Document ID: SEC-2011-1336-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2011-09-07T04:00Z

[Federal Register Volume 76, Number 173 (Wednesday, September 7, 2011)]
[Notices]
[Pages 55447-55449]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-22774]

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SECURITIES AND EXCHANGE COMMISSION

 Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change to Extend the Compliance Deadline for Qualification 
Pursuant to Rule 3.6A

 August 30, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``the ``Act''),\1\ notice is hereby given that on August 23, 2011, 
Chicago Board Options Exchange, Incorporated (``CBOE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by CBOE. The Exchange has 
designated this proposal as one 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,\2\ and Rule 19b-4(f((1) \3\ thereunder, which renders the proposal 
effective upon filing with 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\ 15 U.S.C. 78s(b)(3)(A)(i).
    \3\ 17 CFR 19b-4(f)(1).
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 I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (the ``Act''),\4\ the Exchange proposes to extend 
the September 19, 2011 deadline to October 29, 2011 to comply with its 
rules regarding registration and qualification of individual Trading 
Permit Holders and individual associated persons.\5\ CBOE is not 
proposing any textual changes to the Rules of CBOE. The text of the 
proposed rule change is available on the Exchange's Web site (http://www.cboe.org/legal), at the Exchange's Office of the Secretary and at 
the Commission's Public Reference Room.
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    \4\ 15 U.S.C. 78s(b)(1).
    \5\ The Commission notes that the extension until October 29, 
2011 is an extension of the time to pass the appropriate 
qualification exam. All individual Trading Permit Holders and 
individual associated persons not already registered in WebCRD were 
to be registered as of January 11, 2011. See Securities Exchange Act 
Release No. 63314 (November 12, 2010), 75 FR 70957 (November 19, 
2010), at 70958.
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 II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, CBOE 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. CBOE 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, Proposed Rule Change

1. Purpose
    Pursuant to Rule 15b7-1,\6\ promulgated under the Exchange Act,\7\ 
``No registered broker or dealer shall effect any transaction in * * * 
any security unless any natural person associated with such broker or 
dealer who effects or is involved in effecting such transaction is 
registered or approved in accordance with the standards of training, 
experience, competence, and other qualification 
standards[hellip]established by the rules of any national securities 
exchange[hellip]'' CBOE Rule 3.6A sets forth the requirements for 
registration and qualification of individual Trading Permit Holders and 
individual associated persons. In response to a request by the Division 
of Trading and Markets at the Securities and Exchange Commission (the 
``Commission'' or ``SEC''), CBOE recently amended its rules to expand 
its registration and qualification requirements set forth in CBOE Rule 
3.6A to include individual Trading Permit Holders and individual 
associated persons that are engaged or to be engaged in the securities 
business of a Trading Permit Holder or TPH organization.\8\ CBOE Rule 
3.6A provides that these individuals must be registered with the 
Exchange in the category of registration appropriate to the function to 
be performed as prescribed by the Exchange. Further, Rule 3.6A 
requires, among other things, that an individual Trading Permit Holder 
or individual associated person submit an application for registration 
and pass the appropriate qualification examination before the 
registration can become effective. The revised requirements apply to 
both CBOE and CBOE Stock Exchange (``CBSX'') Trading Permit Holders and 
their associated persons.
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    \6\ 17 CFR 240.15b7-1.
    \7\ 15 U.S.C. 78a et seq.
    \8\ See Securities Exchange Act Release No. 63314 (November 12, 
2010), 75 FR 70957 (November 19, 2010) (SR-CBOE-2010-084).
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    In conjunction with the registration requirements established by 
SR-CBOE-2010-084, three new qualification examinations became available 
on June 20, 2011 in the Central Registration Depository system 
(``WebCRD''), which is operated by the Financial Industry Regulatory 
Authority, Incorporated (``FINRA''). These registration categories 
include the following (the required qualification examinations and 
prerequisites, as applicable, associated with each registration 
category are in parentheses): PT--Proprietary Trader (Series 56), CT--
Proprietary Trader Compliance Officer (Series 14, Series 56 
prerequisite) and TP--Proprietary Trader Principal (Series 24, Series 
56 prerequisite). In the Approval Order for SR-CBOE-2010-084, the SEC 
established a deadline of August 12, 2011 for CBOE and CBSX individual 
Trading Permit Holders and individual

