NYSE Arca, Inc. Equity Trading Permit Application and Contracts

Transcription

1 NYSE Arca, Inc. Equity Trading Permit Applicatin and Cntracts

2 TABLE OF CONTENTS Page Applicatin Prcess 2 Applicatin Checklist & Fees 3 Explanatin f Terms 4 Applicatin fr Equity Trading Permit (Sectins 1-6) 6-11 Clearing Letter f Cnsent fr Nn-Self Clearing Applicants (Sectin 7) 12 Individual Registratin & Key Persnnel (Sectin 8) Designated Examining Authrity (DEA) Applicant ETP (Sectin 9) 16 NYSE Arca ETP Applicatin - March

3 APPLICATION PROCESS Filing Requirements Prir t submitting the Applicatin fr Equity Trading Permit ( ETP ), an Applicant Brker-Dealer must file a Unifrm Applicatin fr Brker-Dealer Registratin (Frm-BD) with the Securities and Exchange Cmmissin and register with the FINRA Central Registratin Depsitry ( Web CRD ). Checklist Applicant Brker-Dealer must cmplete and submit all applicable materials addressed in the Applicatin Checklist (page 4) t crs@nyse.cm. Nte: All applicatin materials sent t NYSE Arca will be reviewed by NYSE Arca s Client Relatinship Services ( CRS ) Department fr cmpleteness. The applicatins are then submitted t FINRA wh perfrms the applicatin apprval recmmendatin. All applicatins are deemed cnfidential and are handled in a secure envirnment. CRS r FINRA may request applicants t submit dcumentatin in additin t what is listed in the Applicatin Checklist during the applicatin review prcess, pursuant t NYSE Arca Rule 2.4. If yu have questins n cmpleting the applicatin, yu may direct them t: Client Relatinship Services: crs@nyse.cm r (212) ptin 5. Applicatin Prcess Fllwing submissin f the Applicatin fr Equity Trading Permit and supprting dcuments t NYSE Arca, Inc. ( NYSE Arca ), the applicatin will be reviewed fr accuracy and regulatry r ther disclsures. NYSE Arca will submit the applicatin t FINRA fr review and apprval recmmendatin. If review f Statutry Disqualificatin Disclsure infrmatin and/r a backgrund investigatin indicates that the Applicant Brker- Dealer has an assciated persn(s) with a pssible statutry disqualificatin, NYSE Arca will cntact the representative f the Applicant Brker-Dealer t discuss the statutry disqualificatin prcess. If it appears that the Applicant Brker-Dealer has utstanding debt, civil judgment actins and/r regulatry disciplinary actins, the Applicant Brker-Dealer will be cntacted by NYSE Arca fr further infrmatin. Applicants wh have cmpleted and returned all dcuments withut indicatin f a statutry disqualificatin, utstanding debt, civil judgment actins and/r regulatry disciplinary actins will be presented t NYSE Arca fr apprval r disapprval withut delay. Applicant Brker-Dealer will be subject t disciplinary actin if false r misleading answers are given pursuant t the Applicatin fr Equity Trading Permit. NYSE Arca des nt accept fingerprint cards. Fingerprint cards must be submitted directly t FINRA within 30 days f filing the Frm U4. The fingerprint cards must be cleared by the FBI fr individuals wh seek t register with NYSE Arca r be apprved by NYSE Arca. Firms may request FINRA-apprved fingerprint cards thrugh the Gateway Call Center at: (301) Fingerprint cards shuld be sent directly t: Fr Regular U.S. Mail: FINRA, Registratin and Disclsure Department, P.O. Bx 9495, Gaithersburg, MD P.O. Bxes will nt accept curier r vernight deliveries. Fr Express/Overnight Mail Delivery: FINRA, Registratin and Disclsure Department, 9509 Key West Avenue, Rckville, MD If a phne number is required fr the recipient, prvide: (301) Yur firm shuld receive the FBI search results in the Fingerprint Status Received frm FBI Ntice Queue within three business days after the card is sent t the FBI. Additinal infrmatin regarding the submissin f fingerprints t Web CRD may be btained n the FINRA Web site: NYSE Arca will prmptly ntify the Applicant Brker-Dealer, in writing, f their Membership decisin. In the event an Applicant Brker-Dealer is disapprved by NYSE Arca, the Applicant Brker-Dealer has an pprtunity t be heard upn the specific grunds fr the disapprval, in accrdance with the prvisins f NYSE Arca Rule A disapprved applicant desiring t be heard must, within thirty (30) calendar days f the date upn which the Crpratin's decisin was mailed t the applicant, file a petitin in accrdance with the prvisins f Rule NYSE Arca ETP Applicatin - March

