Document ID: SEC-2014-0270-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2014-02-13T05:00Z

[Federal Register Volume 79, Number 30 (Thursday, February 13, 2014)]
[Notices]
[Pages 8761-8763]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-03182]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71510; File No. SR-CBOE-2014-011]

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to a CBOE Stock Exchange Fee for 
Qualification Examination Waiver Requests

February 7, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on February 3, 2014 Chicago Board Options Exchange, Incorporated 
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (the ``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Chicago Board Options Exchange, Incorporated (the ``Exchange'' or 
``CBOE'') proposes to amend the CBOE Stock Exchange (``CBSX'') Fees 
Schedule to establish a fee for

[[Page 8762]]

qualification examination waiver requests. CBSX is CBOE's stock trading 
facility. The text of the proposed rule change is available on the 
Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the 
Secretary, 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
    CBOE Rule 3.6A, Interpretation and Policy .05, authorizes the 
Exchange, in exceptional cases and where good cause is shown, to waive 
qualification examinations and accept other standards as evidence of an 
applicant's qualification for registration. This authority is to be 
exercised in exceptional cases and where good cause is shown by the 
applicant. The rule further states that advanced age or physical 
infirmity, will not individually of themselves constitute sufficient 
grounds to waive a qualification examination. Experience in fields 
ancillary to the securities business may constitute sufficient grounds 
to waive a qualification examination.
    The Exchange has entered into a regulatory services agreement 
(``RSA'') with the Financial Industry Regulatory Authority, Inc. 
(``FINRA'') pursuant to which FINRA will process qualification 
examination waiver requests on behalf of the Exchange and CBSX 
(``Waiver Requests'').\3\ Under the RSA, CBSX Trading Permit Holders 
(``TPHs'') and persons associated with CBSX TPHs seeking a waiver of a 
qualification examination will submit a Waiver Request to FINRA.\4\ 
FINRA will process all Waiver Requests submitted by CBSX TPHs and their 
associated persons, whether the Waiver Request is for a FINRA 
examination or a non-FINRA examination (e.g., the Series 56 
examination).
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    \3\ CBOE Rule 15.9(b) authorizes the Exchange to enter into 
agreements with another self-regulatory organization to provide 
regulatory services to the Exchange to assist the Exchange in 
discharging its obligations under Section 6 and Section 19(g) of the 
Securities Exchange Act of 1934.
    \4\ Currently, Waiver Requests must be submitted to FINRA 
through the FINRA Firm Gateway.
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    FINRA will review each Waiver Request based on guidelines approved 
by the Exchange and provide the Exchange with a recommendation 
regarding the disposition of the Waiver Request. The Exchange will make 
the final decision regarding whether or not to grant or deny a Waiver 
Request.\5\ FINRA will maintain files and records made, collected or 
otherwise created by FINRA in the course of performing services under 
the RSA. Such files and records shall include, but not be limited to, 
FINRA Waiver Request disposition recommendations and the basis for its 
recommendations,\6\ CBOE decisions and the basis for its decisions,\7\ 
and letters sent to requesting CBSX TPHs communicating CBOE's 
decisions.
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    \5\ Notwithstanding the RSA, the Exchange shall retain ultimate 
legal responsibility for, and control of, its self-regulatory 
responsibilities.
    \6\ The recommendation provided to CBOE will include a detailed 
explanation and justification as to whether to grant or deny the 
Waiver Request, and in those cases where the recommendation is to 
grant a waiver, the reasoning shall support why FINRA believes it is 
an exceptional case and that good cause has been shown to warrant 
the granting of the Waiver Request.
    \7\ CBOE will notify FINRA in writing of its final decision 
regarding whether to grant or deny a Waiver Request, including any 
additional information regarding such decision.
     The Commission expects CBOE to document in writing its 
rationale for any decision when CBOE determines not to follow 
FINRA's recommendation.
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    The Exchange will pay a fee to FINRA under the RSA for each Waiver 
Request of a non-FINRA examination (e.g., the Series 56 examination) 
processed by FINRA. The Exchange proposes to charge CBSX TPHs a fee of 
$200 for each Waiver Request of a non-FINRA examination processed by 
FINRA. The proposed fee would help the Exchange recoup its costs under 
the RSA.
    The proposed fee would be effective on February 3, 2014.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with Section 
6(b)(4) of the Act,\9\ which requires that Exchange rules provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among its Trading Permit Holders and other persons using its 
facilities. Additionally, the Exchange believes the proposed rule 
change is consistent with the Section 6(b)(5) \10\ requirement that the 
rules of an exchange not be designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers. The Exchange believes 
the proposed fee is reasonable because it would help the Exchange 
recoup its costs in engaging FINRA to process Waiver Requests of non-
FINRA examinations by CBSX TPHs and their associated persons. The 
Exchange believes the proposed fee is equitable and not unfairly 
discriminatory because it would apply equally to all CBSX TPHs who 
submit Waiver Requests of non-FINRA examinations.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
    \10\ Id. [sic]
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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 that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not believe 
that the proposed fee will impose an unnecessary burden on intramarket 
competition because it would apply equally to all CBSX TPHs who submit 
Waiver Requests of non-FINRA examinations. The Exchange does not 
believe that the proposed fee will impose an unnecessary burden on 
intermarket competition because the fee would only apply to CBSX TPHs.

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) of the Act \11\ and paragraph (f) of Rule 19b-4 \12\ 
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

[[Page 8763]]

the purposes of the Act. If the Commission takes such action, the 
Commission will institute proceedings to determine whether the proposed 
rule change should be approved or disapproved.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2014-011 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2014-011. 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 
10:00 a.m. and 3:00 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-CBOE-2014-011 and should be 
submitted on or before March 6, 2014.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-03182 Filed 2-12-14; 8:45 am]
BILLING CODE 8011-01-P