Document ID: SEC-2016-0089-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2016-01-19T05:00Z

[Federal Register Volume 81, Number 11 (Tuesday, January 19, 2016)]
[Notices]
[Pages 2931-2933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-00784]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76881; File No. SR-CBOE-2015-119]

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend the Fees Schedule

January 12, 2016.
    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 December 30, 2015, 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

    The Exchange proposes to amend the Fees Schedule relating to 
Continuing Education Fees. 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
    The Exchange proposes to amend the Fees Schedule. Specifically, the 
Exchange proposes to make changes to the Continuing Education Fees 
section of the Fees Schedule to delete references to the Series 56 
registration and to provide that continuing education (``CE'') fees for 
all registration categories will be $100 if conducted at a test center 
or $55 if conducted via Web-based delivery. This filing is being 
submitted pursuant to recent changes to Interpretation and Policy .08 
to Rule 3.6A (Qualification and Registration of Trading Permit Holders 
and Associated Persons) and to Rule 9.3A (Continuing Education for 
Registered Persons), which provide that effective January 4, 2016, the 
S501 Series 56 Proprietary Trader CE Program for Series 56 registered 
persons will cease to exist and that Series 57 registered persons are 
instead permitted [sic] to enroll in the S101 General Program for 
Series 7 and all other registered persons, which will be made available 
via Web-delivery as of that date.\3\
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    \3\ See Securities Exchange Act Release No. 76247 (October 23, 
2015), 80 FR 66605 (October 29, 2015) (Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change Relating to 
Qualification and Registration of Trading Permit Holders and 
Associated Persons) (SR-CBOE-2015-094); Securities Exchange Act 
Release No. 76107 (October 8, 2015), 80 FR 62139 (October 15, 2015) 
(Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change Relating to Delivery of the Regulatory Element of the 
Exchange's Continuing Education Program) (SR-CBOE-2015-084).

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[[Page 2932]]