4 APPLICATION CHECKLIST & FEES 1 DOCUMENTATION CHECKLIST FOR NON-NYSE ARCA DEA BROKER-DEALER APPLICANTS Applicatin fr Equity Trading Permit Sectins 1-6, and 8-9 are MANDATORY fr all applicants Sectin 7 if applicant is nt self-clearing Signed Master User Agreement Frm BD, including Schedules & Disclsure Reprting pages must be up t date and accurate n FINRA s WebCRD A Frm U-4 and Fingerprint cards fr the fllwing individuals needs t be submitted directly t the FINRA, if nt currently available n Web CRD 2 Direct/Indirect Owners, Allied Persns, and Apprved Persns as listed n Frm BD Schedules A & B Designated supervisrs and principals Financial Dcumentatin Fur (4) Mst Recent FOCUS Reprts 3 and the Mst Recent Audited Financial Statements, if applicable Mst Recent Balance Sheet and Capital Cmputatin Six Mnth Prfit/Lss Prjectin All examinatin reprts and crrespnding respnses frm the Applicant Brker-Dealer fr the last tw exam reprts Organizatinal Dcuments: Articles f Incrpratin and Bylaws; Partnership Agreement; Limited Liability Cmpany ( LLC ) Agreements; Operating Agreement; r similar dcumentatin Cpy f Written Supervisry Prcedures 4, Anti-Mney Laundering Prcedures, and Insider Trading Act Prcedures (if separate) DOCUMENTATION CHECKLIST FOR NYSE ARCA DEA BROKER-DEALER APPLICANTS Applicatin fr Equity Trading Permit Sectins 1-6, and 8-10 are MANDATORY fr all applicants Sectin 7 if applicant is nt self-clearing Signed Master User Agreement Frm BD, including Schedules & Disclsure Reprting pages must be up t date and accurate n FINRA s WebCRD A Frm U-4 and Fingerprint cards fr the fllwing individuals needs t be submitted directly t the FINRA, if nt currently available n Web CRD 2 Direct/Indirect Owners, Allied Persns, and Apprved Persns as listed n Frm BD Schedules A & B Designated supervisrs and principals All Authrized Traders NYSE Arca AP Frm t be cmpleted by persns required t be Apprved Persns with the Exchange and fr whm the required disclsure infrmatin is nt available n Web CRD. Financial Dcumentatin Fur (4) Mst Recent FOCUS Reprts 3 and the Mst Recent Audited Financial Statements, if applicable Mst Recent Balance Sheet and Capital Cmputatin Six Mnth Prfit/Lss Prjectin Subrdinatin Agreements, if applicable Prprietary Accunts f Intrducing Brker-Dealers (PAIB) Agreements, if applicable All examinatin reprts and crrespnding respnses frm the Applicant Brker-Dealer fr the last tw exam reprts Organizatinal Dcuments: Articles f Incrpratin and Bylaws; Partnership Agreement; Limited Liability Cmpany ( LLC ) Agreements; Operating Agreement; r similar dcumentatin Cpy f Written Supervisry Prcedures 4, Anti-Mney Laundering Prcedures, and Insider Trading Act Prcedures (if separate) Nte: All ETP Hlders are respnsible fr maintaining a list f all Authrized Traders, and such list must be made available t NYSE Arca upn request as required by NYSE Arca Rule 7.30-E. 1 Fr a list f fees, please review the Schedule f Fees and Charges fr Exchange Services fund at Additinal fees t thse listed within this applicatin may apply. 2 A $125 Investigatin Fee may be required fr each Cntrl Persn, Allied Persn, Apprved Persn, Designated Supervisr r Authrized Trader (DEA Applicants Only) fr whm required infrmatin is nt available n Web CRD. 3 Applicants must demnstrate that they have current net capital f 140% f their minimum net capital requirement r $20,000 in excess f their minimum dllar net capital requirement, whichever is greater. If the Brker-Dealer has reprted net lsses fr the perid reviewed, the Firm s financial statements must demnstrate that its excess net capital can withstand six (6) cnsecutive mnths f average lsses. Applicant Brker-Dealers that d nt have the requested financial infrmatin available are required t submit Pr Frma Financial statements reflecting the Balance Sheet and Prfit & Lss Statement detail fr each mnth fr the mst recent six (6) mnths r since inceptin, whichever is less. 4 Market Maker applicants must include, but are nt limited t, the fllwing NYSE Arca Equity Rules: 6.3 (Preventin f the Misuse f Material, Nnpublic Infrmatin), 6.17 (Anti-Mney Laundering Cmpliance Prgram), 6.18 (Supervisin), and (Market Makers). NYSE Arca ETP Applicatin - March

