[Federal Register Volume 83, Number 195 (Tuesday, October 9, 2018)]
[Notices]
[Pages 50727-50736]
[FR Doc No: 2018-21781]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84336; File No. SR-NYSE-2018-44]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Amendments To Rules
Regarding Qualification, Registration and Continuing Education
Applicable to Members and Member Organizations

October 2, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on September 27, 2018, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``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\ 15 U.S.C. 78a.
    \3\ 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 amendments to the Exchange's rules regarding
qualification, registration and continuing education requirements
applicable to members or member organizations. To the extent the
Exchange's rule proposal is intended to harmonize with Financial
Regulatory Authority, Inc. (``FINRA'') rules and thus promote
consistency within the securities industry, the Exchange is only
adopting rules that are relevant to the Exchange's members or member
organizations. The Exchange is not adopting registration categories
that are not applicable to members or member organizations because
members or member organizations do not engage in the type of business
that would require such registration. As such, the Exchange is amending
current Rule 345A regarding continuing education requirements to
reflect the FINRA rule; adopting Commentary .60 to current Rule 345A
regarding fingerprint information; adopting new Rule 1210 regarding
registration requirements and related Commentary to new Rule 1210;
adopting new Rule 1220 regarding registration categories \4\ and
related Commentary to new Rule 1220; and adopting new Rule 1230
regarding associated persons exempt from registration and related
Commentary to new Rule 1230. Each of these rule changes, which are
[sic] described in more detail below, would become operative on October
1, 2018. The proposed rule change is available on the Exchange's
website at www.nyse.com, at the principal office of the Exchange, and
at the Commission's Public Reference Room.
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    \4\ The relevant principal registration categories the Exchange
proposes to adopt are (1) Principal; (2) General Securities
Principal; (3) Compliance Officer; (4) Financial and Operations
Principal and Introducing Broker-Dealer Financial and Operations
Principal; (5) Securities Trader Principal; and (6) General
Securities Sales Supervisor. The relevant representative
registration categories the Exchange proposes to adopt are (1)
Representative; (2) General Securities Representative; and (3)
Securities Trader.
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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, 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 those 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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its qualification, registration, and
continuing education requirements applicable to members or member
organizations. The proposed amendments are intended to: (i) Provide
transparency and clarity with respect to the Exchange's registration,
qualification and examination requirements; (ii) amend its rules
relating to categories of registration and respective qualification
examinations required for ETP Holders that engage in trading activities
on the Exchange; (iii) harmonize the Exchange's qualification,
registration and examination rules with those of FINRA \5\ so as to
promote uniform standards across the securities industry; and (iv) add
new definitions of terms and make other conforming changes to enhance
the comprehensiveness and clarity of the Exchange's rules.\6\ The
proposed changes are discussed below.
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    \5\ See Securities Exchange Act Release No. 81098 (July 7,
2017), 82 FR 32419 (July 13, 2017) (SR-FINRA-2017-007) (Approval
Order) (the ``FINRA Filing''). The Exchange notes that in order to
maintain consistency with the FINRA Filing, the Exchange proposes to
incorporate certain terms from the relevant FINRA rule into the
Exchange's rule that may not be applicable to all member
organizations. For example, while member organizations may not be
engaged in ``investment banking'' activity, the Exchange proposes to
adopt that term within these registration rules to conform them to
the FINRA rules.
    \6\ The conforming changes the Exchange proposes would
substitute the term ``member or member organization'' for ``member''
and the term ``Exchange'' for ``FINRA.''
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A. Amendment to Rule 345, Commentary .10
    Rule 345, Commentary .10, provides the definition of a Securities
Trader as any person engaged in the purchase or sale of securities or
other similar instruments for the account of a member organization with
which such person is associated, as an employee or otherwise, and who
does not transact any business with the public. With this proposed rule
change, the Exchange proposes to adopt FINRA's definition of Securities
Trader (as described below) and therefore, proposes to add a reference
in Rule 345, Commentary .10 to Rule 2.1220(b)(3) [sic] as the
appropriate rule in the Exchange's Rulebook where the definition of
Securities Trader can be found.
    Further, Rule 345, Commentary .10, states that a Securities Trader
must be registered as such on Web CRD and pass the Series 57
examination. Given the formulation of the Securities Industry
Essentials (``SIE'') examination (discussed below) which all potential
representative-level registrants would be required to pass, the
Exchange proposes to amend the current rule to require that a
Securities Trader must register as such on Web CRD and must pass both
the SIE examination and the Series 57 examination.
B. Amendments to Rule 345A--Continuing Education Requirements
    Rule 345A provides the continuing education requirements of
registered persons \7\ subsequent to their initial qualification and
registration with the Exchange, and includes a Regulatory Element and a
Firm Element. The Regulatory Element applies to registered persons and
consists of periodic computer-based training on regulatory, compliance,
ethical, supervisory subjects and sales practice standards.

