Overview

Effective January 4, 2016, Nasdaq BX ("BX" or "the Exchange"), in consultation with FINRA and other exchanges, is replacing the Proprietary Trader registration category ("PT") and qualification examination (Series 56) with a new Securities Trader registration category ("TD") and qualification examination (Series 57). BX is also replacing the Proprietary Trader Principal registration category with the new Securities Trader Principal registration category ("TP").

Representative Registration

The SEC recently published BX’s rule filing to establish the TD registration category and Series 57 qualification examination for Securities Traders. BX is also retiring the PT registration category.

Amended BX Rule 1032(b) will require each person associated with a member who is included within the definition of a representative as defined in Rule 1011 to register with BX as a TD if, with respect to transactions in equity (including equity options), preferred or convertible debt securities or foreign currency options on the Exchange, such person is engaged in proprietary trading, the execution of transactions on an agency basis, or the direct supervision of such activities¹. In order to register as a TD, a person will need to pass the new Securities Trader qualification examination, the Series 57. A person registered as a Securities Trader would not be qualified to function in any other registration category, unless also qualified and registered in such other registration category.

Member Impact

An individual who is currently registered as a PT will automatically receive the new TD registration in the Central Registration Depositary system on January 4, 2016. The individual will not have to request the position or take any additional exams to receive the TD.

Action Needed: A person associated with a proprietary trading firm who currently meets BX qualification requirements as a General Securities Representative (Series 7), will need to manually check the PT position on Form U4 prior to December 28, 2015, in order to be grandfathered into the new TD registration category effective January 4, 2016. The individual will not have to take any additional exams to receive the TD.

Principals

BX is also establishing a Securities Trader Principal ("TP") registration category which replaces the Proprietary Trader Principal category. The registration acronym for this new principal category will remain the same, TP. Each principal who has supervision over the securities trading activity described in Rule 1032(b) will be required to qualify and register as a TP. To qualify for registration as a TP, a person would need to be registered as a TD and also pass the General Securities Principal qualification examination (Series 24). A person registered as a Securities Trader Principal may only have supervisory responsibility over the activities specified in Rule 1032(b), unless the person is separately qualified and registered in another appropriate principal registration category.

Member Impact

An individual who is currently registered as a TP will maintain the TP registration category which will be renamed the Securities Trader Principal. The individual will not have to take any additional exams.

Action Needed: A person associated with a proprietary trading firm who currently meets BX qualification requirements as a General Securities Principal will need to manually check the TP position on Form U4 prior to December 28, 2015, in order to be grandfathered into the TP registration category effective on January 4, 2016. The individual will not have to take any additional exams to receive the TP.

Continuing Education

On or after January 4, 2016, all individuals who hold the TD position will be subject to the personalized S101 Continuing Education ("CE") Program. As a result of the introduction of the new Securities Trader registration category, the S501 Proprietary CE Program will be retired.

¹ The registration requirement does not apply to any person associated with a member whose trading activities are conducted principally on behalf of a registered investment company that controls, is controlled by or is under common control with the member.