[Federal Register Volume 63, Number 19 (Thursday, January 29, 1998)]
[Notices]
[Pages 4507-4509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2187]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39575; File No. SR-CBOE-97-68]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Changes by the Chicago Board Options Exchange, Inc. Relating to
Continuing Education of Registered Persons
January 23, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934,\1\ notice is hereby given that on December 30, 1997, the Chicago
Board Options Exchange, Inc. (``CBOE'' or ``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 the CBOE. The Commission is publishing this notice to
solicit comments on the proposed rule changes from interested
persons.\2\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ The Commission is concurrently publishing notice of parallel
proposed rule changes from other self-regulatory organizations
relating to continuing education for registered persons. See
Securities Exchange Act Releases Nos. 39574 (NASD); 39576 (MSRB);
and 39577 (NYSE).
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[[Page 4508]]
I. Self Regulatory Organization's Statement of the Term of Substance of
the Proposed Rule Change
The CBOE, in support of the recommendations of The Securities
Industry/Regulatory Council on Continuing Education (``Council''),\3\
proposes to amend CBOE 9.3A Continuing Education of Registered Persons,
by strengthening the requirements applicable to registered persons and
implementing a new program specifically designed for managers and
supervisors.
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\3\ The Council is comprised of 6 self-regulatory organizations
(``SROs'') and 13 broker-dealer representatives to represent the
interests and needs of wide cross-section of the industry. The SROs,
in addition to the CBOE, are the American Stock Exchange; the
Municipal Securities Rulemaking Board; the National Association of
Securities Dealers; the New York Stock Exchange, and the
Philadelphia Stock Exchange.
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The text of the proposed rule change may be examined at the places
specified in Item IV 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 CBOE included statements
concerning the purpose of, and statutory basis for, the proposed rule
changes 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 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
The proposed rule change is to revise the CBOE's continuing
education requirements contained in Rule 9.3A. The continuing education
program consists of two parts--a Regulatory Element and a Firm Element.
The Regulatory Element requires registered persons to participate in an
interactive computer-based training at specified intervals and
encompasses regulatory and compliance issues, sales practice concerns
and business ethics. The current Regulatory Element contains content
common to all registered representatives, supervisory persons, as well
as other registration categories. This proposed rule change is intended
to strengthen the continuing education requirements for Registered
Representatives by implementing a new program component specifically
designed for managers and supervisors. In addition, it is contemplated
that in the future, specific programs may be implemented for other
registration categories.
The CBOE also proposes, as recommended by the Council, to require
ongoing participation in the Regulatory Element for the duration of a
registered person's career in the industry, specifically, on the second
registration anniversary and every three years thereafter (i.e., the
fifth, eighth, eleventh, etc. anniversaries), with no graduation from
the program. Under the current Rule 9.3A, after ten years an individual
does not have to participate in the computer-based training, unless
they have been subject to certain disciplinary action as enumerated in
the Rule. The CBOE also proposes to amend the rule to clarify that a
person's initial registration date shall establish the cycle of
anniversary dates for purposes of the Rule.
The proposed rule change will allow a one-time graduation from the
Regulatory Element for persons who, as of the effective date of the
rule amendments, have been registered for more than ten years and who
have not been the subject of a disciplinary action. However, persons
delegated supervisory responsibility or authority pursuant to Rule 9.8
will have to have been registered for more than ten years and not been
subject to any disciplinary action as enumerated in the Rule in order
to be covered by this one-time provision for graduation. Therefore,
those supervisors who have graduated from the program requirements
based on their initial registration date but who have not completed ten
years as a supervisor, will be required to re-enter the program.
Finally, the CBOE is proposing an amendment to the Firm Element
component of Rule 9.3A. The proposed rule change will require each
member organization's required analysis of training needs to
specifically focus on supervisory training needs. If it is determined
that there is a specific need for supervisory training, it must then be
addressed in the Firm Element training plan.
These amendments, which will be adopted uniformly with rule changes
of the other SRO Council members, will significantly enhance the
continuing education program by requiring all registered persons to
participate in the Regulatory Element on an ongoing basis.
2. Statutory Basis
The CBOE believes that the proposed rule change is consistent with
the requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange, and in particular, with
Section 6(c)(3) of the Act.\4\ Under that Section, it is the CBOE's
responsibility to prescribe standards of training, experience and
competence for persons associated with Exchange members and member
organizations. Pursuant to this statutory obligation, the CBOE has
proposed this rule change in order to enhance the established
continuing education program for registered persons.
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\4\ 15 U.S.C. 78f(c)(3).
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The proposed rule change is also consistent with the requirements
of Section 6(b)(5) of the Act.\5\ Section 6(b)(5) requires, among other
things, that the rules of an exchange be 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.
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\5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The CBOE does not believe that the proposed rule changes will
impose any burden on competition.
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 changes.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the publication of this notice in the Federal
Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
A. By order approve such proposed rule change, or
B. Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange
[[Page 4509]]
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 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 inspection and copying at the Commission's
Public Reference Room. Copies of such filing will also be available for
inspection and copying at the principal office of the CBOE. All
submissions should refer to the file number SR-CBOE-97-68 and should be
submitted by February 19, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-2187 Filed 1-28-98; 8:45 am]
BILLING CODE 8010-01-M
