[Federal Register Volume 75, Number 250 (Thursday, December 30, 2010)]
[Notices]
[Pages 82419-82420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32891]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63603; File No. SR-Phlx-2010-180]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Revising
Floor Qualification Examination
December 22, 2010
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on December 10, 2010, NASDAQ OMX PHLX LLC (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change, and an amendment
thereto on December 15, 2010, 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, as amended, from interested persons.\3\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Amendment No. 1.
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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questions, revise outdated questions and add several new questions, as
described further below.
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,\4\ for many years. The examination,
which has not been substantively amended for many years,\5\ covers many
areas of the Exchange's rules.
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\4\ See Rules 620(a) and 901(c). See also Rule 1061 applicable
to Floor Brokers.
\5\ Securities Exchange Act Release No. 33304 (December 9,
1993), 58 FR 65613 (December 15, 1993)(SR-Phlx-92-34).
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At this time, the Exchange proposes to update the exam in a variety
of ways. The exam would continue to be comprised of 100 questions,
randomly and electronically selected from a question bank of
approximately 148 questions. The floor qualification examination is
administered by the Exchange's membership department, and requires a
passing score of 70 during a 75 minute testing period.
In terms of outdated questions, the Exchange proposes to delete
about 31 obsolete questions, mostly pertaining to: (i) The ``Wheel,''
an obsolete method of allocating trades among specialist and Registered
Options Traders (``ROTs''); (ii) ``AUTO-X'' functionality and
specialists manually conducting an opening and executing trades, which
have been replaced by the current trading system, Phlx XL II; and (iii)
the ``ten-up'' guarantees that preceded displayed size for options and
the application of the Quote Rule to options.\6\
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\6\ For current requirements, see e.g., Rules 1080 and 1082.
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The Exchange also proposes to eliminate the foreign currency
options qualification examination, because there have been no foreign
currency options participants for many years.\7\ In addition, the
Exchange no longer offers the foreign currency options products that
were the subject of this examination, but rather now offers a U.S.
dollar-settled foreign currency option,\8\ which trades pursuant to the
Exchange's options trading rules that are covered on the floor
qualification exam.
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\7\ The Exchange intends to separately delete ``foreign currency
options participant'' and related terms from its rules.
\8\ See Securities Exchange Act Release No. 54989 (December 21,
2006), 71 FR 78506 (December 29, 2006)(SR-Phlx-2006-34).
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The Exchange proposes to modify approximately 17 questions
pertaining to electronic quoting, various changes in priority rules and
to reflect the existence of Options Exchange Officials (``OEOs''), who
replaced Floor Officials, as well as make various minor corrections
reflecting rule changes over time. Similarly, the Exchange proposes to
add approximately 46 new questions reflecting trade reporting, disputes
and OEO rulings, priority and trade allocation, spreads, openings,
halts and reopening, quoting obligations, order types, Floor Broker
obligations and Rule 703.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \9\ in general, and furthers the objectives of Section
6(b)(5) of the Act \10\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, 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,\11\ 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 should better test the knowledge of its floor
members, and thereby enhance the Exchange's standards for training,
experience and competence.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ 15 U.S.C. 78f(c)(3)(B).
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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.
[[Page 82420]]
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 \12\ and Rule 19b-
4(f)(1) \13\ 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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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 [email protected]. Please include
File Number SR-PHLX-2010-180 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-PHLX-2010-180. 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 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 publicly available. All
submissions should refer to File Number SR-PHLX-2010-180 and should be
submitted on or before January 20, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-32891 Filed 12-29-10; 8:45 am]
BILLING CODE 8011-01-P