The Firm Element consists of at least an annual, member-developed and
administered training programs [sic] designed to keep registered
persons current regarding securities products, services and strategies
offered by the member or member organization.
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    \7\ For purposes of Rule 345A, the term ``registered person''
means any member, principal executive, registered representative, or
other person registered or required to be registered under Exchange
rules, but does not include any such person whose activities are
limited solely to the transaction of business on the Floor with
member or registered broker-dealers. See Rule 345A, Commentary .10.
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1. Regulatory Element
    The Exchange proposes to amend Rule 345A(a) to provide, consistent
with proposed Rule 2.1210 [sic], Commentary .08, that a waiver-eligible
person would be subject to a Regulatory Element program that correlates
to his or her most recent registration category, and that the content
of the Regulatory Element would be based on the same cycle had the
individual remain [sic] registered.\8\ The proposed amendment to Rule
345A(a) also provides that if a waiver-eligible person fails to
complete the Regulatory Element during the prescribed time frames, he
or she would lose waiver eligibility.\9\
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    \8\ The proposed change is substantially similar to that
contained in FINRA Rule 1240(a)(1).
    \9\ The proposed change is substantially similar to that
contained in FINRA Rule 1240(a)(2).
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    Further, the Exchange proposes to amend Rule 345A(a) to provide
that any person whose registration has been deemed inactive under the
rule may not accept or solicit business or receive any compensation for
the purchase or sale of securities. The proposed amendment provides,
however, that such person may receive trail or residual commissions
resulting from transactions completed before the inactive status,
unless the member or member organization with which the person is
associated has a policy prohibiting such trail or residual
commissions.\10\
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    \10\ The proposed change is substantially similar to that
contained in FINRA Rule 1240(a)(2).
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    Additionally, under Rule 345A(a), a registered person is required
to retake the Regulatory Element in the event that such person (i) is
subject to any statutory disqualification as defined in Section
3(a)(39) of the Exchange Act; (ii) is subject to suspension or to the
imposition of a fine of $5,000 or more for violation of any provision
of any securities law or regulation, or any agreement with or rule or
standard of conduct of any securities governmental agency, securities
self-regulatory organization, or as imposed by any such regulatory or
self-regulatory organization in connection with a disciplinary
proceeding; or (iii) is ordered as a sanction in a disciplinary action
to retake the Regulatory Element by any securities governmental agency
or self-regulatory organization. The Exchange proposes to amend Rule
345A(a) to provide an exception to a waiver-eligible person from
retaking the Regulatory Element and satisfy [sic] all of its
requirements.\11\
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    \11\ The proposed change is substantially similar to that
contained in FINRA Rule 1240(a)(3).
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2. Firm Element
    Current Rule 345A(b) provides that programs used to implement a
member's or member organization's training program must be appropriate
for the business of the member or member organization and, at a minimum
must cover specific matters concerning securities products, services,
and strategies offered by the member or member organization. The
Exchange proposes to amend the current rule to expand the minimum
standard for such training programs by requiring that, at a minimum, a
firm's training program must also cover training in ethics and
professional responsibility.\12\
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    \12\ The proposed change is substantially similar to that
contained in FINRA Rule 1240(b)(2).
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C. Proposed New Rule 345A--Commentary .60--Fingerprint Information \13\
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    \13\ The proposed rule is substantially similar to FINRA Rule
1010(d).
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    The Exchange proposes to adopt new Rule 345A, Commentary .60,
regarding the submission of fingerprint information by member
organizations. As proposed, upon filing an electronic Form U4 on behalf
of a person applying for registration, a member organization would be
required to promptly submit fingerprint information for that person. If
the member organization fails to submit the fingerprint information
within 30 days after the Exchange receives the electronic Form U4, the
person's registration shall be deemed inactive and the person would be
required to immediately cease all activities requiring registration and
would be prohibited from performing any duties and functioning in any
capacity requiring registration. The proposed rule further provides
allows [sic] the Exchange to administratively terminate a registration
that is inactive for a period of two years. However, a person whose
registration is administratively terminated may seek to reactivate his
or her registration by reapplying for registration and meeting the
qualification requirements under Exchange rules.
D. Proposed New Rules 1210 Through 1230
    As a general matter, FINRA administers qualification examinations
that are designed to establish that persons associated with member
organizations have attained specified levels of competence and
knowledge. Over time, the examination program has increased in
complexity to address the introduction of new products and functions,
and related regulatory concerns and requirements. As a result, today,
there are a large number of examinations, considerable content overlap
across the representative-level examinations and requirements for
individuals in various segments of the industry to pass multiple
examinations. To address these issues, FINRA has formulated a general
knowledge examination called the Securities Industry Essentials
examination that all potential representative-level registrants would
take.\14\ Rule changes related to the adoption of the SIE and other
proposed new rules are discussed below.
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    \14\ The SIE would assess basic product knowledge; the structure
and function of the securities industry markets, regulatory agencies
and their functions; and regulated and prohibited practices. In
particular, the SIE will cover four major areas. The first,
``Knowledge of Capital Markets,'' focuses on topics such as types of
markets and offerings, broker-dealers and depositories, and economic
cycles. The second, ``Understanding Products and Their Risks,''
covers securities products at a high level as well as associated
investment risks. The third, ``Understanding Trading, Customer
Accounts and Prohibited Activities,'' focuses on accounts, orders,
settlement and prohibited activities. The final area, ``Overview of
the Regulatory Framework,'' encompasses topics such as SROs,
registration requirements and specified conduct rules.
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1. Proposed Rule 1210--Registration Requirements \15\
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    \15\ The proposed rule is substantially similar to FINRA Rule
1210.
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    Proposed Rule 1210 provides that each person engaged in the
investment banking or securities business of a member organization must
register with the Exchange as a representative or principal in each
category of registration appropriate to his or her functions and
responsibilities as specified in proposed Rule 1220, unless exempt from
registration pursuant to proposed Rule 1230. Proposed Rule 1210 also
provides that such person is not qualified to function in any
registered capacity other than that for which the person is registered,
unless otherwise stated in the rules.
2. Proposed Rule 1210, Commentary .01--Permissive Registrations \16\
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    \16\ The proposed rule is substantially similar to FINRA Rule
1210.02.
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    The Exchange currently does not have a specific rule that provides
for permissive registrations. With this proposed rule change, and to
conform its rules to the FINRA rules, the Exchange proposes to adopt a
specific rule regarding permissive registrations.

Proposed Rule 1210, Commentary .01, allows any associated person to
obtain and maintain any registration permitted by a member
organization. For instance, an associated person of a member
organization working solely in a clerical or ministerial capacity would
be able to obtain and maintain a General Securities Representative
registration with the member organization. As another example, an
associated person of a member organization who is registered, [sic] and
functioning solely as a General Securities Representative would be able
to obtain and maintain a General Securities Principal registration with
the member organization. Further, proposed Rule 1210, Commentary .01,
allows an individual engaged in the securities business of a foreign
securities affiliate or subsidiary of a member organization to obtain
and maintain any registration permitted by the member organization.
    The Exchange is proposing to permit the registration of such
individuals for several reasons. First, a member organization may
foresee a need to move a former representative or principal who has not
been registered for two or more years back into a position that would
require such person to be registered. Currently, such persons are
required to requalify (or obtain a waiver of the applicable
qualification examinations) and reapply for registration. Second, the
proposed rule change would allow member organizations to develop a
depth of associated persons with registrations in the event of
unanticipated personnel changes. Finally, allowing registration in
additional categories encourages greater regulatory understanding.
    Individuals maintaining a permissive registration under the
proposed rule change would be considered registered persons and subject
to all Exchange rules, to the extent relevant to their activities.
Additionally, consistent with the requirements of the Exchange's
supervision rules, member organizations would be required to have
adequate supervisory systems and procedures reasonably designed to
ensure that individuals with permissive registrations do not act
outside the scope of their assigned functions. With respect to an
individual who solely maintains a permissive registration, such as an
individual working exclusively in an administrative capacity, the
individual's day-to-day supervisor may be a non-registered person.
However, for purposes of compliance with the Exchange's supervision
rules, a member organization would be required to assign a registered
supervisor who would be responsible for periodically contacting such
individual's day-to-day supervisor to verify that the individual is not
acting outside the scope of his or her assigned functions. If such
individual is permissively registered as a representative, the
registered supervisor must be registered as a representative or
principal. If the individual is permissively registered as a principal,
the registered supervisor must be registered as a principal.\17\
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    \17\ In either case, the registered supervisor of an individual
who solely maintains a permissive registration would not be required
to be registered in the same representative or principal
registration category as the permissively-registered individual.
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3. Proposed Rule 1210, Commentary .02--Qualification Examinations and
Waivers of Examinations \18\
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    \18\ The proposed rule is substantially similar to FINRA Rule
1210.03.
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    Proposed Rule 1210, Commentary .02, provides that before the
registration of a person as a representative can become effective under
proposed Rule 1210, such person must pass the SIE and an appropriate
representative-level qualification examination as specified in proposed
Rule 1220.\19\ Proposed Rule 1210, Commentary .02, also provides that
before the registration of a person as a principal can become effective
under proposed Rule 1210, such person must pass an appropriate
principal-level qualification examination as specified in proposed Rule
1220.
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    \19\ Proposed Rule 1220 sets forth each registration category
and applicable qualification examination for member organizations.
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    Further, proposed Rule 1210, Commentary .02, provides that if a
registered person's job functions change and he or she needs to become
registered in another representative-level category, he or she would
not need to pass the SIE again. Rather, the registered person would
need to pass only the appropriate representative-level qualification
examination.
    Moreover, proposed Rule 1210, Commentary .02, provides that all
associated persons, such as associated persons whose functions are
solely and exclusively clerical or ministerial, are eligible to take
the SIE. Proposed Rule 1210, Commentary .02, also provides that
individuals who are not associated persons of firms, such as members of
the general public, are eligible to take the SIE. The Exchange believes
that expanding the pool of individuals who are eligible to take the SIE
would enable prospective securities industry professionals to
demonstrate to prospective employers a basic level of knowledge prior
to submitting a job application. Further, this approach would allow for
more flexibility and career mobility within the securities industry.
While all associated persons of firms as well as individuals who are
not associated persons would be eligible to take the SIE pursuant to
the proposed rule, passing the SIE alone would not qualify them for
registration with the Exchange. Rather, to be eligible for registration
with the Exchange, an individual must pass an applicable representative
or principal qualification examination and complete the other
requirements of the registration process.
    Proposed Rule 1210, Commentary .02, also provides that the Exchange
may, in exceptional cases and where good cause is shown, pursuant to
the Rule 9600 Series, waive the applicable qualification examination(s)
and accept other standards as evidence of an applicant's qualifications
for registration. The proposed rule further provides that the Exchange
will only consider examination waiver requests submitted by a member
organization for individuals associated with the member organization
who are seeking registration in a representative- or principal-level
registration category. Moreover, the proposed rule states that the
Exchange will consider waivers of the SIE alone or the SIE and the
representative- and principal-level examination(s) for such
individuals. The Exchange would not consider a waiver of the SIE for
non-associated persons or for associated persons who are not
registering as representatives or principals.
4. Proposed Rule 1210, Commentary .03--Requirements for Registered
Persons Functioning as Principals for a Limited Period \20\
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    \20\ The proposed rule is substantially similar to FINRA Rule
1210.04.
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    Proposed Rule 1210, Commentary .03, provides that a member
organization may designate any person currently registered, or who
becomes registered, with the member organization as a representative to
function as a principal for a limited period, provided that such person
has at least 18 months of experience functioning as a registered
representative with [sic] the five-year period immediately preceding
the designation. The proposed rule is intended to ensure that
representatives designated to function as principals for the limited
period under the proposal have an appropriate level of registered
representative experience. The proposed rule clarifies that the
requirements of the rule apply to designations to any principal
category, including those categories that are not subject to a

