Document ID: SEC-2018-1930-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq PHLX, LLC
Posted Date: 2018-12-14T05:00Z

[Federal Register Volume 83, Number 240 (Friday, December 14, 2018)]
[Notices]
[Pages 64417-64419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27075]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84765; File No. SR-Phlx-2018-79]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Update the 
Trading Floor Qualification Examination

December 10, 2018.
    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 November 30, 2018, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``SEC'' or

[[Page 64418]]

``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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to revise its floor qualification 
examination. Specifically, the Exchange proposes to delete obsolete 
questions, change the format of certain questions from ``true/false'' 
to multiple choice, add several new questions, and revise certain 
questions, as described further below.
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaqphlx.cchwallstreet.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 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 purpose of the proposed rule change is to improve the 
Exchange's program for qualification of members by updating its floor 
qualification examination. The Exchange has employed a written floor 
qualification examination, which is required for persons seeking to act 
as members on the trading floor, for many years.\3\ The examination was 
last amended in 2012.\4\
---------------------------------------------------------------------------

    \3\ See Rules 620(a) and 901(c). See also Rule 1061 applicable 
to Floor Brokers.
    \4\ Securities Exchange Act Release No. 67508 [sic] (July 26 
[sic], 2012), 77 FR 46141 (July 27, 2012 [sic]) (SR-Phlx-2012-96). 
See also Securities Exchange Act Release No. 63603 (December 22, 
2010), 75 FR 82419 (December 30, 2010) (SR-Phlx-2010-180); 
Securities Exchange Act Release No. 33304 (December 9, 1993), 58 FR 
65613 (December 15, 1993) (SR-Phlx-92-34).
---------------------------------------------------------------------------

    At this time, the Exchange proposes to update the examination in a 
variety of ways. The examination would continue to be comprised of 100 
questions. Those questions would be randomly and electronically 
selected from a question bank of 188 questions, an increase of 16 
questions from the existing question bank. The floor qualification 
examination would continue to be administered by the Exchange's 
membership department, and continue to require a passing score of 70 
during a 75 minute testing period.
    The Exchange proposes to delete 11 obsolete questions. Nine of the 
questions deleted test knowledge that is no longer applicable because 
of revisions to the PHLX rules. The other two questions deleted test 
knowledge no longer needed to trade on the Phlx floor. The Exchange 
also proposes to modify 55 questions by changing the format of those 
questions from ``true/false'' to multiple choice. The subject matter 
covered by each of those questions will not change. The Exchange 
further proposes to add 27 new questions. Twenty of the new questions 
generally test knowledge of the new Floor Broker Management System 
(``FBMS''). The remaining seven questions were added to expand the bank 
from which questions are selected. Finally, the Exchange notes that 
certain questions were revised to correct grammatical errors and 
standardize the answer format. With these changes, the total number of 
questions available for random and electronic selection will increase 
from 172 to 188.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \5\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \6\ in particular, in that it is designed to promote 
just and equitable principles of trade, 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. 
In addition, the Exchange believes that the proposed rule change is 
consistent with Section 6(c)(3)(B) of the Act,\7\ which authorizes 
exchanges to prescribe standards of training, experience and competence 
for persons associated with exchange members, and gives exchanges the 
authority to bar a natural person from becoming a member or a person 
associated with a member, if the person does not meet the standards of 
training, experience and competence prescribed in the rules of the 
exchange. The Exchange believes that revising its floor member 
qualification examination as proposed in this filing, including by 
deleting obsolete questions, changing the format of 55 questions from 
``true/false'' to multiple choice, and adding questions, including 
those that relate to the new FMBS [sic], will better test the knowledge 
of prospective floor members, and thereby enhance the Exchange's 
standards for training, experience and competence. In addition, the 
exchange is modifying the format of its ``true/false'' questions to 
multiple choice and making certain other changes, such as correcting 
grammatical errors and standardizing the answer format.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 15 U.S.C. 78f(c)(3)(B).
---------------------------------------------------------------------------

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 not necessary or appropriate in 
furtherance of the purposes of the Act.

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

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(1) 
\9\ thereunder, the Exchange has designated this proposal as one that 
constitutes a stated policy, practice or interpretation with respect to 
the meaning, administration, or enforcement of an existing rule of the 
SRO, and therefore has become effective.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

    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 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,

[[Page 64419]]

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-Phlx-2018-79 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-Phlx-2018-79. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-Phlx-2018-79 and should be submitted on 
or before January 4, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27075 Filed 12-13-18; 8:45 am]
 BILLING CODE 8011-01-P