    Pursuant to Rule 9.3A (Continuing Education for Registered 
Persons), no Trading Permit Holder (``TPH'') or TPH organization shall 
permit any registered person to continue to, and no registered person 
shall continue to perform duties as a registered person unless such 
person has complied with the Exchange's CE requirements as prescribed 
under the Rules.\4\ The CE requirements under Rule 9.3A consist of a 
Regulatory Element \5\ and a Firm Element.\6\ The Regulatory Element 
applies to all registered persons \7\ and consists of periodic 
computer-based training on regulatory, compliance, ethical, and 
supervisory subjects and sales practice standards, which must be 
completed within prescribed timeframes.\8\ Currently, the Exchange 
offers the following Regulatory Elements for Exchange registered 
persons: the S201 Supervisor Program for registered principals and 
supervisors; the S106 Series 6 Program for Series 6 registered persons; 
the S501 Series 56 Proprietary Trader CE Program for Series 56 
registered persons, and the S101 General Program for Series 7 and all 
other registered persons.\9\
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    \4\ See Rule 9.3A(a) (Regulatory Element).
    \5\ See id.
    \6\ See Rule 9.3A(c) (Firm Element).
    \7\ For purposes of the Regulatory Element, a ``registered 
person'' means a TPH, associated person, and/or Representative 
approved by and registered with the Exchange. See Interpretation and 
Policy .01 to Rule 9.3A.
    \8\ Pursuant to Rule 9.3A(a), each registered person shall 
complete the Regulatory Element of the CE Program beginning with the 
occurrence of their second registration anniversary date and every 
three years thereafter, or as otherwise prescribed by the Exchange. 
On each occasion, the Regulatory Element must be completed within 
120 days after the person's registration anniversary date. A 
person's initial registration date, also known as the ``base date,'' 
shall establish the cycle of anniversary dates for purposes of the 
Rule. The content of the Regulatory Element of the Program is 
determined by the Exchange for each registration category of persons 
subject to the Rule. In addition, a registered person is required to 
retake the Regulatory Element in the event that such person: (i) 
becomes subject to any statutory disqualification as defined in 
Section 3(a)(39) of the Securities Exchange Act of 1934 (the 
``Act''); (ii) becomes subject to suspension or to the imposition of 
a fine of $5,000 or more for violation of any provision of any 
securities law or regulation, or any agreement with or rule or 
standard of conduct of any securities governmental agency, 
securities self-regulatory organization, or as imposed by any such 
regulatory or self-regulatory organization in connection with a 
disciplinary proceeding; or (iii) is ordered as a sanction in a 
disciplinary action to re-take the Regulatory Element by any 
securities governmental agency or securities self-regulatory 
organization. See Rule 9.3A(a)(2) (Disciplinary Actions).
    \9\ See Rule 9.3A(a)(3) (Required Programs).
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    The Financial Regulatory Authority (``FINRA'') administers the 
Exchange's CE Programs on behalf of the Exchange. On August 6, 2015, 
the Securities and Exchange Commission (``Commission'' or ``SEC'') 
approved amendments to FINRA Rule 1250 (Continuing Education 
Requirements) to provide a Web-based delivery method for completing the 
Regulatory Element of the CE requirements and to establish a fee for 
Web-based delivery of the Regulatory Element of the CE 
requirements.\10\ Consistent with the changes to FINRA Rule 1250, the 
Exchange submitted a rule filing to make similar changes to its CE 
Program requirements on September 30, 2015.\11\ Accordingly, effective 
October 1, 2015, the Regulatory Elements of Exchange's CE Programs for 
the S106 for Investment Company and Variable Contracts Representatives, 
the S201 for Registered Principals and Supervisors, and the S901 for 
Operations Professionals were made available via Web-based delivery 
pursuant to Rule 9.3A.
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    \10\ See Securities Exchange Act Release No. 75581 (July 31, 
2015), 80 FR 47018 (August 6, 2015) (Order Approving a Proposed Rule 
Change to Provide a Web-based Delivery Method for Completing the 
Regulatory Element of the Continuing Education Requirements) (SR-
FINRA-2015-015).
    \11\ See Securities Exchange Act Release No. 76107 (October 8, 
2015), 80 FR 62139 (October 15, 2015) (Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change Relating to 
Delivery of the Regulatory Element of the Exchange's Continuing 
Education Program) (SR-CBOE-2015-084).
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    In addition to the changes to Rule 9.3A with respect to Web-based 
delivery of the Regulatory Element of the CE Programs for the S106 for 
Investment Company and Variable Contracts Representatives, S201 for 
Registered Principals and Supervisors, and S901 for Operations 
Professionals, the Exchange also amended Rule 9.3A to remove the option 
for Series 56 registered persons to participate in the S501 Series 56 
Proprietary Trader CE program in order to satisfy the Regulatory 
Element of the Exchange's CE Program. Pursuant to recent changes to 
Interpretation and Policy .08 to Rule 3.6A, the S501 Series 56 
Proprietary Trader CE program is being phased out along with the Series 
56 Proprietary Trader qualification examination and being replaced with 
the Series 57 Securities Trader qualification examination.\12\ As a 
result, effective January 4, 2016, the S501 Series 56 Proprietary 
Trader CE Program for Series 56 registered persons will cease to exist. 
In place of the S501 Series 56 Proprietary Trader CE Program for Series 
56 registered persons, Series 57 registered persons will be permitted 
[sic] to enroll in the S101 General Program for Series 7 and all other 
registered persons, including, but not limited to Series 57 registered 
persons beginning January 4, 2016.
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    \12\ See Securities Exchange Act Release No. 76247 (October 23, 
2015), 80 FR 66605 (October 29, 2015) (Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change Relating to 
Qualification and Registration of Trading Permit Holders and 
Associated Persons) (SR-CBOE-2015-094); see also Securities Exchange 
Act Release No. 75783 (August 28, 2015) (Order Approving a Proposed 
Rule Change to Establish the Securities Trader and Securities Trader 
Principal Registration Categories) (SR-FINRA-2015-017).
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    Consistent with SR-FINRA-2015-015, the purpose of this filing is to 
amend the Fees Schedule to reflect the $55 fee [sic] for Web-based 
delivery of the Regulatory Element of the S101 General Program for 
Series 7 and all other registered persons, including, but not limited 
to Series 57 registered Securities Traders.\13\ Pursuant to SR-FINRA-
2015-015, delivery of the Regulatory Element of the S101, S106, S201, 
and S901 CE Programs will continue to be offered at testing centers for 
a period up to no later than six months after January 4, 2016 and the 
fees for test center delivery of the Regulatory Element of the S101, 
S106, S201, and S901 CE Programs will continue to be $100 for so long 
as such programs are available at testing centers.\14\ Consistent with 
SR-FINRA-2015-015, under the Exchange's proposed rule change, test 
center delivery of the Regulatory Element of the S101 CE Program would 
continue to be $100 for so long as such programs are available at 
testing centers. In addition, also consistent with SR-FINRA-2015-015, 
under the Exchange's proposed rule change, Web-based delivery of the 
Regulatory Element of the S101 CE Program would be $55, beginning 
January 4, 2016.\15\
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    \13\ See Securities Exchange Act Release No. 75581 (July 31, 
2015), 80 FR 47018 (August 6, 2015) (Order Approving a Proposed Rule 
Change to Provide a Web-based Delivery Method for Completing the 
Regulatory Element of the Continuing Education Requirements) (SR-
FINRA-2015-015).
    \14\ Test-center delivery of the Regulatory Element will be 
phased out by no later than six months after January 4, 2016. See 
Securities Exchange Act Release No. 75581 (July 31, 2015), 80 FR 
47018 (August 6, 2015) (Order Approving a Proposed Rule Change To 
Provide a Web-Based Delivery Method for Completing the Regulatory 
Element of the Continuing Education) (SR-FINRA-2015-015). At that 
time, the Exchange will file another fee filing to remove the test 
center option for delivery of the Regulatory Element from the Fees 
Schedule. See Securities Exchange Act Release No. 76352 (November 4, 
2015), 80 FR 69760 (November 10, 2015) (Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change to Amend the Fees 
Schedule) (SR-CBOE-2015-093). The Exchange has already amended the 
Fees schedule to reflect the $55 fee for Web-based delivery of the 
Regulatory Elements of the S106, S201, and S901 CE Programs. See id.
    \15\ See id.