5 EXPLANATION OF TERMS Fr purpses f this applicatin, the fllwing terms shall have the fllwing meanings: Applicant Brker-Dealer is the Brker-Dealer rganizatin applying fr an Equity Trading Permit r amending this frm. Assciated Persn - a persn wh is a partner, fficer, directr, member f a LLC, trustee f a Business Trust, r emplyee f an ETP Hlder r any persn directly r indirectly cntrlling, cntrlled by r under cmmn cntrl with an ETP Hlder. Authrized Trader a persn wh may submit rders t NYSE Arca, LLC s trading facilities n behalf f his r her ETP Hlder r Spnsred Participant. Clearing Services - a Brker-Dealer wh receives and executes custmers instructins, prepares trade cnfirmatins, sends the mney related t the trades, arranges fr the physical mvement f securities, and shares respnsibility with an intrducing brker-dealer fr cmpliance with regulatry requirements. Cntrl (as defined n Frm-BD) the pwer, directly r indirectly, t direct the management r plicies f a cmpany, whether thrugh wnership f securities, by cntract r therwise. Any persn that (1) is a directr, general partner r fficer exercising executive respnsibility (r having similar status r functins); (2) directly r indirectly has the right t vte 25% r mre f a class f a vting security r has the pwer t sell r direct the sale f 25% r mre f a class f vting securities; r (3) in the case f a partnership, has the right t receive upn disslutin, r has cntributed, 25% r mre f the capital, is presumed t cntrl that cmpany. Central Registratin Depsitry System ( Web CRD ) A centralized electrnic registratin system maintained by FINRA which prvides infrmatin n registered representatives and principals fr members f participant rganizatins. This database cntains emplyment histry, exam scres, licensing infrmatin, disciplinary actins, fingerprint results, and ther related registratin infrmatin. NYSE Arca, Inc. is a participant f this system. Designated Examining Authrity ( DEA ) the SEC will designate ne Self-Regulatry Organizatin ( SRO ) t be a Brker-Dealer s examining authrity, when the Brker-Dealer is a Member r ETP Hlder f mre than ne SRO. Every Brker-Dealer is assigned a DEA, wh will examine the Brker-Dealer fr cmpliance with financial respnsibility rules. Designated Supervisr refers t any persn that is a partner, directr, r fficer exercising executive respnsibility (r having similar status r functins) fr supervising Authrized Trader(s) ( AT ) (as defined in NYSE Arca Rule 1.1(e)). Direct Owners/Executive Officers Allied Persns and Apprved Persns, as thse terms are defined by NYSE Arca Rules 1.1(b) and 1.1(c), respectively, and generally refer t (1) a directr, general partner r fficer exercising executive respnsibility (r having similar status r functin); r (2) directly r indirectly has the right t vte 5% r mre f a class f vting security r has the pwer t sell r direct the sale f 5% r mre f a class f vting securities; (3) is entitled t receive 5% r mre f the net prfits; (4) in the case f a partnership, all general partners and thse limited and special partners that have the right t receive upn disslutin r have cntributed, 5% r mre f the capital; r (5) in the case f a LLC, thse members that have the right t receive upn disslutin, r have cntributed, 5% r mre f the LLC s capital, and if managed by elected managers, all elected managers. ETP r ETP Hlder an Equity Trading Permit issued by the Crpratin fr effecting apprved securities transactins n the Crpratin s trading facilities. An ETP may be issued t a Sle Prprietr, Partnership, Crpratin, LLC r ther rganizatin which is a registered Brker r Dealer, pursuant t Sectin 15 f the Securities Exchange Act f 1934, as amended, and which has been apprved by the Crpratin. Financial Arrangement (1) the direct financing f an ETP Hlder s dealings upn the Exchange; (2) any direct equity investment r prfit sharing arrangement; r (3) any cnsideratin ver the amunt f $5, including, but nt limited t, gifts, lans, annual salaries r bnuses. Market Maker -is bligated t maintain cntinuus tw-sided Q Orders in thse securities in which the Market Maker is registered t trade, pursuant t NYSE Arca Rule 7.23-E Market Maker Authrized Trader ( MMAT ) an authrized trader wh perfrms market-making activities pursuant t NYSE Arca Rule 7.21-E, n behalf f a Market Maker. NYSE Arca, Inc. ( NYSE Arca r the Crpratin ) a Delaware crpratin as described in the Crpratin s Certificate f Incrpratin and Bylaws. NYSE Arca is a natinal securities exchange as that term is defined by Sectin 6 f the Securities Exchange Act f 1934, as amended. NYSE Arca, Inc. is the Self-Regulatry Organizatin fr NYSE Arca, LLC NYSE Arca, LLC The equities marketplace and a trading facility f NYSE Arca, Inc. Primary Business refers t greater than 50% f the ETP Hlder s business. Self-Regulatry Organizatin ( SRO ) - each exchange r natinal securities assciatin is an SRO. Each SRO must have rules that prvide fr the expulsin, suspensin and ther discipline f member Brker-Dealers fr vilatin f the SRO s rules. NYSE Arca ETP Applicatin - March

