Document ID: SEC-2016-1373-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc
Posted Date: 2016-08-05T04:00Z

[Federal Register Volume 81, Number 151 (Friday, August 5, 2016)]
[Notices]
[Pages 51949-51951]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18568]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78450; File No. SR-CBOE-2016-051)

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to the Series 9/10 Examination Program

August 1, 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 July 27, 2016, Chicago Board Options Exchange, Incorporated 
(the ``Exchange'' or ``CBOE'') filed with the Securities and

[[Page 51950]]

Exchange Commission (the ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the CBOE. CBOE has designated the proposed rule change as 
``constituting a stated policy, practice, or interpretation with 
respect to the meaning, administration, or enforcement of an existing 
rule'' under Section 19(b)(3)(A)(i) of the Act \3\ and Rule 19b-4(f)(1) 
thereunder,\4\ which renders the proposal effective upon receipt of 
this filing by the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE is filing a proposal to adopt revisions to the content outline 
and selection specifications for the General Securities Sales 
Supervisor (Series 9/10) examination program.\5\ The revisions update 
the material to reflect changes to the laws, rules and regulations 
covered by the examination and to incorporate the functions and 
associated tasks currently performed by a General Securities Sales 
Supervisor. In addition, CBOE is proposing to adopt changes to the 
format of the content outline. CBOE is not proposing any textual 
changes to the By-Laws, Schedules to the By-Laws or Rules of CBOE. CBOE 
is proposing these revisions to adopt the revised Series 9/10 
examination program of the Financial Industry Regulatory Authority, 
Inc. (``FINRA''). FINRA currently administers Series 9/10 examinations 
on behalf of CBOE (and other self-regulatory organizations).
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    \5\ CBOE is also proposing corresponding revisions made by FINRA 
to the Series 9/10 question bank. CBOE is submitting this filing for 
immediate effectiveness pursuant to Section 19(b)(3)(A) of the act 
[sic] and Rule 19b-4(f)(1) thereunder.
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    The revised content outline is attached.\6\ The Series 9/10 
selection specifications were submitted to the Commission under 
separate cover by FINRA. FINRA submitted the Series 9/10 selection 
specifications in connection with a FINRA filing to revise its Series 
9/10 Examination Program.\7\ CBOE is in agreement with the selection 
specifications submitted by FINRA.
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    \6\ The Commission notes that the revised content outline is 
attached to the filing, not to this Notice. The content outline is 
available as part of the filing on CBOE's Web site.
    \7\ See Securities Exchange Act Release No. 76812 (December 31, 
2015), 81 FR 834 (January 7, 2016) (SR-FINRA-2015-058).
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    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
    Section 6(c)(3) of the Act \8\ authorizes CBOE to prescribe 
standards of training, experience, and competence for persons 
associated with CBOE Trading Permit Holders (``TPH''). In accordance 
with that provision, CBOE, in consultation with a committee of industry 
representatives, has advised FINRA in developing examinations that are 
designed to establish that persons associated with CBOE TPHs have 
attained specified levels of competence and knowledge, consistent with 
applicable registration requirements under CBOE rules. CBOE, in 
consultation with a committee of industry representatives, periodically 
reviews the content of the examinations to determine whether revisions 
are necessary or appropriate in view of changes pertaining to the 
subject matter covered by the examinations.
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    \8\ 15 U.S.C. 78f(c)(3).
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    CBOE Rule 9.2, in relevant part, states, ``No TPH organization 
shall be approved to transact options business with the public until 
those persons associated with it who are designated as Options 
Principals have been approved by and registered with the Exchange. 
Persons engaged in the supervision of options sales practices or a 
person to whom the designated general partner or executive officer 
(pursuant to Rule 9.8) or another Registered Options Principal 
delegates the authority to supervise options sales practices shall be 
designated as Options Principals.'' \9\
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    \9\ See CBOE Rule 9.2.
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    CBOE Rule 9.2, Interpretation and Policy .01 further states: 
``Individuals engaged in the supervision of options sales practices and 
designated as Options Principals are required to qualify as an Options 
Principal by passing the Registered Options Principals Examination 
(Series 4) or the Sales Supervision Examination (Series 9/10).'' \10\ 
The Exchange notes that, with the Series 9/10 examination, an 
individual is only qualified to supervise sales activities. The scope 
of responsibility associated with the Series 4 is broader. In that 
regard, CBOE Rule 9.2, Interpretation and Policy .02 states: 
``Individuals who are delegated responsibility pursuant to Rule 9.8 for 
reviewing the acceptance of discretionary accounts, for approving 
exceptions to a TPH organization's criteria or standards for uncovered 
options accounts, and for approval of communications, shall be 
designated as Options Principals and are required to qualify as an 
Options Principal by passing the Registered Options Principal 
Examination (Series 4).'' \11\
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    \10\ See CBOE Rule 9.2 Interpretation and Policy .01.
    \11\ See CBOE Rule 9.2 Interpretation and Policy .02. CBOE Rule 
9.8 pertains to the supervision of accounts and includes provisions 
on the duty to supervise, maintenance of customer records, internal 
controls, annual branch office inspections, risk-based surveillance 
and branch office identification, criteria for inspection programs, 
written reports, and reports to control persons.
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    In consultation with a committee of industry representatives, 
including representatives from CBOE, FINRA recently undertook a review 
of the Series 9/10 examination program. As a result of this review, 
FINRA filed revisions to the content outline to reflect changes to the 
laws, rules and regulations covered by the examination and to 
incorporate the functions and associated tasks currently performed by a 
General Securities Sales Supervisor. FINRA also made changes to the 
format of the content outline.\12\ CBOE is filing this rule change to 
reflect CBOE's adoption of the revisions to the Series 9/10 examination 
program that were filed by FINRA.
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    \12\ See SR-FINRA-2015-058, note 4 [sic], supra.
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    CBOE is proposing to adopt the revised Series 9/10 content outline, 
as revised by FINRA. FINRA revised the content outline to reflect 
changes to the laws, rules and regulations covered by the examination. 
The revised content outline is now divided into two parts with eight 
major job functions that are performed by a General Securities Sales 
Supervisor. The functions and