prerequisite representative-level registration requirement, such as the
Financial and Operations Principal registration category.\21\
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    \21\ The Exchange notes that qualifying as a registered
representative is a prerequisite to qualifying as a principal except
with respect to the following principal-level registrations: (1)
Compliance Official; (2) Financial and Operations Principal; and (3)
Introducing Broker-Dealer Financial and Operations Principal.
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    The proposed rule also clarifies that the individual must fulfill
all applicable prerequisite registration, fee and examination
requirements before his or her designation as a principal. Further, the
proposed rule provides that in no event may such person function as a
principal beyond the initial 120 calendar days without having
successfully passed an appropriate principal qualification examination.
The proposed rule also provides an exception to the experience
requirement for principals who are designated by a member organization
to function in other principal categories for a limited period.
Specifically, the proposed rule states that a member organization may
designate any person currently registered, or who becomes registered,
with the member organization as a principal to function in another
principal category for 120 calendar days before passing any applicable
examinations.
5. Proposed Rule 1210, Commentary .04--Rules of Conduct for Taking
Examinations and Confidentiality of Examinations \22\
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    \22\ The proposed rule is substantially similar to FINRA Rule
1210.05.
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    Proposed Rule 1210, Commentary .04 states that associated persons
taking the SIE would be subject to the SIE Rules of Conduct, and
associated persons taking a representative or principal examination
would be subject to the Rules of Conduct for representative and
principal examinations. Pursuant to proposed Rule 1210, Commentary .04,
a violation of the SIE Rules of Conduct or the Rules of Conduct for
representative and principal examinations by an associated person would
be deemed to be a violation of Rule 2010. Moreover, if an associated
person is deemed to have violated the SIE Rules of Conduct or the Rules
of Conduct for representative and principal examinations, the
associated person may forfeit the results of the examination and may be
subject to disciplinary action by the Exchange.
    Further, the proposed rule states that individuals taking the SIE
who are not associated persons must agree to be subject to the SIE
Rules of Conduct. Among other things, the SIE Rules of Conduct would
require individuals to attest that they are not qualified to engage in
the investment banking or securities business based on passing the SIE
and would prohibit individuals from cheating on the examination or
misrepresenting their qualifications to the public subsequent to
passing the SIE. Moreover, non-associated persons may forfeit their SIE
results and may be prohibited from retaking the SIE if the Exchange
determines that they cheated on the SIE or that they misrepresented
their qualifications to the public subsequent to passing the SIE.
    The proposed rule further notes that the Exchange considers all
qualification examinations [sic] content to be highly confidential and
that the removal of examination content from an examination center,
reproduction, disclosure, receipt from or passing to any person, or use
for study purposes of any portion of such qualification examination or
any other use that would compromise the effectiveness of the
examinations and the use in any manner and at any time of the questions
or answers to the examinations is prohibited and would be deemed a
violation of Rule 2010.
6. Proposed Rule 1210, Commentary .05--Waiting Periods for Retaking a
Failed Examination \23\
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    \23\ The proposed rule is substantially similar to FINRA Rule
1210.06.
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    Proposed Rule 1210, Commentary .05 provides that any person who
fails a qualification examination may retake that examination after 30
calendar days from the date of the person's last attempt to pass that
examination. The proposed rule further provides that if a person fails
an examination three or more times in succession within a two-year
period, he or she would be prohibited from retaking the examination
either until a period of 180 calendar days from the date of the
person's last attempt to pass it [sic]. These waiting periods would
apply to the SIE and the representative- and principal-level
examinations. Moreover, the proposed rule provides that non-associated
persons taking the SIE must agree to be subject to the same waiting
periods for retaking the SIE.
7. Proposed Rule 1210, Commentary .06--All Registered Persons Must
Satisfy the Regulatory Element of Continuing Education \24\
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    \24\ The proposed rule is substantially similar to FINRA Rule
1210.07.
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    Pursuant to Rule 345A, the CE requirements applicable to registered
persons consist of a Regulatory Element \25\ and a Firm Element.\26\
The Regulatory Element applies to registered persons and must be
completed within prescribed time frames.\27\ For purposes of the
Regulatory Element, a registered person is any member, principal
executive, registered representative, or other person registered or
required to be registered under Exchange rules, but does not include
any such person whose activities are limited solely to the transaction
of business on the Floor with member [sic] or registered broker-
dealers. The Firm Element consists of annual, member organization-
developed and administered training programs designed to keep covered
registered persons current regarding securities products, services and
strategies offered by the member organization. For purposes of the Firm
Element, the term covered registered persons means any person
registered with a member organization who has direct contact with
customers in the conduct of the member organization's securities sales,
trading and investment banking activities and to the immediate
supervisors of such persons.
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    \25\ See Rule 345A(a).
    \26\ See Rule 345A(b).
    \27\ Pursuant to Rule 345A(a), each specified registered person
is required to complete the Regulatory Element initially within 120
days after the person's second registration anniversary date and,
thereafter, within 120 days after every third registration
anniversary date. A registered person who has not completed the
Regulatory Element program within the prescribed time frames will
have his or her registrations deemed inactive and designated as ``CE
inactive'' on the CRD system until such time as the requirements of
the program have been satisfied. A CE inactive person is prohibited
from performing, or being compensated for, any activities requiring
registration, including supervision. Moreover, if a registered
person is CE inactive for a two-year period, the Exchange will
administratively terminate the person's registration status. The
two-year period would be calculated from the date the person becomes
CE inactive. In either case, such person must requalify (or obtain a
waiver of the applicable qualification examination(s)) to be re-
eligible for registration.
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    The Exchange believes that all registered persons, regardless of
their activities, should be subject to the Regulatory Element of the CE
requirements so that they can keep their knowledge of the securities
industry current. Therefore, the Exchange proposes to adopt Rule 1210,
Commentary .06, to clarify that all registered persons, including those
who solely maintain a permissive registration, are required to satisfy
the Regulatory Element, as specified in Rule 345A(a). The Exchange is
making corresponding changes to Rule 345A(a) [sic]. The Exchange is not
proposing any changes to the Firm Element requirement at this time.
Individuals

