Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Update the Trading Floor Qualification Examination
Federal Register, Volume 83 Issue 240 (Friday, December 14, 2018)
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
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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
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``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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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.
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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.
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Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
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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\
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\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).
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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.
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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.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ 15 U.S.C. 78f(c)(3)(B).
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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.
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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.
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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.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
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Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments concerning the foregoing,
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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 email protected. 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\
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\10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
FR Doc. 2018-27075 Filed 12-13-18; 8:45 am
BILLING CODE 8011-01-P
