor 

with Trading Permit Holders or 

registered broker dealers to the 

continuing education requirements set 

forth in Rule 9.3A or any other 

continuing education requirements as 

prescribed by the Exchange. 

This filing also proposes to make 

several technical and/or non-substantive 

changes. First, the Exchange is 

proposing to modify the title of Rule 

3.6A to delete the term ‘‘Certain’’ and to 

clarify that the registration requirements 

set forth in Rule 3.6A also apply to 

specified Trading Permit Holders. The 

Exchange is also proposing to make a 

technical change to proposed Rule 

3.6A(b) that will replace the reference to 

the ‘‘Department of Financial and Sales 

Practice Compliance’’ with the 

‘‘Exchange’’ because the Exchange no 

longer has a department by that name. 

In addition, the Exchange is proposing 

to replace the two references in this 

section to ‘‘in a form and manner 

prescribed by the Exchange’’ with ‘‘as 

prescribed by the Exchange’’ for 

consistency throughout Rule 3.6A. The 

Exchange is also proposing to amend 

several references in CBOE Rules 3.6A, 

9.2 and 9.3. Specifically, these rules 

currently reference ‘‘NASD’s Web CRD 

System.’’ Since NASD is now known as 

FINRA, CBOE is proposing to change 

this reference to ‘‘Web CRD.’’ The 

Exchange is proposing to clarify Rule 

9.3(c) relating to amended Form U–5 to 

provide ‘‘the facts or circumstances 

giving rise to the need for the 

amendment’’ rather than ‘‘facts and 

circumstances giving rise to the 

amendment.’’ Finally, CBOE is 

proposing to replace language relating to 

‘‘said termination notice’’ in Rule 9.3(b) 

and ‘‘notice’’ in Rule 9.3(c) with ‘‘Form 

U–5’’ for specificity. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Act,16 in general, and furthers 

the objectives of Section 6(b)(5) of the 

Act,17 which requires, among other 

things, that the Exchange’s rules be 

designed to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and 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. 

In addition, the Exchange believes 

that the proposed rule change is 

consistent with Section 6(c) of the Act,18

in general, and furthers the objectives of 

Section 6(c)(3)(B) of the Act,19 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 

proposed rule change furthers the 

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

Act,20 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. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE 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. 


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21The text of the proposed rule change is 

available on the Commission’s Web site at http:// 

www.sec.gov. 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Changes are marked to the rule text that appears 

in the electronic manual of BX found at http:// 

nasdaqomxbx.cchwallstreet.com. 

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 proposal. 

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 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the 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 e-mail to rulecomments@sec.gov. Please include File 

No. SR–CBOE–2010–084 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 No. 

SR–CBOE–2010–084. This file number 

should be included on the subject line 

if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Web site (http://www.sec.gov/rules/ 

sro.shtml). Copies of the submission,21

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 office of CBOE. 

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–CBOE–2010–084 and should be 

submitted on or before October 19, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–24343 Filed 9–27–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62969; File No. SR–BX– 

2010–064] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Order Granting Accelerated 

Approval to a Proposed Rule Change 

To Establish Pricing for 10Gb Direct 

Circuit Connections and To Codify 

Pricing for Direct Circuit Connections 

Capable of Supporting Up to 1Gb for 

Customers Who Are Not Co-Located in 

the Exchange’s Datacenter 

September 22, 2010. 

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 

September 10, 2010, The NASDAQ 

OMX BX, Inc. (the ‘‘Exchange’’ or ‘‘BX’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

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, and is 

approving the proposal on an 

accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange is filing with the 

Commission a proposed rule change to 

establish pricing for 10Gb direct circuit 

connections and to codify pricing for 

direct circuit connections capable of 

supporting up to 1Gb for customers who 

are not co-located in the Exchange’s 

datacenter. The text of the proposed rule 

change is below. Proposed new 

language is underlined and proposed 

deletions are in brackets [sic].3

* * * * * 

7051. DIRECT CONNECTIVITY TO BX 

Description Installation Fee Ongoing Monthly Fee 

Direct Circuit Connection to BX (10Gb) .................................................................................. $1,000 $5000 

Direct Circuit Connection to BX (supports up to 1Gb) ............................................................ $1000 $1000 

Optional Cable Router ............................................................................................................. $925 


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