who have passed the SIE but not a representative- or principal-level
examination and do not hold a registered position would not be subject
to any CE requirements.
    Proposed Rule 1210, Commentary .06, also provides that a registered
person of a member organization who becomes CE inactive would not be
permitted to be registered in another registration category with the
member organization or be registered in any registration category with
another member organization, until the person has satisfied the
Regulatory Element.
8. Proposed Rule 1210, Commentary .07--Lapse of Registration and
Expiration of the SIE \28\
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    \28\ The proposed rule is substantially similar to FINRA Rule
1210.08.
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    Proposed Rule 1210, Commentary .07, provides that any person who
was last registered as a representative two or more years immediately
preceding the date of receipt by the Exchange of a new application for
registration as a representative is required to pass a qualification
examination for representatives appropriate to the category of
registration as specified in proposed Rule 1220(b). Proposed Rule 1210,
Commentary .07, also sets forth that a passing result on the SIE would
be valid for up to four years. Therefore, under the proposed rule
change, an individual who passes the SIE and is an associated person of
a member organization at the time would have up to four years from the
date he or she passes the SIE to pass a representative-level
examination to register as a representative with that member
organization, or a subsequent member organization, without having to
retake the SIE. In addition, an individual who passes the SIE and is
not an associated person at the time would have up to four years from
the date he or she passes the SIE to become an associated person of a
member organization and pass a representative-level examination and
register as a representative without having to retake the SIE.
    Moreover, an individual holding a representative-level registration
who leaves the industry after the effective date of this proposed rule
change would have up to four years to re-associate with a member
organization and register as a representative without having to retake
the SIE. However, the four-year expiration period in the proposed rule
change extends only to the SIE, and not the representative- and
principal-level registrations. The representative- and principal-level
registrations would continue to be subject to a two-year expiration
period as is the case today.
    Finally, proposed Rule 1210, Commentary .07, clarifies that, for
purposes of the proposed rule, an application would not be considered
to have been received by the Exchange if that application does not
result in a registration.
9. Proposed Rule 1210, Commentary .08--Waiver of Examinations for
Individuals Working for a Financial Services Industry Affiliate of a
Member Organization \29\
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    \29\ The proposed rule is substantially similar to FINRA Rule
1210.09.
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    Proposed Rule 1210, Commentary .08, provides the process for
individuals working for a financial services industry affiliate of a
member organization \30\ to terminate their registrations with the
member organization and be granted a waiver of their requalification
requirements upon re-registering with a member organization, provided
the firm that is requesting the waiver and the individual satisfy the
criteria for a Financial Services Affiliate (``FSA'') waiver.
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    \30\ Proposed Rule 1210, Commentary .07 [sic], defines a
``financial services industry affiliate of a member organization''
as a legal entity that controls, is controlled by or is under common
control with a member organization and is regulated by the SEC,
CFTC, state securities authorities, federal or state banking
authorities, state insurance authorities, or substantially
equivalent foreign regulatory authorities.
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    Under the proposed waiver process, the first time a registered
person is designated as eligible for a waiver based on the FSA
criteria, the member organization with which the individual is
registered would notify the Exchange of the FSA designation. The member
organization would concurrently file a full Form U5 terminating the
individual's registration with the firm, which would also terminate the
individual's other SRO and state registrations. To be eligible for
initial designation as an FSA-eligible person by a member organization,
an individual must have been registered for a total of five years
within the most recent 10-year period prior to the designation,
including for the most recent year with that member organization. An
individual would have to satisfy these preconditions only for purposes
of his or her initial designation as an FSA-eligible person, and not
for any subsequent FSA designation(s). Thereafter, the individual would
be eligible for a waiver for up to seven years from the date of initial
designation,\31\ provided that the other conditions of the waiver, as
described below, have been satisfied. Consequently, a member
organization other than the member organization that initially
designated an individual as an FSA-eligible person may request a waiver
for the individual and more than one member organization may request a
waiver for the individual during the seven-year period.\32\
---------------------------------------------------------------------------

    \31\ Individuals would be eligible for a single, fixed seven-
year period from the date of initial designation, and the period
would not be tolled or renewed.
    \32\ The following examples illustrate this point:
    Example 1. Firm A designates an individual as an FSA-eligible
person by notifying the Exchange and files a Form U5. The individual
joins Firm A's financial services affiliate. Firm A does not submit
a waiver request for the individual. After working for Firm A's
financial services affiliate for three years, the individual
directly joins Firm B's financial services affiliate for three
years. Firm B then submits a waiver request to register the
individual.
    Example 2. Same as Example 1, but the individual directly joins
Firm B after working for Firm A's financial services affiliate, and
Firm B submits a waiver request to register the individual at that
point in time.
    Example 3. Firm A designates an individual as an FSA-eligible
person by notifying the Exchange and files a Form U5. The individual
joins Firm A's financial services affiliate for three years. Firm A
then submits a waiver request to re-register the individual. After
working for Firm A in a registered capacity for six months, Firm A
re-designates the individual as an FSA-eligible person by notifying
the Exchange and files a Form U5. The individual rejoins Firm A's
financial services affiliate for two years, after which the
individual directly joins Firm B's financial services affiliate for
one year. Firm B then submits a waiver request to register the
individual.
    Example 4. Same as Example 3, but the individual directly joins
Firm B after the second period of working for Firm A's financial
services affiliate, and Firm B submits a waiver request to register
the individual at that point in time.
---------------------------------------------------------------------------

    An individual designated as an FSA-eligible person would be subject
to the Regulatory Element of CE while working for a financial services
industry affiliate of a member organization. The individual would be
subject to a Regulatory Element program that correlates to his or her
most recent registration category, and CE would be based on the same
cycle had the individual remained registered. If the individual fails
to complete the prescribed Regulatory Element during the 120-day window
for taking the session, he or she would lose FSA eligibility (i.e., the
individual would have the standard two-year period after termination to
re-register without having to retake an examination). The Exchange is
making corresponding changes to Rule 345A.
    Upon registering an FSA-eligible person, a firm would file a Form
U4 and request the appropriate registration(s) for the individual. The
firm would also submit an examination waiver request

to the Exchange,\33\ similar to the process used today for waiver
requests, and it would represent that the individual is eligible for an
FSA waiver based on the conditions set forth below. The Exchange would
review the waiver request and make a determination of whether to grant
the request within 30 calendar days of receiving the request. The
Exchange would summarily grant the request if the following conditions
are met:
---------------------------------------------------------------------------

    \33\ The Exchange would consider a waiver of the representative-
level qualification examination(s), the principal-level
qualification examination(s) and the SIE, as applicable.
---------------------------------------------------------------------------

    (1) Prior to the individual's initial designation as an FSA-
eligible person, the individual was registered for a total of five
years within the most recent 10-year period, including for the most
recent year with the member organization that initially designated the
individual as an FSA-eligible person;
    (2) The waiver request is made within seven years of the
individual's initial designation as an FSA-eligible person by a member
organization;
    (3) The initial designation and any subsequent designation(s) were
made concurrently with the filing of the individual's related Form U5;
    (4) The individual continuously worked for the financial services
affiliate(s) of a member organization since the last Form U5 filing;
    (5) The individual has complied with the Regulatory Element of CE;
and
    (6) The individual does not have any pending or adverse regulatory
matters, or terminations, that are reportable on the Form U4, and has
not otherwise been subject to a statutory disqualification while the
individual was designated as an FSA-eligible person with a member
organization.
    Following the Form U5 filing, an individual could move between the
financial services affiliates of a member organization so long as the
individual is continuously working for an affiliate. Further, a member
organization could submit multiple waiver requests for the individual,
provided that the waiver requests are made during the course of the
seven-year period.\34\ An individual who has been designated as an FSA-
eligible person by a member organization would not be able to take
additional examinations to gain additional registrations while working
for a financial services affiliate of a member organization.
---------------------------------------------------------------------------