6 NYSE Arca, Inc. Equity Trading Permit Applicatin and Clearing Letter f Cnsent NYSE Arca ETP Applicatin - March

7 SECTION 1 ORGANIZATIONAL PROFILE Date: SEC #: CRD #: LEI #: MPID: GENERAL INFORMATION Name f Applicant Brker-Dealer: Business Address: City: State: Zip Cde: Business Cntact Website: Title: TYPE OF ORGANIZATION Crpratin Limited Liability Cmpany Partnership Sle Prprietr TYPE OF BUSINESS TO BE CONDUCTED WITH EQUITY TRADING PERMIT (Check all that apply) Market Maker* Public Custmer Business Clearing Services Prprietary Trading Other * Please als cmplete Applicatin fr Market Maker Registratin OTHER BUSINESS ACTIVITIES CONDUCTED BY APPLICANT BROKER_DEALER (Check all that apply) Investment Banking Public Custmer Business Optins Market Making Prprietary Trading Other OTHER SELF-REGULATORY ORGANIZATION MEMBERSHIPS (Check all that apply) NYSE American Chicag Bard Optins Exchange (CBOE) Internatinal Securities Exchange (ISE) Financial Industry Regulatry Authrity, Inc. (FINRA) Philadelphia Stck Exchange (PHLX) Investrs Exchange LLC (IEX) APPLICANT S DESIGNATED EXAMINING AUTHORITY ( DEA ) New Yrk Stck Exchange (NYSE) Chicag Stck Exchange (CHX) Bstn Stck Exchange (BSE) Nasdaq Stck Market (NQX) BATS (BATS) NYSE Natinal NYSE Arca, Inc. Other NYSE Arca ETP Applicatin - March

8 SECTION 2 - MEMBERSHIP AGREEMENT Applicant Brker-Dealer agrees t abide by the Bylaws and Rules f NYSE Arca, Inc., as amended frm time t time, and all circulars, ntices, interpretatins, directives r decisins adpted by NYSE Arca, Inc. Applicant Brker-Dealer authrizes any SRO, cmmdities exchange, gvernmental agency r similar entity t furnish t NYSE Arca, upn its request, any infrmatin that such persn may have cncerning the ability, business activities, and reputatin f Applicant Brker-Dealer r its assciated persns, and releases such persn r entity frm any and all liability in furnishing such infrmatin. Applicant Brker-Dealer authrizes NYSE Arca t make available t any gvernmental agency, SRO, cmmdities exchange r similar entity, any infrmatin it may have cncerning the Applicant Brker-Dealer r its assciated persns, and releases NYSE Arca frm any and all liability in furnishing such infrmatin. Applicant Brker-Dealer acknwledges its bligatin t update any and all infrmatin cntained in any part f this applicatin, including terminatin f membership with anther SRO, which may cause a change in the Applicant Brker-Dealer s DEA. It is understd that in that event, additinal infrmatin may be required by NYSE Arca. Applicant Brker-Dealer Signature f Authrized Officer, Partner, Managing Member, r Sle Prprietr Date Print Name f Authrized Officer, Partner, Managing Member, r Sle Prprietr Title NYSE Arca ETP Applicatin - March

