[Federal Register Volume 75, Number 220 (Tuesday, November 16, 2010)]
[Notices]
[Pages 70057-70059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28749]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63286; File No. SR-EDGA-2010-16]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
EDGA Rules 2.5 and 11.4 To Permit Qualification and Registration of
Authorized Traders of Members Pursuant to Certain Foreign Examination
Modules Equivalent to the Series 7 Examination
November 9, 2010.
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 27, 2010, the EDGA Exchange, Inc. (the ``Exchange'' or
the ``EDGA'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II 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
The Exchange proposes to amend Rules 2.5 and 11.4 to permit
qualification and registration of Authorized Traders of Members
pursuant to certain foreign examination modules equivalent to the
Series 7 examination. The Exchange also proposes to make a technical
amendment to Rule 2.3. The text of the proposed rule change is
available on the Exchange's Web site at http://www.directedge.com, at
the Commission's Web site at http://www.sec.gov, at the Exchange's
principal office, and at the Public Reference Room of the Commission.
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 self-regulatory organization
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
Exchange Rules 2.5 and 11.4 both state that the Series 7 is
required for registration with the Exchange as an Authorized Trader.
The purpose of the proposed rule change is to expand the types of exams
that may satisfy the Exchange's Series 7 requirement by recognizing
foreign examination modules equivalent to the Series 7 examination.
The proposal would reduce duplicative qualification standards that
foreign registered representatives encounter to qualify as a U.S.
general securities registered representative. For example, the
examination modules for the U.K. (Series 17) and Canada (Series 37/38)
currently are accepted as equivalent to the U.S. Series 7 by the NYSE,
the Financial Industry Regulatory Authority (``FINRA''), the NASDAQ
Stock Market, NYSE AlterNext US [sic], NYSE Arca, the Chicago Board
Options Exchange (``CBOE''), and the BATS Exchange, Inc. (``BATS'').\3\
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\3\ See, e.g., Securities Exchange Act Release No. 27967 (May 1,
1990), 55 FR 19124 (May 8, 1990) (approving File No. SR-NYSE-89-22,
Series 17); Securities Exchange Act Release No. 36629, International
Series Release No. 909 (Dec. 21, 1995), 60 FR 67385, corrected,
Securities Exchange Act Release No. 36629A, International Series
Release No. 909A (Jan. 4, 1996), 61 FR 744 (Jan. 10, 1996)
(approving File No. SR-NYSE-95-29, Series 37 and Series 38);
Securities Exchange Act Release No. 36825 (Feb. 9, 1996), 61 FR 6052
(approving File No. SR-NASD-96-04, Series 37 and 38); Securities
Exchange Act Release No. 38274 (February 12, 1997), 62 FR 7485
(approving File No. SR-CBOE-97-04, Series 17, 37 and 38); Securities
Exchange Act Release No. 38921 (August 11, 1997), 62 FR 44023
(approving File No. SR-AMEX-97-26, Series 17, 37 and 38); see also
NASD Rule 1032(a)(2)(B) and (C); NASDAQ Rule 1032(a)(2)(B) and (C);
Securities Exchange Act Release No. 59292 (January 23, 2009), 74 FR
5690 (January 30, 2009) (approving File No. SR-BATS-2009-003).
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The Series 17 version, the United Kingdom--Limited General
Securities Registered Representative Examination, is for U.K.
registrants who have successfully completed the basic exam of the U.K.
and who are in good standing with the Financial Services Authority
(``FSA''). Essentially, this modified Series 7 examination deletes
those substantive sections of the standard Series 7 that overlap with
the FSA examination. The Series 17 is a 100 question examination, is
120 minutes in duration, and deals with U.S. securities laws,
regulations, sales practices and special products drawn from the
standard Series 7 examination.
The Series 37 version is for Canadian registrants who have
successfully completed the basic core module of the CSI Global
Education (``CSI'', formerly the Canadian Securities Institute)
program. The Series 38 version is for Canadian registrants who, in
addition to having successfully completed the basic core module of the
CSI program, have also successfully completed the Canadian option and
futures program. Both the Series 37 and 38 share topics and test
questions with the parent Series 7 program but cover only subject
matter that is not covered, or not covered in sufficient detail, on the
Canadian qualification examination. The Series 37 has 90 questions and
is 150 minutes in duration, while the Series 38, an abbreviated version
of the series 37, has only 45 questions and is 75 minutes in duration.
