[Federal Register Volume 59, Number 134 (Thursday, July 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17097]


[[Page Unknown]]

[Federal Register: July 14, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34341; File No. SR-NYSE-94-26]

 

Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Notice of Filing of a Proposed Rule Change Relating to Examination 
Specifications for the General Securities Registered Representative 
(Series 7) Examination

July 8, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ Notice is hereby given that on June 30, 1994, the New 
York Stock Exchange, Inc. (``NYSE'' or ``Exchange'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared primarily by NYSE. 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) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NYSE has filed the Examination Specifications for the General 
Securities Registered Representative (Series 7) Examination (``Series 
7'') and seeks approval for the Series 7 examination.

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

    In its filing with the Commission, NYSE included statements 
concerning the purpose of and basis for the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. NYSE 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
    The purpose of the proposed rule change is to revise, update and 
seek approval for the Series 7 examination and specifications. The 
Series 7 examination was created in 1974 as an industry-wide 
qualification examination for persons seeking registration as general 
securities representatives. The Series 7 examination is generally 
required under rules of the self-regulatory organizations (``SROs'') 
for persons who are engaged in the solicitation, purchase and/or sale 
of securities for the accounts of customers. The purpose of the Series 
7 examination is to ensure that registered representatives have the 
basic knowledge necessary to perform their functions and 
responsibilities. The Series 7 examination specifications detail the 
areas covered by the examination and break down the number of 
examination questions culled from each area.
    Revision of the Series 7 examination and specifications was 
initiated in April 1993 by an industry committee of SROs and 
representatives from broker-dealers in order to update the examination 
in view of changes in the securities industry, including changes in 
relevant rules and regulations, the development of new securities 
products, and changes in the job of registered representatives as firms 
offer an increasingly wide range of financial services.\2\ The 
examination specifications for the Series 7 have not been revised since 
1986.
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    \2\SROs on the committee include NYSE, American Stock Exchange, 
Chicago Board Options Exchange, Municipal Securities Rulemaking 
Board, National Association of Securities Dealers and Philadelphia 
Stock Exchange. Broker-dealer representatives include branch office 
managers, compliance officers, training personnel and registered 
representatives.
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    The industry committee updated the existing statements of the 
critical functions of registered representatives to ensure current 
relevances and appropriateness and drafted statements of tasks expected 
to be performed by entry-level registered representatives. Under the 
proposed rule change, the total number of questions in the Series 7 
examination will remain 250, and the revised examination will cover all 
financial product areas covered by the present Series 7 examination as 
well as several new products, including collateralized mortgage 
obligations (``CMOs''), long term equity anticipation securities 
(``LEAPS'') and CAPS, with reduced emphasis on direct participation 
programs.
    Under the proposed rule change, NYSE will appoint a committee to 
review the Series 7 Content Outline and specifications periodically to 
determine any adjustments that may be required. The committee will 
represent a broad range of expertise, such as practicing registered 
representatives, branch managers, compliance officers, training 
personnel, and SRO representatives. The review will address any new 
information that registered representatives need to know, information 
currently specified in the examination that may require deletion and 
any adjustments that need to be made in the emphasis on various topics.
    The other SRO participants will also file the revised 
specifications for approval by the Commission. NYSE intends to commence 
use of the revised examination and specifications ninety days after 
approval by the Commission.
(b) Statutory Basis
    The statutory basis for the Series 7 examination lies in Section 
6(c)(3)(B) of the Act. Under that Section, it is the Exchange's 
responsibility to prescribe standards of training, experience and 
competence for persons associated with Exchange members and member 
organizations. Pursuant to this statutory obligation, the Exchange has 
developed examinations that are administered to establish that persons 
associated with Exchange members and member organizations have attained 
specified levels of competence and knowledge.

B. Self-Regulatory Organization's Statement on Burden on Competition

    NYSE believes that the proposal does not 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 thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period (i) as the 
Commission may designate up to ninety 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 in the 
Commission's Public Reference Section, 450 Fifth Street NW., 
Washington, DC 20549. Copies of such filing will also be available for 
inspection and copying at the principal office of the above-referenced 
self-regulatory organization. All submissions should refer to File No. 
SR-NYSE-94-26 and should be submitted by August 4, 1994.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.3
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    \3\17 CFR 200.30-3(a)(12) (1992).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-17097 Filed 7-13-94; 8:45 am]
BILLING CODE 8010-01-M