    \34\ For example, if a member organization submits a waiver
request for an FSA-eligible person who has been working for a
financial services affiliate of the member organization for three
years and re-registers the individual, the member organization could
subsequently file a Form U5 and re-designate the individual as an
FSA-eligible person. Moreover, if the individual works with a
financial services affiliate of the member organization for another
three years, the member organization could submit a second waiver
request and re-register the individual upon returning to the member
organization.
---------------------------------------------------------------------------

10. Proposed Rule 1210, Commentary .09--Status of Persons Serving in
the Armed Forces of the United States \35\
---------------------------------------------------------------------------

    \35\ The proposed rule is substantially similar to FINRA Rule
1210.10.
---------------------------------------------------------------------------

    Proposed Rule 1210, Commentary .09, provides specific relief to
registered persons serving in the Armed Forces of the United States.
Among other things, the proposed rule permits a registered person of a
member organization who volunteers for or is called into active duty in
the Armed Forces of the United States to be registered in an inactive
status and remain eligible to receive ongoing transaction-related
compensation. The proposed rule also includes specific provisions
regarding the deferment of the lapse of registration requirements for
formerly registered persons serving in the Armed Forces of the United
States. The proposed rule further requires that the member organization
with which such person is registered promptly notify the Exchange of
such person's return to employment with the member organization. The
proposed rule would require a member organization that is a sole
proprietor to also similarly notify the Exchange of his or her return
to participation in the investment banking or securities business. The
proposed rule also provides that the Exchange would defer the lapse of
the SIE for formerly registered persons serving in the Armed Forces of
the United States.
E. Proposed New Rule 1220--Registration Categories \36\
---------------------------------------------------------------------------

    \36\ The Exchange is not adopting the following categories from
the FINRA Filing because member organizations do not engage in the
type of business that would require registration with the Exchange:
Investment Banking Principal, Research Principal, Registered Options
Principal, Government Securities Principal, Investment Company and
Variable Contracts Products Principal, Direct Participation Programs
Principal, Private Securities Offerings Principal, Supervisory
Analyst, Operations Professional, Investment Banking Representative,
Research Analyst, Investment Company and Variable Contracts Products
Representative, Direct Participation Programs Representative, and
Private Securities Offering Representative. The Exchange is also not
adopting the following categories because the FINRA Filing
eliminated them: Order Processing Assistant Representative, United
Kingdom Securities Representative, Canadian Securities
Representative, Options Representative, Corporate Securities
Representative and Government Securities Representative.
---------------------------------------------------------------------------

1. Proposed Rule 1220(a)(1)--Principal
    As set forth in proposed Rule 1220(a)(1), for purposes of these
registration rules, the term ``Principal'' [sic] to mean any Person
Associated with a member organization actively engaged in the
management of the member organization's securities business, including
supervision, solicitation, conduct of the member organization's
business, or the training of Authorized Traders and Persons Associated
with a member organization for any of these functions. Such Persons
include Sole Proprietors, Officers, Partners, and Directors of
Corporations.
    For purposes of proposed Rule 1220(a)(1), the phrase ``actively
engaged in the management of the member organization's securities
business'' includes the management of, and the implementation of
corporate policies related to, such business. The term also includes
managerial decision-making authority with respect to the member
organization's securities business and management-level
responsibilities for supervising any aspect of such business, such as
serving as a voting member of the member organization's executive,
management or operations committee.
2. Proposed Rule 1220(a)(2)--General Securities Principal \37\
---------------------------------------------------------------------------

    \37\ The proposed rule is substantially similar to FINRA Rule
1220(a)(2).
---------------------------------------------------------------------------

    Proposed Rule 1220(a)(2)(A) states that each principal as defined
in proposed Rule 1220(a)(1) is required to register with the Exchange
as a General Securities Principal, subject to the following exceptions.
The proposed rule provides that if a principal's activities include the
functions of a Compliance Officer, a Financial and Operations Principal
(or an Introducing Broker-Dealer Financial and Operations Principal, as
applicable), a Principal Financial Officer, a Principal Operations
Officer, or a Securities Trader Principal, then the principal must
appropriately register in one or more of these categories.
    Proposed Rule 1220(a)(2)(A) further provides that if a principal's
activities are limited solely to the functions of a General Securities
Sales Supervisor, then the principal may appropriately register in that
category in lieu of registering as a General Securities Principal.
    Proposed Rule 1220(a)(2)(B) requires that an individual registering
as a General Securities Principal satisfy the General Securities
Representative prerequisite registration and pass the General
Securities Principal qualification examination. Proposed Rule
1220(a)(2)(B) also clarifies that an individual may register as a
General Securities Sales Supervisor and pass the

General Securities Sales Supervisor qualification examination in lieu
of passing the General Securities Principal examination.
    As a general matter, the Exchange currently recognizes the
Corporate Securities Representative but would no longer recognize this
registration category given its elimination by FINRA. Proposed Rule
1220(a)(2)(B), however, provides that, subject to the lapse of
registration provisions in proposed Rule 1210, Commentary .07, each
person registered with the Exchange as a Corporate Securities
Representative and a General Securities Principal on October 1, 2018
and each person who was registered with the Exchange as a Corporate
Securities Representative and a General Securities Principal within two
years prior to October 1, 2018 would be qualified to register as a
General Securities Principal without having to take any additional
qualification examinations, provided that such person's supervisory
responsibilities in the investment banking and securities business of a
member organization are limited to corporate securities activities of
the member organization. The proposed rule further provides that all
other individuals registering as General Securities Principals after
October 1, 2018 shall, prior to or concurrent with such registration,
become registered as a General Securities Representative and either (1)
pass the General Securities Principal qualification examination; or (2)
register as a General Securities Sales Supervisor and pass the General
Securities Sales Supervisor qualification examination.
3. Proposed Rule 1220(a)(3)--Compliance Officer \38\
---------------------------------------------------------------------------

    \38\ The proposed rule is substantially similar to FINRA Rule
1220(a)(3).
---------------------------------------------------------------------------

    Proposed Rule 1220(a)(3) establishes a Compliance Officer
registration category and requires all persons designated as CCOs on
Schedule A of Form BD to register as Compliance Officers, subject to an
exception for member organizations engaged in limited investment
banking or securities business. The proposed rule only addresses the
registration requirements for CCOs. However, consistent with proposed
Rule 1210, Commentary .01 relating to permissive registrations, a firm
may allow other associated persons to register as Compliance Officers.
    In addition, the Exchange is proposing to provide CCOs of firms
that engage in limited investment banking or securities business with
greater flexibility to satisfy the qualification requirements for CCOs.
Specifically, proposed Rule 1220(a)(3) set forth the following
qualification requirements for Compliance Officer registration:
     Subject to the lapse of registration provisions in
proposed Rule 1210, Commentary .07, each person registered with the
Exchange as a General Securities Representative and a General
Securities Principal on October 1, 2018 and each person who was
registered with the Exchange as a General Securities Representative and
a General Securities Principal within two years prior to October 1,
2018 would be qualified to register as Compliance Officers without
having to take any additional examinations. In addition, subject to the
lapse of registration provisions in proposed Rule 1210, Commentary .07,
individuals registered as Compliance Officials in the CRD system on
October 1, 2018 and individuals who were registered as such within two
years prior to October 1, 2018 would also be qualified to register as
Compliance Officers without having to take any additional examinations;
[sic]
     All other individuals registering as Compliance Officers
after October 1, 2018 would have to: (1) Satisfy the General Securities
Representative prerequisite registration and pass the General
Securities Principal qualification examination; or (2) pass the
Compliance Official qualification examination.
     An individual designated as a CCO on Schedule A of Form BD
of an ETP Holder [sic] that is engaged in limited investment banking or
securities business may be registered in a principal category under
proposed Rule 1220(a) that corresponds to the limited scope of the
member organization's business.
4. Proposed Rule 1220(a)(4)--Financial and Operation Principal and
Introducing Broker-Dealer Financial and Operations Principal \39\
---------------------------------------------------------------------------