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[[Page 2933]]

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\16\ Specifically, the Exchange believes the proposed rule change 
is consistent with the Section 6(b)(5) \17\ requirements that the rules 
of an exchange be designed to prevent fraudulent and manipulative acts 
and practices, to promote just and equitable principles of trade, 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 of a free and open market and a national market 
system, and, in general, to protect investors and the public interest. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \18\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
    \18\ Id.
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    In particular, the Exchange believes that Web-based administration 
of the Regulatory Element of the Exchange's CE Program and the lower 
costs associated with Web-based administration of the Regulatory 
Element of the Exchange's CE Program are ends that may serve to 
increase access to the markets, which is in the interests of investors 
and consistent with the Act. In general, Web-based delivery of the 
Regulatory Element of the Exchange's CE Programs at a reduced cost 
lowers barriers to entry [sic] and removes impediments to a free and 
open market and national market system by making it easier and less 
costly for TPHs to participate in the markets. Accordingly, the 
Exchange believes that offering Web-based delivery of the Regulatory 
Element of Exchange's CE Program at a reduced cost and that lowering 
the cost of CE in general are goals that are consistent with the Act.

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. As FINRA has stated, the 
proposed rule change is specifically intended to reduce the burdens of 
continuing education on market participants while preserving the 
integrity its CE Programs. In general, reduction in cost and removal of 
barriers to entry encourages competition among market participants, 
particularly in situations where such rules are consistently employed 
across the markets. By bringing the Exchange's fees structure in line 
with that of FINRA, the Exchange believes it is removing impediments to 
free and open markets and encouraging competition between the Exchange 
and other markets that utilize FINRA's CE Programs. For the foregoing 
reasons, the Exchange believes that the proposed rule change will 
relieve burdens on, and otherwise promote, competition.

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 written 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 \19\ and paragraph (f) of Rule 19b-4 \20\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. 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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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 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-2015-119 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-2015-119. 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-2015-119 and should be 
submitted on or before February 9, 2016.
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    \21\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-00784 Filed 1-15-16; 8:45 am]
 BILLING CODE 8011-01-P