[[Page 51951]]

associated tasks, which appear in the revised content outline, reflect 
the day-to-day activities of a General Securities Sales Supervisor. 
CBOE is also proposing to adopt the changes made by FINRA to the format 
of the content outline, including the preface, sample questions and 
reference materials.
    FINRA also adjusted the number of examination questions assigned to 
each major job function to ensure that the overall examination better 
reflects the key tasks performed by a General Securities Sales 
Supervisor. The questions on the revised Series 9/10 examination will 
place greater emphasis on key tasks such as supervision of registered 
persons, sales practices and compliance. CBOE is proposing to adopt 
these revisions related to the Series 9/10 examination questions.
    Finally, CBOE is proposing to adopt the changes made by FINRA to 
the Series 9/10 selection specifications and question bank.
Availability of Content Outline
    The revised Series 9/10 content outline is available on FINRA's Web 
site, at www.finra.org/brokerqualifications/exams.
    CBOE is filing the proposed rule change for immediate 
effectiveness. CBOE will announce the proposed rule change in a 
Regulatory Circular.
2. Statutory Basis
    CBOE believes that the proposed revisions to the Series 9/10 
examination program are consistent with the provisions of Section 
6(b)(5) of the Act,\13\ which requires, among other things, that CBOE 
rules must be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, and, in 
general, to protect investors and the public interest, and Section 
6(c)(3) of the Act,\14\ which authorizes CBOE to prescribe standards of 
training, experience, and competence for persons associated with CBOE 
TPHs. CBOE believes that the proposed revisions will further these 
purposes by updating the examination program to reflect changes to the 
laws, rules and regulations covered by the examination and to 
incorporate the functions and associated tasks currently performed by a 
General Securities Sales Supervisor.
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    \13\ 15 U.S.C. 78f(b)(5).
    \14\ 15 U.S.C. 78f(c)(3).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The updated examination aligns 
with the functions and associated tasks currently performed by a 
General Securities Sales Supervisor and tests knowledge of the most 
current laws, rules, regulations and skills relevant to those functions 
and associated tasks. As such, the proposed revisions would make the 
examination more efficient and effective.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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 \15\ and paragraph (f)(1) of Rule 19b-4 
thereunder.\16\ 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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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(1).
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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-2016-051 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2016-051. 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-2016-051 and should be 
submitted on or before August 26, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-18568 Filed 8-4-16; 8:45 am]
 BILLING CODE 8011-01-P