[[Page 55448]]

associated persons of CBOE and CBSX Trading Permit Holders to register 
for and pass the applicable qualification examination(s), approximately 
seven weeks from the date the qualification exams became available. 
CBOE recently submitted a rule filing extending the deadline until 
September 19, 2011.\9\ The International Securities Exchange, LLC 
(``ISE'') recently submitted a rule filing setting forth the content 
outline for the Series 56.\10\ In conjunction with this filing, ISE 
issued a Regulatory Information Circular \11\ establishing a deadline 
of October 29, 2011 for complying with its new registration and 
qualification requirements.
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    \9\ See Securities Exchange Act Release No. 64946 (July 21, 
2011), 76 FR 44972 (July 27, 2011) (SR-CBOE-2011-064).
    \10\ See Securities Exchange Act Release No. 65086 (August 10, 
2011), 76 FR 50796 (August 16, 2011) [sic] (SR-ISE-2011-036).
    \11\ See ISE Regulatory Information Circular 2011-15 (issued 
August 15, 2011).
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    CBOE respectfully requests to extend the September 19, 2011 
deadline to October 29, 2011 (or such other later compliance date as 
the Commission deems appropriate for the participating self-regulatory 
organizations) to be consistent with the deadline provided to ISE 
members to comply with the registration and qualification 
requirements.\12\ CBOE believes its proposal to extend this deadline is 
reasonable and necessary in an effort to implement consistent standards 
for registration and qualification across self-regulatory 
organizations.
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    \12\ The International Securities Exchange (``ISE'') received 
approval for a rule filing establishing substantially similar 
registration and qualification requirements on February 4, 2011. The 
Approval Order for SR-ISE-2010-115 provides that ``Associated 
persons of ISE members will have 90 days from the date the 
examination becomes available to take and pass the examination.'' 
See Securities Exchange Act Release No. 63843 (February 4, 2011), 76 
FR 7884 (February 11, 2011) (SR-ISE-2010-115).
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    CBOE continues to evaluate the reasonability of the proposed 
deadline in light of various factors including, but not limited to, the 
following: (i) Potential disruption to the marketplace if a Market-
Maker or Designated Primary Market-Maker does not satisfy the 
qualification requirements; (ii) system enforced delays in registering 
for an examination in WebCRD upon an individual's failure of a 
qualification examination; (iii) examination scheduling limitations due 
to the volume of individuals required to take the examination(s); and 
(iv) the ability for those individuals subject to heightened 
qualification examinations to prepare for, schedule and pass more than 
one examination in an extremely limited window of time. CBOE will 
continue to update Commission staff and evaluate whether additional 
rule filings are necessary to address reasonability concerns in 
conjunction with requiring compliance within the proposed time frame.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\13\ in general, and furthers the objectives of Section 6(b)(1) 
\14\ of the Act in particular, in that it is designed to enforce 
compliance by Exchange members and persons associated with its members 
with the rules of the Exchange. The Exchange also believes the proposed 
rule change furthers the objectives of Section 6(c)(3) \15\ of the Act, 
which authorizes CBOE to prescribe standards of training, experience 
and competence for persons associated with CBOE members, in that this 
filing is proposing to extend the deadline for compliance with the 
standards of training, experience and competence established by the 
Exchange. CBOE believes that its proposal is reasonable in that it 
establishes a deadline for compliance with the registration and 
qualification requirements that is consistent with the deadline in 
place for ISE members and their associated persons.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(1).
    \15\ 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 impose any 
burden on competition that is not necessary or appropriate in 
furtherance 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 solicited or received with respect to the 
proposed rule change.

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

    The foregoing proposed rule change will take effect upon filing 
with the Commission pursuant to Section 19(b)(3)(A)(i) of the Act \16\ 
and Rule 19b-4(f)(1) thereunder,\17\ because it constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule.
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    \16\ 15 U.S.C. 78s(b)(3)(A)(i).
    \17\ 17 CFR 240.19b-4(f)(1).
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    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.

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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2011-081 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-CBOE-2011-081. This file 
number should be included on the subject line if e-mail 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 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of CBOE. 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 publicly available. All

[[Page 55449]]

submissions should refer to File Number SR-CBOE-2011-081 and should be 
submitted on or before September 28, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-22774 Filed 9-6-11; 8:45 am]
BILLING CODE 8011-01-P