Forty-five questions pertaining to options from the series 37 were
omitted from the Series 38.
The Exchange wishes to give U.K. and Canadian registered
representatives the same advantage they have at other exchanges by
eliminating duplicative examinations. The Exchange believes that
acceptance of these examinations
[[Page 70058]]
will benefit both the Exchange and the foreign representatives affected
by the proposal. Accordingly, pursuant to the amended rules, as
proposed, the Exchange would approve the examination modules for the
U.K. (Series 17) and Canada (Series 37/38) as equivalent foreign
examination modules.\4\ The Exchange has added Interpretation .05 to
Rule 2.5 to define what it means to have passed an equivalent foreign
examination module.
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\4\ The Exchange notes that the U.K. (Series 17) and Canada
(Series 37/38) represent foreign examination modules that allow
persons in good standing with the securities regulators of their
respective countries to qualify as general securities registered
representatives (equivalent to Series 7 registrants) by successfully
completing certain modified general securities representative
examinations which were developed, along with others for other
foreign jurisdictions, by the New York Stock Exchange (``NYSE'')
more than 10 years ago.
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Technical Amendment to Rule 2.3(c):
The Exchange proposes to amend Rule 2.3 to clarify that all
Authorized Traders who are to function as Principals on the Exchange
shall be registered as Principals with the Exchange consistent with
paragraph (e) of Rule 2.3, which requires that there be at least one
such Principal registered.
2. Statutory Basis
The statutory basis for the Exchange's acceptance of these foreign
examination modules lies in Section 6(c)(3)(B) of the Act.\5\ Under
that section, it is the Exchange's responsibility to prescribe
standards of training, experience, and competence for persons
associated with Exchange Members. Pursuant to this statutory
obligation, the Exchange has adopted examinations that are administered
by other self-regulatory organizations to establish that Authorized
Traders of Exchange Members have attained specified levels of
competence and knowledge.
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\5\ 15 U.S.C. 78f(c)(3)(B).
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The rule change proposed in this submission is consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to a national securities exchange, and, in particular,
with the requirements of Section 6(b) of the Act.\6\ Specifically, the
proposed change is consistent with Section 6(b)(5) of the Act,\7\
because it would promote just and equitable principles of trade, remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system, and, in general, protect investors and
the public interest, by helping foreign representatives to qualify for
registration with the Exchange by reducing duplicative qualification
requirements. Accordingly, the modifications to EDGA Rules 2.5 and 11.4
promote just and equitable principles of trade, remove impediments to,
and perfect the mechanism of, a free and open market and a national
market system.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is 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
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 proposed rule change is effective upon filing pursuant to
Section 19(b)(3)(A) of the Act and paragraph (f)(6) of Rule 19b-4
thereunder, in that the proposed rule change: (i) Does not
significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) does not become operative for 30 days after the date of the
filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest;
provided the self-regulatory organization has given the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has requested that the Commission waive the 30-day operative
delay. The Commission believes that waiving the 30-day operative delay
is consistent with the protection of investors and the public interest,
as it will allow the Exchange to recognize proficiency examinations
already currently recognized by other self-regulatory organizations.
The Exchange has noted that foreign representatives who have passed
foreign examination modules equivalent to the Series 7 examination, are
registered with other self-regulatory organizations, and wish to
register with EDGA would be disadvantaged by having to wait for the
proposed rule changes to become operative. Accordingly, the Commission
designates the proposed rule change operative upon filing with the
Commission.\8\
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\8\ For the purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78(c)(f).
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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. 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 e-mail to [email protected]. Please include
File No. SR-EDGA-2010-16 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 No. SR-EDGA-2010-16. 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 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
[[Page 70059]]
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 a.m. and 3 p.m. Copies of such
filing also will be available for inspection and copying at the
principal office of EDGA. 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 No. SR-
EDGA-2010-16 and should be submitted on or before December 7, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28749 Filed 11-15-10; 8:45 am]
BILLING CODE 8011-01-P