Document ID: SEC-2013-1881-0001
Agency: sec
Document Type: Notice
Title: Sel-Regulatory Organizations; Proposed Rule Changes: Topaz Exchange, LLC
Posted Date: 2013-11-01T04:00Z

[Federal Register Volume 78, Number 212 (Friday, November 1, 2013)]
[Notices]
[Pages 65734-65736]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-26033]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70761; File No. SR-Topaz-2013-09]

Self-Regulatory Organizations; Topaz Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Schedule of Fees

October 28, 2013.
    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 October 22, 2013, the Topaz Exchange, LLC (d/b/a ISE Gemini) 
(the ``Exchange'' or ``Topaz'') filed with the Securities and Exchange 
Commission the proposed rule change, as described in Items I, II, and 
III below, which items have been prepared by the self-regulatory 
organization. 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

    Topaz is proposing to amend its Schedule of Fees to adopt a 
continuing education fee for Series 56 registered persons. The text of 
the proposed rule change is available on the Exchange's Internet Web 
site at http://www.ise.com, 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 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 purpose of the proposed rule change is to amend the Schedule of 
Fees to adopt a fee for a new continuing

[[Page 65735]]

education program, the S501,\3\ which is required for persons who are 
registered as Proprietary Traders (i.e. Series 56) and do not maintain 
any other registration.\4\
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    \3\ See Securities Exchange Act Release No. 70417 (September 16, 
2013), 78 FR 57907 (September 20, 2013) (SR-ISE-2013-48). ISE Rule 
604, which specifies the continuing education requirements for 
registered persons, including Series 56 registered Proprietary 
Traders, is incorporated by reference into Chapter 6 of Topaz Rules.
    \4\ Individuals that are registered under any other registration 
are required to maintain the continuing education obligations 
associated with such registrations. For example, an individual that 
engages solely in proprietary trading activities but has passed the 
Series 7 and is registered as a General Securities Representative 
will be required to continue taking the Series 7 continuing 
education program (S101). Id.
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    The S501 addresses the continuing education of Proprietary Traders, 
based on the content outline for the Series 56 exam, which covers the 
main categories of rules and regulations generally applicable to such 
persons. These generally include recordkeeping and recording 
requirements, types and characteristics of securities and investments, 
trading practices and display execution and trading systems. Each 
Proprietary Trader required to take the S501 must complete the 
continuing education program within 120 days after their [sic] second 
registration anniversary date, and every three years thereafter or as 
otherwise prescribed by the Exchange.
    The Exchange proposes to adopt a $60 fee for the S501 continuing 
education program, which will be used for the administration of the 
S501. The Financial Industry Regulatory Authority (``FINRA'') 
administers this program on behalf of the exchanges and therefore the 
fees are payable directly to FINRA. The Exchange expects that the other 
exchanges that recognize the Proprietary Trader registration either 
have or will adopt the same fee for continuing education.\5\
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    \5\ See e.g. Securities Exchange Act Release Nos. 70257 (August 
26, 2013), 78 FR 53814 (August 30, 2013) (SR-BATS-2013-047); 70064 
(July 30, 2013), 78 FR 47469 (August 5, 2013) (SR-CBOE-2013-078); 
70194 (August 14, 2013) 78 FR 51259 (August 20, 2013) (SR-C2-2013-
030); 70327 (September 5, 2013), 78 FR 55766 (September 11, 2013) 
(SR-Phlx-2013-85).
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    The Exchange's Schedule of Fees does not currently set forth the 
session fees for other continuing education programs required by the 
Exchange because these programs are within the jurisdiction of FINRA, 
which collects these session fees from its members. The Series 56, 
however, applies to Topaz Members that are not required by Section 
15(b)(8) of the Act \6\ to become members of FINRA. Therefore, the 
Exchange believes it is appropriate to include the Series 56 continuing 
education fee within the Exchange's Schedule of Fees to make the cost 
of this program clear to Topaz Members.
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    \6\ 15 U.S.C. 78o(b)(8).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(4) of the Act,\8\ in particular, in that it provides for an 
equitable allocation of reasonable fees and other charges among 
Exchange Members and other persons using its facilities. The proposed 
fee is equitable and not unfairly discriminatory, because it applies 
equally to all persons registered solely as Proprietary Traders. The 
Exchange notes that it will not invoice or collect funds from Members 
that are subject to these fees because these fees will be paid directly 
to FINRA as administrator of the continuing education program. The 
proposed fees are reasonably designed to allow FINRA to cover its cost 
of administering the Series 56 continuing education program on behalf 
of the Exchange, and the Exchange believes it is reasonable and 
equitable to include these fees in its Schedule of Fees to make the 
costs of the Series 56 continuing education program clear to Members. 
Moreover, the Exchange believes other exchanges will be assessing the 
same fees for this continuing education program.\9\
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ See supra notes 3 and 5.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
believe that the proposed rule change will affect intermarket 
competition because all of the exchanges that recognize the Proprietary 
Trader registration category are expected to adopt the same continuing 
education fee.\10\ Furthermore, the Exchange does not believe the 
proposed rule change will affect intramarket competition because all 
Proprietary Traders required to complete the new S501 continuing 
education program will pay the same continuing education fee.
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    \10\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties.

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)(ii) of the Act,\11\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\12\ because it establishes a due, fee, or other charge 
imposed by Topaz.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. 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 rule-comments@sec.gov. Please include 
File Number SR-Topaz-2013-09 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-Topaz-2013-09. 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

[[Page 65736]]

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 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-Topaz-2013-09 and should be 
submitted on or before November 22, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-26033 Filed 10-31-13; 8:45 am]
BILLING CODE 8011-01-P