9 SECTION 3 FINANCIAL DISCLOSURE FINANCIAL STATEMENT Cpies f the required financial items as nted n the checklist including: the fur (4) mst recent FOCUS Reprts 5 and mst recent Audited Financial Statements, and all examinatin reprts and crrespnding respnses. SOURCE OF CAPITAL Explain the surce f Applicant Brker-Dealer s Capital PROPRIETARY ACCOUNTS OF INTRODUCING BROKER-DEALERS (PAIB) D yu hld a Prprietary Accunt as an Intrducing Brker-Dealer (PAIB) Yes N *If Yes: An intrducing Brker-Dealer must ntify its DEA in writing when it has entered int a PAIB Agreement with a clearing Brker- Dealer regarding the net capital treatment f assets held in prprietary accunts. Assets (cash and securities) held in trading accunts withut a PAIB Agreement are cnsidered t be nn-allwable in the cmputatin f net capital under SEC Rule 15c3-1. If NYSE Arca will be yur DEA, please enclse a cpy f all PAIB Agreements yu have entered int with a clearing brker-dealer. SUBORDINATED LOANS Have any subrdinated lans been made t Applicant Brker-Dealer? Yes (Explain belw) N FINANCIAL OR CONTROLLING INTERESTS Des the Applicant Brker-Dealer have a financial r cntrlling (as defined in Frm-BD) interest (thrugh direct r indirect stck r bnd wnership, thrugh utstanding lans, r therwise) in any rganizatin engaged in a securities, financial r related business? Yes (Explain belw) N FINANCIAL ARRANGEMENT Des the Applicant Brker-Dealer have a financial arrangement with any ther Brker-Dealer? Yes (Explain belw) N Type f Arrangement: Direct Equity Investment Any cnsideratin ver $5,000 Prfit Sharing Direct Financing Other Terms f Arrangement (include the names f all participants in the arrangement, and the nature and terms f the arrangement): OUTSTANDING DEBT (Check all that apply) Des the Applicant Brker-Dealer we mney t any f the fllwing? Any NYSE Arca member r member rganizatin r NYSE Arca ETP Hlder Any ther natinal securities r cmmdities exchange r natinal securities assciatin Any member f any ther natinal securities r cmmdities exchange r natinal securities assciatin Explain t whm the mney is wed and the dllar amunt. Attach a cpy f arrangements made fr repayment f this debt and evidence f an agreement f repayment.. N, the Applicant Brker-Dealer des nt we mney t any f the abve referenced persns r entities. 5 Applicant Brker-Dealers that d nt have the requested financial infrmatin available are required t submit Pr Frma Financial statements fr the mst recent six (6) mnths r since inceptin, whichever is less. NYSE Arca ETP Applicatin - March

10 SECTION 4 DIRECT OWNERS / INDIRECT OWNERS / EXECUTIVE OFFICERS Please list the fllwing individuals: (A) each Allied Persn as defined in NYSE Arca Rule 1.1(b) 6 ; (B) each Apprved Persn as defined in NYSE Arca Rule 1.1(c) 7 ; and (C) each Persn as defined in NYSE Arca Rule 11.18(b)(2) 8. Yu may submit multiple cpies f this frm, if needed, r attach a cpy f Schedule A and Schedule B f Frm BD. APPLYING AS: ALLIED PERSON APPROVED PERSON Title: CRD# Firm : Designated Supervisr f Authrized Traders Frm U4 and fingerprint infrmatin 8 is current and accessible fr this persn n Web CRD APPLYING AS: ALLIED PERSON APPROVED PERSON Title: CRD# Firm : Designated Supervisr f Authrized Traders Frm U4 and fingerprint infrmatin 8 is current and accessible fr this persn n Web CRD APPLYING AS: ALLIED PERSON APPROVED PERSON Title: CRD# Firm : Designated Supervisr f Authrized Traders Frm U4 and fingerprint infrmatin 8 is current and accessible fr this persn n Web CRD APPLYING AS: ALLIED PERSON APPROVED PERSON Title: CRD# Firm : Designated Supervisr f Authrized Traders Frm U4 and fingerprint infrmatin 8 is current and accessible fr this persn n Web CRD 6 Pursuant t NYSE Arca Rule 1.1(b), the term Allied Persn shall refer t an individual, wh is: (1) an emplyee f an ETP Hlder wh cntrls such firm, r (2) an emplyee f an ETP Hlder crpratin wh is a directr r a principal executive fficer f such crpratin, r (3) an emplyee f an ETP Hlder limited liability cmpany wh is a manager r a principal executive fficer f such limited liability cmpany, r (4) a general partner in an ETP Hlder partnership; and wh has been apprved by the Crpratin as an Allied Persn. 7 Pursuant t NYSE Arca s Rule 1.1(c), the term Apprved Persn shall refer t a persn wh is nt an ETP Hlder, nr an emplyee r an Allied Persn f an ETP Hlder, and wh: (1) is a directr f an ETP Hlder, r (2) cntrls an ETP Hlder, r (3) beneficially wns, directly r indirectly, 5% r mre f the utstanding equity securities f an ETP hlder, r (4) has cntributed 5% r mre f the partnership capital; and wh has been apprved by the Crpratin as an Apprved Persn. 8 NYSE Arca Rule 11.18(b)(2) refers t the designatin f a persn with authrity t reasnably discharge his/her duties and bligatins in cnnectin with supervisin and cntrl f the activities f the Assciated Persns f the ETP Hlder. Pursuant t NYSE Arca Rule 1.1(f), the term Assciated Persn shall refer t a persn wh is a partner, fficer, directr, member f a limited liability cmpany, trustee f a business trust, emplyee f an ETP Hlder r any persn directly r indirectly cntrlling, cntrlled by r under cmmn cntrl with an ETP Hlder. NYSE Arca ETP Applicatin - March

