Options only traders at the relevant prop firms will definitely need to comply. There are actually many options-specific topics that will be tested. Broker-dealer firms are subject to tons of laws and regulations; retail traders are not representatives/associates of broker-dealers (just customers).
If you are with a CBSX BD now just wake up tomorrow morning and trade like it's any other day. Nobody knows anything yet so wasting your time speculating and playing the "what if" game is useless. Just go on as business as usual and wait for guidance from compliance. There is no study material yet, firms can't even register traders to take the exam. Do you really think they are going to make you pass it bu August 12th? There is no way. If you are not yet with a CBSX BD but want to be without shortly I would do it as soon as possible. There may be some benefits of being associated before a certain date. Just my 2 cents....now back to my charts.
It's official boys: no trading after August 12 if you do not pass the exam. Please Read the following important Compliance Requirement that has been issued by the CBOE/SEC regarding the series 56 and the series 24: Firm wide distribution for ____ Staff and Associated Class B members and Supervisors: As of June 20, 2011 the CBOE is requiring all traders to schedule and pass the Series 56 (Proprietary Trader Registration) by August 12, 2011. Attached is an outline provided by the CBOE as well as the Regulatory Circular(Please Read). Waivers for this test are one an individual basis and must be completed by each individual. The link for the waiver is in the regulatory circular. The waiver will be based upon an individualâs current securities registrations and experience. All branch managers must take the Series 56. Also, each manager will be required to take the Series 24 as well. The cost for each trader exam is $200.00. Each Traders is required to respond back to compliance by July 8 with the following information: 1. Trader name and user ID 2. Whether they will be taken the test or requesting to be U-5âd 3. The $200 exam fee will either be deducted from the Prop Reports or a personal check may be issued 4. All traders that have not been active 30 days or or insufficient capital remaining will be automatically U-5âd unless requesting to take exam. 5. All mangers must also request the Series 24. For all new associates coming abroad, the following steps need to be followed: 1. Fill out on-line wizard 2. Sign signature packet 3. Fingerprinted 4. Check for $325, for processing and registration. Once the compliance receives these 4 pieces, the Firm will wait till the prospect clears FINRA, than u-4 them and request the Series 56. The trader will then have 60 days to pass the test. Once they pass, than a capital contribution can be made and a user id will be created. After August 12, 2011, NOBODY WILL BE ALLOWED TO ENTER AN ORDER UNLESS THEY HAVE PASSED THE EXAM. If the CBOE should make any changes to the requirement date, you will be notified.
Do prop traders joining a Finra registered firm need to give S56 before going live. Also does a prop trader have a choice between S56 and S7
Don, you seem a little quiet here. I have heard that the series 7 will meet the waiver requirement. Can you confirm this for me?
The group I am with one of the managers just found out. If you have a series 7 in good standing and are up to date with continuing education you will be waived on the series 56 exam.
That's what I've been told, S7 is fine. The reason for "quiet" is simply as I said, "much ado about nothing" - a more level playing field for a few groups at the CBSX, and hopefully getting all the non-registered firms to join in properly, one way or another. I have told you in the past that I was told that the CBOE/CBSX was going along with the licensing program.... it apparently just took a bit longer... now, all the other other SRO's are going along with this as well. Not a fan of "over-regulation" but this does level the playing field, IMO. I'll know more by Thursday, after the Compliance meetings... and pass along what I find out..... however, you seem to be the "knower of all things" in Chicago anyway...so I'm sure your instincts are right. Don
Don. much to do about nothing maybe at chx. for bright traders. The cboe registered traders that is not the case. Other exchanges may have different rules that will apply to it's 7 licensed traders possibly . CHX is awaiting approval for accepting the # 56 license from the sec. As other exchanges have filed with the sec to do the same. Your firm may get some 7 licensed traders that are with cboe that don't want to wait for a potential waiver & rather continue trading without any potential disruption. For cboe traders . It's either a waiver or take the # 56 test to stay trading . A trader can apply for a waiver but no one knows how long it will take to get a reply if your waived? Their are traders that will probalby take the #56 just in case they don't get waived. It's going to be rough for many trader's unless they extend the test deadline .
the 64k dollar question is ? How long will it take to find out if a trader is approved on their waiver request? With less then 6 weeks on the clock it's going to be a mad rush to Not get suspended from trading if you can't meet the Aug 12 deadline as of Now.
They'll push the deadline back. Mostly firms are doing this for "compliance"purposes. LOL most of the prop firms won't close, they'll just move off shore. Notice a lot of them like WTS, CTG, Broad Street already have spin offs located off-shore. The sharp-toothed private wall st lawyers always find a way around the rules and this shouldn't be an exception. They'll find a loop-hole. As for registered traders, we're in trouble. The owners appear to need a series 7 and 24 now lol, even bigger trouble. we'll see what happens but as of right now it appears the august 12 date is in effect. I'm going to review the outline and make some notes and hopefully post it here within a week or two.