    \39\ The proposed rule is substantially similar to FINRA Rule
1220(a)(4).
---------------------------------------------------------------------------

    Proposed Rule 1220(a)(4) provides that each principal who is
responsible for the financial and operational management of a member
organization that has a minimum net capital requirement of $250,000
under SEA Rules 15c3-1(a)(1)(ii) and 15c3-1(a)(2)(i), or a member
organization that has a minimum net capital requirement of $150,000
under SEA Rule 15c3-1(a)(8) must be designated as a Financial and
Operations Principal. In addition, proposed Rule 1220(a)(4) provides
that a principal who is responsible for the financial and operational
management of a member organization that is subject to the net capital
requirements of SEA Rule 15c3-1, other than a member organization that
is subject to the net capital requirements of SEA Rules 15c3-
1(a)(1)(ii), (a)(2)(i) or (a)(8), must be designated and registered as
either a Financial and Operations Principal or an Introducing Broker-
Dealer Financial and Operations Principal. Financial and Operations
Principals and Introducing Broker-Dealer Financial and Operation
Principals are not subject to a prerequisite representative
registration, but they must pass the Financial and Operations Principal
or Introducing Broker-Dealer Financial and Operations Principal
examination, as applicable.
    Additionally, proposed Rule 1220(a)(4)(B) requires a member
organization to designate a Principal Financial Officer with primary
responsibility for the day-to-day operations of the business, including
overseeing the receipt and delivery of securities and funds,
safeguarding customer and firm assets, calculation and collection of
margin from customers and processing dividend receivable and payables
and reorganization redemptions and those books and records related to
such activities. Further, the proposed rule requires that a firm's
Principal Financial Officer and Principal Operations Officer qualify
and register as Financial and Operations Principals or Introducing
Broker-Dealer Financial and Operations Principals, as applicable.
    Because the financial and operational activities of member
organizations that neither self-clear nor provide clearing services are
more limited, such member organizations may designate the same person
as the Principal Financial Officer, Principal Operations Officer and
Financial and Operations Principal or Introducing Broker-Dealer
Financial and Operations Principal (that is, such member organizations
are not required to designate different persons to function in these
capacities).
    Given the level of financial and operational responsibility at
clearing and self-clearing members, the Exchange believes that it is
necessary for such member organizations to designate separate persons
to function as Principal Financial Officer and Principal Operations
Officer. Such persons may also carry out the other responsibilities of
a Financial and Operations Principal, such as supervision of
individuals engaged in financial and operational activities. In
addition, the proposed rule provides that a clearing or self-clearing
member organization that is limited in size and

resources may request a waiver of the requirement to designate separate
persons to function as Principal Financial Officer and Principal
Operations Officer.
5. Proposed Rule 1220(a)(5)--Securities Trader Principal \40\
---------------------------------------------------------------------------

    \40\ The proposed rule is substantially similar to FINRA Rule
1220(a)(7).
---------------------------------------------------------------------------

    Proposed Rule 1220(a)(5) requires that a principal responsible for
supervising the securities trading activities specified in proposed
Rule 1220(b)(3) register as a Securities Trader Principal. The proposed
rule requires that individuals registering as Securities Trader
Principals must be registered as Securities Traders and pass the
General Securities Principal qualification examination.
6. Proposed Rule 1220(a)(6)--General Securities Sales Supervisor \41\
---------------------------------------------------------------------------

    \41\ The proposed rule is substantially similar to FINRA Rule
1220(a)(10).
---------------------------------------------------------------------------

    Proposed Rule 1220(a)(6) provides that a principal may register
with the Exchange as a General Securities Sales Supervisor if his or
her supervisory responsibilities in the investment banking or
securities business of a member organization are limited to the
securities sales activities of the member organization, including the
approval or customer accounts, training of sales and sales supervisory
personnel and the maintenance of records of original entry or ledger
accounts of the member organization required to be maintained in branch
offices by Exchange Act record-keeping rules.
    A person registering as a General Securities Sales Supervisor must
satisfy the General Securities Representative prerequisite registration
and pass the General Securities Sales Supervisor examinations.\42\
Moreover, a General Securities Sales Supervisor is precluded from
performing any of the following activities: (1) Supervision of the
origination and structuring of underwritings; (2) supervision of
market-making commitments; (3) supervision of the custody of firm or
customer funds or securities for purposes of SEA Rule 15c3-3; or (4)
supervision of overall compliance with financial responsibility rules.
---------------------------------------------------------------------------

    \42\ An individual may also register as a General Securities
Sales Supervisor by passing a combination of other principal-level
examinations.
---------------------------------------------------------------------------

7. Proposed Rule 1220(b)(1)--Representative \43\
---------------------------------------------------------------------------

    \43\ The proposed rule is substantially similar to FINRA Rule
1220(b)(1).
---------------------------------------------------------------------------

    Proposed Rule 1220(b)(1) defines a representative as any person
associated with a member organization, including assistant officers
other than principals, who is engaged in the member organization's
investment banking or securities business, such as supervision,
solicitation, conduct of business in securities or the training of
persons associated with a member organizations for any of these
functions.
8. Proposed Rule 1220(b)(2)--General Securities Representative \44\
---------------------------------------------------------------------------

    \44\ The proposed rule is substantially similar to FINRA Rule
1220(b)(2).
---------------------------------------------------------------------------

    Proposed Rule 1220(b)(2)(A) states that each representative as
defined in proposed Rule 1220(b)(1) is required to register with the
Exchange as a General Securities Representative, subject to the
following exceptions. The proposed rule provides that if a
representative's activities include the function of a Securities
Trader, then the representative must appropriately register in that
category.
    The proposed rule further provides that, subject to the lapse of
registration provisions in proposed Rule 1210, Commentary .07, each
person registered with the Exchange as a General Securities
Representative on October 1, 2018 and each person who was registered
with the Exchange as a General Securities Representative within two
years prior to October 1, 2018 would be qualified to register as a
General Securities Representative without having to take any additional
qualification examinations. Additionally, the proposed rule would
require that individuals registering as General Securities
Representatives after October 1, 2018 shall, prior to or concurrent
with such registration, pass the SIE and the General Securities
Representative examination.
9. Proposed Rule 1220(b)(3)--Securities Trader \45\
---------------------------------------------------------------------------

    \45\ The proposed rule is substantially similar to FINRA Rule
1220(b)(4).
---------------------------------------------------------------------------

    Proposed Rule 1220(b)(3) provides that each representative as
defined in proposed Rule 1220(b)(1) is required to register as a
Securities Trader if, with respect to transactions in equity (including
equity options), preferred or convertible debt securities, such person
is engaged in proprietary trading, the execution of transactions on an
agency basis, or the direct supervision of such activities. The
proposed rule provides an exception from the registration requirement
for any associated person of a member organization whose trading
activities are conducted primarily on behalf of an investment company
that is registered with the SEC pursuant to the Investment Company Act
and that controls, is controlled by, or is under common control with a
member organization. The Exchange proposes to adopt FINRA's definition
of Securities Trader in proposed Rule 1220(b)(3) in order to align the
text of the rule to that adopted by FINRA and other exchanges.\46\
---------------------------------------------------------------------------

    \46\ See e.g., MIAX International Stock Exchange, LLC Rule
203(d).
---------------------------------------------------------------------------