11 SECTION 5 STATUTORY DISQUALIFICATION DISCLOSURE Pursuant t the Securities Exchange Act f 1934, as amended ("the Act"), NYSE Arca, Inc. ( NYSE Arca ) may deny (r may cnditin) trading privileges r may bar a natural persn frm becming assciated (r may cnditin an assciatin) with an ETP Hlder fr the same reasns that the Securities and Exchange Cmmissin may deny r revke a brker-dealer registratin under the Act. The Act prvides fr Statutry Disqualificatin if a persn has: Been expelled, barred r suspended frm membership in r being assciated with an member f a self regulatry rganizatin; had brker, dealer r similar privileges denied r suspended r caused such denial r suspensin f anther; Vilated any prvisin f the Act; r Been cnvicted f a theft r securities related misdemeanr r any felny within ten (10) years f the date f applying fr membership status r becming an Assciated Persn. Check here if yu DO NOT have persn(s) assciated with the Applicant Brker-Dealer wh is r may be subject t Statutry Disqualificatin. Check here if yu DO have persn(s) assciated with the Applicant Brker-Dealer wh is r may be subject t Statutry Disqualificatin.* Please identify any such persn(s) assciated with the Applicant Brker-Dealer wh is r may be subject t Statutry Disqualificatin. Additinally, identify any such persn(s) wh are assciated with the Applicant Brker-Dealer and wh have been apprved fr assciatin r cntinued assciatin by anther SRO due t a Statutry Disqualificatin. * Attach a sheet identifying any such persn(s), including the fllwing infrmatin: 1. Name f the persn(s). 2. Cpies f dcuments relating t the Statutry Disqualificatin. 3. Descriptin f each such persn s duties (fr nn-registered individuals, this shuld include a statement indicating if the psitin allws access t bks, recrds, funds r securities). 4. Explanatin f actin taken r apprval given by any ther SRO regarding each persn. On behalf f (Applicant Brker-Dealer), I hereby attest and affirm that I have read and understand the abve and the attached infrmatin, and that the answers and the infrmatin prvided (including cpies f any dcuments) are true and cmplete t the best f my knwledge. I acknwledge that NYSE Arca shall rely n the infrmatin prvided pursuant t this Ntice in rder t preliminarily apprve r deny Applicant Brker-Dealer s applicatin fr trading privileges, but that NYSE Arca will als perfrm a cmplete backgrund check f Applicant Brker-Dealer, and such trading privileges may be immediately revked by NYSE Arca depending n the results f such backgrund check. I understand that Applicant Brker-Dealer will be subject t a disciplinary actin if false r misleading answers are given pursuant t this Ntice. I als acknwledge the bligatin f Applicant Brker-Dealer t submit t NYSE Arca any amendment t any dcument submitted as part f its applicatin, including but nt limited t this Ntice, within ten (10) business days f such amendment r change. Signature f Authrized Officer, Partner, Managing Member, r Sle Prprietr Date Print Name f Authrized Officer, Partner, Managing Member, r Sle Prprietr Title NYSE Arca ETP Applicatin - March

