[Federal Register Volume 59, Number 202 (Thursday, October 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26060]


[[Page Unknown]]

[Federal Register: October 20, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34843; File No. SR-Phlx-94-50]

 

Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing of a Proposed Rule Change Relating to Revisions to the 
General Securities Registered Representative (Series 7) Examination, 
and the Corresponding Specifications and Content Outline

October 14, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 3, 1994, the 
Philadelphia Stock Exchange, Inc. (``Phlx'' 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 the Phlx. 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 
or the Proposed Rule Change

    The Phlx proposes, in conjunction with the other self-regulatory 
organizations (``SROs''), to use a revised version of the General 
Securities Registered Representative (``Series 7'') Examination, the 
corresponding specifications and content outline.\2\ The Phlx would 
adopt the amended Series 7, as well as the corresponding specifications 
and content outline.
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    \2\For a detailed description of the revised Series 7 
examination, see Securities Exchange Act Release Nos. 34340 (July 8, 
1994), 59 FR 35959 [File No. SR-NYSE-94-27] (notice of filing of 
proposed rule change relating to the revision of the content outline 
for the Series 7 Examination); 34341 (July 8, 1994), 59 FR 35960 
[File No. SR-NYSE-94-26] (notice of proposed rule change relating to 
the revision of examination specifications for the Series 7 
Examination).
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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 Phlx 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. The Phlx 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

    The Phlx proposes to use the Series 7 as amended, as the 
appropriate 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 preform 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, specifications and content 
outline 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.\3\ The examination specifications for the Series 7 have not 
been revised since 1986.
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    \3\SROs on the committee include the New York Stock Exchange, 
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 
relevance and appropriateness and drafted statements of tasks expected 
to be performed by entry-level registered representatives, and 
conformed the existing content outline to the task statements. 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 on 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.
    The other SRO participants will also file the revised 
specifications for approval by the Commission. The Phlx intends to 
commence use of the revised examination, specifications and content 
outline jointly with the other SROs, upon approval of the proposed rule 
changes of all of the other SRO participants.
    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

    The Phlx 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, N.W., Washington, D.C. 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, N.W., 
Washington, D.C. 20549. Copies of such filing will also be available 
for inspection and copying at the principal office of the Phlx. All 
submissions should refer to File No. SR-Phlx-94-50 and should be 
submitted by November 10, 1994.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-26060 Filed 10-19-94; 8:45 am]
BILLING CODE 8010-01-M