    The proposed rule also requires that associated persons primarily
responsible for the design, development or significant modification of
algorithmic trading strategies (or responsible for the day-to-day
supervision or direction of such activities) register as Securities
Traders. Individuals registering as Securities Traders must pass the
SIE and the Securities Trader examination.
    Finally, the proposed rule provides that, subject to the lapse of
registration provisions in proposed Rule 1210, Commentary .07, each
person registered with the Exchange as a Securities Trader on October
1, 2018 and each person who was registered with the Exchange as a
Securities Trader within two years prior to October 1, 2018 would be
qualified to register as a Securities Trader without having to take any
additional qualification examinations. Additionally, the proposed rule
would require that individuals registering as Securities Traders after
October 1, 2018 shall, prior to or concurrent with such registration,
pass the SIE and the Securities Trader qualification examination.
10. Proposed Rule 1220, Commentary .01--Foreign Registrations \47\
---------------------------------------------------------------------------

    \47\ The proposed rule is substantially similar to FINRA Rule
1220.01 and 1220.06.
---------------------------------------------------------------------------

    Proposed Rule 1220, Commentary .01, states that individuals who are
in good standing as representatives with the Financial Conduct
Authority in the United Kingdom or with a Canadian stock exchange or
securities regulator would be exempt from the requirement to pass the
SIE, and thus would be required only to pass a specialized knowledge
examination to register with the Exchange as a representative. The
proposed approach would provide individuals with a United Kingdom or
Canadian qualification more flexibility to obtain a representative-
level registration. Additionally, proposed Rule 1220, Commentary .01,
provides that, subject to the lapse of registration provisions in Rule
1210, Commentary .07, each person who is registered with the Exchange
as a United Kingdom Securities Representative or a Canada

Securities Representative on October 1, 2018 and each person who was
registered with the Exchange in such categories within two years prior
to October 1, 2018 would be eligible to maintain such registrations
with the Exchange. However, if persons registered in such categories
subsequently terminate such registration(s) with the Exchange and the
registration remains terminated for two or more years, they would not
be eligible to re-register in such categories.
11. Proposed Rule 1220, Commentary .02--Additional Qualification
Requirements for Persons Engaged in Security Futures \48\
---------------------------------------------------------------------------

    \48\ The proposed rule is substantially similar to FINRA Rule
1220.02.
---------------------------------------------------------------------------

    Proposed Rule 1220, Commentary .02, states that each person who is
registered with the Exchange as a General Securities Representative,
United Kingdom Securities Representative, Canada Securities
Representative, or General Securities Sales Supervisor shall be
eligible to engage in security futures activities as a representative
or principal, as applicable, provided that such individual completes a
Firm Element program as set forth in Rule 345A(b) that addresses
security futures products before such person engages in security
futures activities.\49\
---------------------------------------------------------------------------

    \49\ FINRA Rule 1220.02 also includes Options Representative and
Registered Options Principal registration categories. NYSE does not
trade options and member organizations therefore would not be
required to register with the Exchange in those categories and
therefore the Exchange is not adopting those categories within
proposed Rule 1220, Commentary .03 [sic].
---------------------------------------------------------------------------

12. Proposed Rule 1220, Commentary .03--Scope of General Securities
Sales Supervisor Registration Category \50\
---------------------------------------------------------------------------

    \50\ The proposed rule is substantially similar to FINRA Rule
1220.04.
---------------------------------------------------------------------------

    Proposed Rule 1220, Commentary .03, explains the purpose of the
General Securities Sales Supervisor registration category. The General
Securities Sales Supervisor category is an alternate category of
registration designed to lessen the qualification burdens on principals
of general securities firms who supervise sales. Without this category
of limited registration, such principals would be required to
separately qualify pursuant to the rules of FINRA, the MSRB, and the
options exchanges. While persons may continue to separately qualify
with all relevant self-regulatory organizations, the General Securities
Sales Supervisor examination permits qualification as a supervisor of
sales of all securities through one registration category. Persons
registered as General Securities Sales Supervisors may also qualify in
any other category of principal registration. Persons who are already
qualified in one or more categories of principal registration may
supervise sales activities of all securities by also qualifying as
General Securities Sales Supervisors.
    The proposed rule further provides that any person required to be
registered as a principal who supervises sales activities in corporate,
municipal and option securities, investment company products, variable
contracts, and security futures (subject to the requirements of Rule
1220, Commentary .02) may be registered solely as a General Securities
Sales Supervisor. In addition to branch office managers, other persons
such as regional and national sales managers may also be registered
solely as General Securities Sales Supervisors as long as they
supervise only sales activities.
F. Proposed New Rule 1230--Associated Persons Exempt From Registration
\51\
---------------------------------------------------------------------------

    \51\ The proposed rule is substantially similar to FINRA Rule
1230.
---------------------------------------------------------------------------

    Proposed Rule 1230 provides an exemption from registration with the
Exchange for certain associated persons. Specifically, the proposed
rule provides that persons associated with a member organization whose
functions are solely and exclusively clerical or ministerial would be
exempt from registration.\52\
---------------------------------------------------------------------------

    \52\ FINRA Rule 1230 provides an exemption from registration
with FINRA to persons associated with a FINRA member whose functions
are solely and exclusively clerical or ministerial and persons
associated with a FINRA member whose functions are related solely
and exclusively to (i) effecting transactions on the floor of a
national securities exchange and who are appropriately registered
with such exchange; (ii) effecting transactions in municipal
securities; (iii) effecting transactions in commodities; or (iv)
effecting transactions in security futures, provided that any such
person is registered with a registered futures association. Member
organizations do not solely and exclusively engage in any of the
foregoing transactions and therefore the Exchange is not adopting
that portion of FINRA Rule 1230.
---------------------------------------------------------------------------

1. Proposed Rule 1230, Commentary .01--Registration Requirements for
Associated Persons Who Accept Customer Orders \53\
---------------------------------------------------------------------------

    \53\ The proposed rule is substantially similar to FINRA Rule
1230.01.
---------------------------------------------------------------------------

    Proposed Rule 1230, Commentary .01, clarifies that the function of
accepting customer orders is not considered clerical or ministerial and
that associated persons who accept customer orders under any
circumstances are required to be appropriately registered. However, the
proposed rule provides that an associated person is not accepting a
customer order where occasionally, when an appropriately registered
person is unavailable, the associated person transcribes the order
details and the registered person contacts the customer to confirm the
order details before entering the order.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\54\ in general, and
furthers the objectives of Section 6(b)(5),\55\ in particular, because
it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, 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.
---------------------------------------------------------------------------

    \54\ 15 U.S.C. 78f(b).
    \55\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change will
streamline, and bring consistency and uniformity to, the registration
rules, which will, in turn, assist member organizations and their
associated persons in complying with these rules and improve regulatory
efficiency. The proposed rule change will also improve the efficiency
of the examination program, without compromising the qualification
standards. In addition, the proposed rule change will expand the scope
of permissive registrations, which, among other things, will allow
member organizations to develop a depth of associated persons with
registrations to respond to unanticipated personnel changes and will
encourage greater regulatory understanding. Further, the proposed rule
change will provide a more streamlined and effective waiver process for
individuals working for a financial services industry affiliate of a
member organization, and it will require such individuals to maintain
specified levels of competence and knowledge while working in areas
ancillary to the investment banking and securities business.
    Finally, the Exchange believes that, with the introduction of the
SIE and expansion of the pool of individuals who are eligible to take
the SIE, the proposed rule change has the potential of enhancing the
pool of prospective securities industry professionals by introducing
them to securities laws, rules and regulations and appropriate conduct
before they join the industry in a registered capacity.