12 SECTION 6 SUPERVISION Each ETP Hlder must identify the persn(s) that is a member, partner, directr, r fficer exercising executive respnsibility (r having similar status r functins) fr supervising an Authrized Trader(s) as defined in NYSE Arca Rule 1.1(e). ETP Hlders must prvide a cpy f their Written Supervisry Prcedures ( WSP ) with their Applicatin. Name and Title f Persn respnsible fr maintaining WSPs: NYSE Arca Rules state: (a) Adherence t Law N Equity Trading Permit Hlder r Assciated Persn f an Equity Trading Permit Hlder may engage in cnduct in vilatin f the federal securities laws, the Cnstitutin r the Rules f the Exchange. Every Equity Trading Permit Hlder must supervise persns assciated with the Equity Trading Permit Hlder as t assure cmpliance therewith. (b) Supervisry System Each Equity Trading Permit Hlder fr whm NYSE Arca is DEA must establish and maintain a system t supervise the activities f its assciated persns and the peratins f its business. Such system must be reasnably designed t ensure cmpliance with applicable federal securities laws and regulatins and NYSE Arca Rules. Final respnsibility fr prper supervisin will rest with the Equity Trading Permit Hlder. The Equity Trading Permit Hlder s supervisry system must prvide, at a minimum, fr the fllwing: (1) The establishment and maintenance f written prcedures as required by paragraph (c) f this Rule. (2) The designatin f a persn with authrity t reasnably discharge his/her duties and bligatins in cnnectin with supervisin and cntrl f the activities f the assciated persns f the Equity Trading Permit Hlder. (3) The Equity Trading Permit Hlder must undertake reasnable effrts t determine that all supervisry persnnel are qualified by virtue f experience r training t carry ut their assigned respnsibilities. (4) Each Equity Trading Permit Hlder must designate and specifically identify t NYSE Arca ne r mre persns wh will be respnsible fr such supervisin. (c) Written Prcedures Each Equity Trading Permit Hlder must establish, maintain, and enfrce written prcedures t supervise the business in which it engages and t supervise the activities f its assciated persns that are reasnably designed t ensure cmpliance with applicable federal securities laws and regulatins, and with NYSE Arca Rules. Pursuant t this rule, WSPs shuld describe the fllwing: Specific identificatin f the individual(s) respnsible fr supervisin either by name r by title and psitin. The supervisry steps and reviews t be taken by the apprpriate supervisr this prcess shuld identify any exceptin reprts and/r ther dcuments being reviewed and the substantive area being reviewed (e.g., limit rder prtectin, trade reprting, etc.). If an ETP Hlder emplys autmated systems as part f its supervisry system, thse systems shuld als be generally described. The frequency f such reviews this shuld be mre specific than simply prviding fr a review r a review frm time t time. The frequency f reviews shuld be described (i.e., daily, weekly, mnthly, quarterly, r annually). Hw reviews will be dcumented, fr example, initialing rder tickets r filling ut review lgs. The prcedures shuld als prvide fr the dcumentatin f steps taken as a result f supervisry reviews. Fr Market Makers, the WSPs and supervisry systems f firms engaged in market making activities must address, at a minimum, trading practice rules (i.e., passive market making, firm qute rule cmpliance, limit rder prtectin), trading systems, trade reprting, rules cmpliance and any ther material aspect f the firm s market making business. WSPs shuld include the fllwing subject areas: Size cnventins Crdinatin f qutatins, trades and trade reprts Imprper cllabratin and crdinatin f Market Maker activities Failure t hnr qutatins Harassment Late and inaccurate trade reprting ALL EQUITY TRADING PERMIT HOLDERS MUST KEEP ABREAST OF CHANGES IN LAWS, RULES AND REGULATIONS, MARKET PRACTICES AND INDICATED PATTERNS OF NON-COMPLIANCE AND MUST MODIFY THEIR SUPERVISORY PROCEDURES AND SYSTEMS AS NECESSARY. NYSE Arca ETP Applicatin - March

13 SECTION 7 CLEARING LETTER OF CONSENT Ntice f Cnsent T be cmpleted by Clearing ETP Hlder f Applicatin Brker-Dealer The undersigned hereby represents the clearing agency named belw, a member f the Natinal Securities Clearing Crpratin ( NSCC ), and an apprved ETP Hlder f NYSE Arca, LLC, a facility f NYSE Arca. The undersigned Clearing ETP Hlder hereby agrees t accept full financial respnsibility fr all transactins effected thrugh and carried in all accunts held by the fllwing Applicant Brker-Dealer with the clearing agency: Applicant Brker-Dealer CRD# and/r SEC File# This sectin shall be deemed a letter f guarantee, letter f authrizatin, r ntice f cnsent pursuant t NYSE Arca Rules and may be relied upn by NYSE Arca, Inc., the NSCC, and their respective members. This Ntice f Cnsent shall be subject t NYSE Arca Rules, as amended frm time t time, and shall remain in effect until revked in writing by the Clearing ETP Hlder. Clearing ETP Hlder (Brker-Dealer Name) Clearing ETP Hlder (NSCC Clearing #) Signature f Authrized Officer, Partner r Managing Member f Clearing ETP Hlder Signature f Authrized Officer, Partner r Managing Member, r Sle Prprietr f ETP Hlder Print Name / Title Print Name / Title Date Date NYSE Arca ETP Applicatin - March

