[Federal Register Volume 59, Number 93 (Monday, May 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11797]
[[Page Unknown]]
[Federal Register: May 16, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34033; File No. SR-NYSE-94-13]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the New York Stock Exchange, Inc. Relating to Interpretation
to Rule 345 Establishing a New Category of Limited Registration for
Floor Clerks of Members and the Content Outline for the Examination
Module for Floor Clerks of Members Engaged in Public Business With
Professional Customers (Series 7B)
May 10, 1994.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'')\1\ and Rule 19b-4 thereunder\2\ notice is hereby given that
on March 28, 1994, the New York Stock Exchange, Inc. (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') the proposed rule change as described in
Items I, II and III below, which Items have been prepared by the self-
regulatory organization (``SRO''). The Commission is publishing this
notice to solicit comments on the propose rule change from interested
persons.
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\1\15 U.S.C. 78s(b)(1) (1988).
\2\17 CFR 240.19b-4 (1993).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange has filed a proposed interpretation to Rule 345
establishing a new category of limited registration for floor clerks of
members engaged in public business with professional customers and the
Content Outline for the Examination Module for Floor Clerks of Members
Engaged in Public Business with Professional Customers (Series B). The
Exchange also seeks approval of the Series 7B examination module.
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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
(a) Purpose
Recently, the Exchange established a new category of registration
and developed a qualification examination module (Qualification
Examination for Floor Members Engaged in Public Business with
Professional Customers--Series 7A) for floor members who conduct a
public business limited to accepting orders from professional customers
for execution on the trading floor.\3\ This Series 7A examination
module, developed as a subset of the General Securities Registered
Representative Examination (``Series 7''), was created because the
level of knowledge required to perform the activities engaged in by
members who conduct a professional public business limited to
transactions in listed securities on the Exchange floor is narrower in
content and scope than that needed to conduct an overall general
securities business with retail customers.
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\3\The Exchange stated that the term ``professional customer''
is derived from the term ``designated account'' as used in NYSE Rule
431. As used in this proposal, the Exchange defines ``professional
customer'' to include a bank, trust company, insurance company,
investment trust, state or political subdivision thereof, charitable
or nonprofit educational institution regulated under the laws of the
United States or any state, or political subdivision thereof, or any
person who has, or has under management, net tangible assets of at
least sixteen million dollars. For purposes of the definition of
``professional customer,'' the term ``person'' shall mean the same
as that term is defined in NYSE Rule 2, except that it shall not
include natural persons. NYSE Rule 2 defines ``person'' as a natural
person, corporation, partnership, association, joint stock company,
trust, fund or any organized group of persons whether incorporated
or not.
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Currently, floor clerks associated with members and who take orders
from public customers must become registered representatives and pass
the Series 7 examination. Floor members who conduct a public business
limited to dealing with professional customers (who may satisfy the
Series 7A exam requirements in lieu of the Series 7) have requested
that their floor clerks who take orders solely from professional
customers also be allowed to take a qualifying examination more
appropriate to the level of knowledge required to serve professional
customers.
The Exchange will continue to require the successful completion of
the Series 7 examination for any floor clerk seeking to become a
registered representative dealing with other than professional
customers. In addition, any person who has successfully completed the
Series 7 examination will not be required to complete the Series 7B
examination.
Since the Series 7A exam was developed for members, it assumes the
member's level of qualification (i.e., completion of new member
orientation program and/or having passed the floor member qualification
examination--Series 15). Consequently, the Series 7B examination module
has been developed to test the knowledge of floor clerks who accept
orders only from professional customers on behalf of members qualified
to conduct business with these professional customers by complementing
the Series 7A examination module with questions on basic information
required to perform floor functions.
A committee of floor member representatives in conjunction with the
Exchange staff developed the content outline, which details the
coverage of the examination module, as well as the actual examination.
The committee and staff identified the knowledge areas associated with
the job tasks, determined the relative emphasis to be given across the
knowledge areas, reviewed examination questions and forms, and
determined the passing score.
The proposed interpretation to rule 345.15 establishes a new
category of registration, limited registration for floor clerks, and
requires that those who conduct a public business limited to accepting
orders directly from professional customers for execution on the
trading floor, successfully complete the Series 7B examination.
(b) Statutory Basis
The statutory basis for the Series 7B Exam lies in section
6(c)(3)(B) of the Act. Under that section, the Exchange may bar a
natural person from becoming a member or person associated with a
member, if such natural person does not meet such standards of
training, experience and competence as are prescribed by the rules of
the Exchange. Pursuant to this statutory obligation, the Exchange has
developed examinations that are administered to establish that Exchange
floor members and persons associated with such members performing
specific functions have attained specific levels of competence and
knowledge.
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.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the publication of this notice in the Federal
Register or within such other period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street NW., Washington, DC 20549. Copies
of the submission, all subsequent amendments, all written statements
with respect to the proposed rule change that are filed with the
Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for inspection and copying at the
Commission's Public Reference Room, 450 Fifth Street NW., Washington,
DC 20549. Copies of the filing will also be available for inspection
and copying at the Commission's Public Reference Room, 450 Fifth Street
NW., Washington, DC 20549. Copies of the filing will also be available
for inspection and copying at the principal office of the NYSE. All
submissions should refer to File No. SR-NYSE-94-13 and should be
submitted by June 6, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-11797 Filed 5-13-94; 8:45 am]
BILLING CODE 8010-01-M