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 that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed amendments are
intended to promote transparency in the Exchange's rules, and
consistency with the rules of other SROs with respect to the
examination, qualification, and continuing education requirements
applicable to member organizations and their registered personnel. The
Exchange believes that in that regard that any burden on competition
would be clearly outweighed by the important regulatory goal of
ensuring clear and consistent requirements applicable across SROs,
avoiding duplication, and mitigating any risk of SROs implementing
different standards in these important areas.
    Further, the Exchange does not believe that the proposed amendments
will affect competition among securities markets since all SROs are
expected to adopt similar rules with uniform standards for
qualification, registration and continuing education requirements.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \56\ and Rule 19b-
4(f)(6) thereunder.
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    \56\ 15 U.S.C. 78s(b)(3)(A).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days from the date of filing. However, Rule
19b-4(f)(6)(iii) \57\ permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange has asked the Commission to waive the
30-day operative delay so that the proposal may become operative on
October 1, 2018 to coincide with the effective date of FINRA's proposed
rule change on which the proposal is based.\58\ The waiver of the
operative delay would make the Exchange's qualification requirements
consistent with those of FINRA, as of October 1, 2018. Therefore, the
Commission believes that the waiver of the 30-day operative delay is
consistent with the protection of investors and the public interest and
hereby waives the 30-day operative delay and designates the proposal
operative on October 1, 2018.\59\
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    \57\ 17 CFR 240.19b-4(f)(6)(iii).
    \58\ See supra note 5.
    \59\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(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.

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 email to [email protected]. Please include
File Number SR-NYSE-2018-44 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-NYSE-2018-44. 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-NYSE-2018-44 and should be submitted on
or before October 30, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\60\
Eduardo A. Aleman,
Assistant Secretary.
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    \60\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2018-21781 Filed 10-5-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 238 (Wednesday, December 13, 2017)]
[Notices]
[Page 58676]
[FR Doc No: 2017-26773]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Noise Exposure Map Notice Louisville International Airport,
Louisville, KY

AGENCY: Federal Aviation Administration, United States Department of
Transportation.

ACTION:  Notice.

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SUMMARY:  The Federal Aviation Administration (FAA) announces its
determination that the Noise Exposure Maps submitted by the Louisville
Regional Airport Authority for the Louisville International Airport are
in compliance with applicable requirements.

DATES: The FAA's determination on the noise exposure maps was made as
of August 10, 2017.

FOR FURTHER INFORMATION CONTACT: Felicia Johnson, Federal Aviation
Administration, Southern Region/Atlanta Airports District Office, 1701
Columbia Ave., Room 220, College Park, GA 30337.<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: This notice announces that the FAA finds
that the Noise Exposure Maps submitted for Louisville International
Airport are in compliance with applicable requirements of 14 CFR part
150, as of August 10, 2017. Under 49 U.S.C. 47503, or the Aviation
Safety and Noise Abatement Act of 1979 (the Act), an airport operator
may submit to the FAA Noise Exposure Maps which meet applicable
regulations and which depict non-compatible land uses as of the date of
submission of such maps, a description of projected aircraft
operations, and the ways in which such operations will affect such
maps. The Act requires such maps to be developed in consultation with
interested and affected parties in the local community, government
agencies, and persons using the airport. An airport operator who has
submitted Noise Exposure Maps that are found by FAA to be in compliance
with the requirements of 14 CFR part 150, promulgated pursuant to the
Act, may submit a Noise Compatibility Program for FAA approval which
sets forth the measures the airport operator has taken or proposes to
take to reduce existing non-compatible uses and prevent the
introduction of additional non-compatible uses.
    The FAA has completed its review of the Noise Exposure Maps and
accompanying documentation submitted by the Louisville Regional Airport
Authority. The documentation that constitutes the ``Noise Exposure
Maps'' as defined in 14 CFR part 150.7 includes: Figure 1. Louisville
International Airport and Surrounding Communities; Figure 4. Existing
Condition (2016) Noise Exposure Map; Figure 5. Forecast Condition
(2021) Noise Exposure Map; Figure 6. Comparison of Existing (2016) and
Forecast (2021) Noise Exposure Maps; Figure 7. South Flow Arrival and
Departure Tracks; Figure 8. North Flow Arrival and Departure Tracks;
Figure 9. Military Arrival and Departure Tracks; Figure 10. Flight
Track Density Plot for Louisville International Airport Jet Departures;
Figure 11. Flight Track Density Plot for Louisville International
Airport Jet Arrivals; Table 1. 14 CFR part 150 Noise/Land Use
Compatibility Guidelines; Table 2. 14 CFR part 150 Noise Exposure Map
Checklist; Table 3. Runway Details; Table 4. 2016 Operations Summary;
Table 5. Modeled Average Daily Aircraft Operations for 2016; Table 6.
2021 Operations Summary; Table 7. Modeled Average Daily Aircraft
Operations for 2021; Table 8. Overall Runway Use Percentages for 2016;
Table 9. Modeled Average Daily Runway Use for 2016; Table 10. Modeled
Average Daily Civilian Turbojet Runway Use by Time of Day for 2016;
Table 11. Annual Average Contraflow Percentages; Table 12. Two-Year
Historical Average Daily Runway Use for Late Morning Time of Day; Table
13. Overall Runway Use Percentages for 2021; Table 14. Modeled Average
Daily Runway Use for 2021; Table 15. Modeled Average Daily Civilian
Turbojet Runway Use by Time of Day for 2021; Table 16. Military Fixed-
Wing Aircraft Flight Tracks and Use; Table 17. Comparison of Land Area
Enclosed by the 2016 and 2021 decibel (dB) Day-Night Sound Level (DNL)
Contours; Table 18. Number of Historic Resources and Non-Residential
Sensitive Receptors within the 2016 and 2021 DNL Contours 58; Table 19.
Listing of Historic Resources and Non-Residential Sensitive Receptors
within the 2016 and 2021 DNL Contours 59; Table 20. Estimated
Residential Population within 20J 6 and 2021 DNL Contours. The FAA has
determined that these Noise Exposure Maps and accompanying
documentation are in compliance with applicable requirements. This
determination is made as of August 10, 2017.
    FAA's determination on the airport operator's Noise Exposure Maps
is limited to a finding that the maps were developed in accordance with
the procedures contained in Appendix A of 14 CFR part 150. Such
determination does not constitute approval of the airport operator's
data, information or plans, or a commitment to approve a Noise
Compatibility Program or to fund the implementation of that Program. If
questions arise concerning the precise relationship of specific
properties to noise exposure contours depicted on a Noise Exposure Map
submitted under 49 U.S.C. 47503, it should be noted that the FAA is not
involved in any way in determining the relative locations of specific
properties with regard to the depicted noise exposure contours, or in
interpreting the Noise Exposure Maps to resolve questions concerning,
for example, which properties should be covered by the provisions of 49
U.S.C. 47506. These functions are inseparable from the ultimate land
use control and planning responsibilities of local government. These
local responsibilities are not changed in any way under 14 CFR part 150
or through FAA's review of the Noise Exposure Maps. Therefore, the
responsibility for the detailed overlaying of noise exposure contours
onto the map depicting properties on the surface rests exclusively with
the airport operator that submitted those maps, or with those public
agencies and planning agencies with which consultation is required
under 49 U.S.C. 47503. The FAA has relied on the certification by the
airport operator, under 14 CFR 150.21, that the statutorily required
consultation has been accomplished.
    Copies of the full Noise Exposure Map documentation and the FAA's
evaluation of the maps are available for examination by appointment at
the following locations: Federal Aviation Administration Memphis
Airports District Office, 2600 Thousand Oaks Blvd., Suite 2250,
Memphis, TN 38118; Regional Airport Authority of Louisville and
Jefferson County, P.O. Box 9129, Louisville, Kentucky 40209.
    Any questions or requests for such an appointment may be directed
to the individual named under the FOR FURTHER INFORMATION CONTACT
heading of this notice.

    Issued at Memphis Airports District Office on November 9, 2017.
Tommy L. Dupree,
Acting Manager.
[FR Doc. 2017-26773 Filed 12-12-17; 8:45 am]
 BILLING CODE 4910-13-P