14 SECTION 8 INDIVIDUAL REGISTRATION Prvide the infrmatin requested belw fr each f the requested individuals assciated with the Applicant Brker-Dealer. Pursuant t NYSE Arca Rule 11.18, all applicants must designate a Series 24 licensed principal. Applicants subject t Exchange Act Rule 15c3-1 are required t have a designated Series 27 licensed principal, pursuant t NYSE Arca Rule 4.5-E. Additinally, Authrized Traders fr whm NYSE Arca will be the DEA are required t have successfully passed the Series 7 examinatin, pursuant t NYSE Arca Rule 2.5. Prf f examinatin requirements, fingerprint card submissin, and Frm U- 4s shuld be submitted by the Applicant t Web CRD fr review by NYSE Arca. DESIGNATED SERIES 24 LICENSED PRINCIPAL DESIGNATED SERIES 27 LICENSED PRINCIPAL AUTHORIZED TRADER AUTHORIZED TRADER AUTHORIZED TRADER AUTHORIZED TRADER Additinal Authrized Traders are submitted in a separate dcument attached heret NYSE Arca ETP Applicatin - March

15 SECTION 8 (CONTINUED) - KEY PERSONNEL Please identify the key persnnel wh hld the belw psitins (r the individual whse respnsibilities are the functinal equivalent f such psitin, regardless f actual titles used by the Applicant Firm) and wh will want t receive cmmunicatins pertaining t ur equities markets. Chief Executive Officer ( CEO ) Chief Financial Officer ( CFO ) Chief Cmpliance Officer ( CCO ) Chief Operatins Officer ( COO ) Head f Clearing Head f Cnnectivity Head f Trading NYSE Arca ETP Applicatin - March

16 NYSE Arca Inc. DEA Applicatin Requirements NYSE Arca ETP Applicatin - March

17 SECTION 9- DESIGNATED EXAMINING AUTHORITY (DEA) REQUIREMENTS ITSFEA COMPLIANCE ACKNOWLEDGEMENT This frm shuld be cmpleted by a Directr, Officer, General Partner r Individual respnsible fr ensuring that the Brker- Dealer s ITSFEA Cmpliance Prcedures are fllwed. In the future, this certificatin must be cmpleted and filed with NYSE Arca alng with the Brker-Dealer's year-end FOCUS Reprt (Frm X-17A-5). Brker-Dealer: SEC #. The undersigned states and certifies as fllws: It is understd that shuld any Directr, Officer, General Partner r Assciated Persn (as defined in NYSE Arca Rule 1.1(d)) f the Brker-Dealer acquire material, nn-public infrmatin cncerning a crpratin whse securities are publicly traded, it may be a vilatin f NYSE Arca Rules and Federal securities laws t misuse such infrmatin r trade any securities issued by the crpratin, r any ptins r ther derivative securities based theren, while such infrmatin remains nn-public. It is further understd that shuld any Directr, Officer, General Partner r Assciated Persn f the Brker-Dealer btain material, nn-public infrmatin cncerning the market in a security r grup f securities, it may be a vilatin f NYSE Arca Rules and Federal securities laws t make imprper use f such infrmatin in cnnectin with trading in the security, grup f securities r any ptin r ther derivative based theren. It is als understd that it may be a vilatin f NYSE Arca Rules and Federal securities laws t disclse t any ther persn r entity any nn-public, material crprate r market infrmatin that may be acquired regarding a publicly traded security r grup f securities. Additinally, the Brker-Dealer represents that it has established written prcedures reasnably designed t prevent misuse f material nn-public infrmatin by the Brker-Dealer r by any f the Brker-Dealer s Directrs, Officers, General Partners r Assciated Persns, taking int cnsideratin the nature f the Brker-Dealer s business. The Individual(s) respnsible fr verseeing and supervising the specific element f the member firm r rganizatin s ITSFEA Cmpliance prcedures has reviewed (r supervised the review f) the Brker-Dealer s prprietary, errr accunt(s), and any utside brkerage securities accunts f Directrs, Officers, General Partners, and Assciated Persns with the Brker-Dealer, in accrdance with the specific prvisins (including timing and type f review) detailed in and required by the firm s written ITSFEA cmpliance prcedures. Based upn the assessment f the adequacy f thse prcedures and f the authrity and diligence f the persn(s) carrying ut thse prcedures (except as t any securities transactins invlving the pssible misuse f nn-public infrmatin which already have been reprted t NYSE Arca), there is n reasnable cause t believe that any Directr, Officer, General Partner, r Assciated Persns f the Brker-Dealer has misused, made imprper use f, r disclsed material nn-public infrmatin, r may therwise be in vilatin f NYSE Arca Rule11.3 Accepted n behalf f ETP Hlder: Signature f Authrized Officer, Partner, Managing Member, r Sle Prprietr Date Print Name f Authrized Officer, Partner, Managing Member, r Sle Prprietr Title NYSE Arca ETP Applicatin - March