[Federal Register Volume 60, Number 11 (Wednesday, January 18, 1995)]
[Notices]
[Pages 3688-3690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1109]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35208; File No. SR-NASD-94-66]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval 
of Proposed Rule Change Relating to Amendments to the Examination 
Specifications and Study Outline for the General Securities Sales 
Supervisor (Series 8) Examination

January 10, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'')\1\ notice is hereby given that on December 1, 1994 the 
National Association of Securities Dealers, Inc. (``NASD'' or 
``Association'') 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 NASD. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.

    \1\15 U.S.C. 78s(b)(1) (1988). [[Page 3689]] 
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I. Self-regulatory Organization Statement of the Terms of Substance of 
the Proposed Rule Change

    The NASD is proposing amendments to the examination specifications 
and study outline for the General Securities Sales Supervisor (``Series 
8'') qualification examination, an industry wide qualification 
examination for securities sales supervisors. The amendments revise 
materials pertaining to recently enacted federal and SRO rules and 
regulations, new products and changes in industry practices. The number 
of questions per examination and the examination time are unaffected by 
the amendments.
    The above amendments do not result in any textual changes to the 
NASD By-Laws, Schedules to the By-Laws, Rules, practices or procedures.

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 NASD 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 III below. The NASD 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 Series 8 examination is generally required under rules of the 
self-regulatory organizations (``SROs'') for persons who are engaged in 
the supervision of general securities branch offices (i.e., branch 
office managers) and of general securities registered representatives. 
The Series 8 examination tests a candidate's knowledge of securities 
industry rules and regulations and certain statutory provisions 
applicable to general securities sales supervision. The Series 8 
Content Outline details the subject coverage and question allocation of 
the examination. The Examination Specifications detail the areas 
covered by the examination and break down the number of examination 
questions pulled from each area.
    The NASD periodically reviews the content of the qualification 
examinations it administers to determine whether amendments are 
necessary or appropriate in view of changes pertaining to the subject 
matter covered by the examinations. Revision of the Series 8 
Examination, Examination Specifications, and Content Outline was 
recently undertaken by an industry committee composed of 
representatives from SROs (the New York Stock Exchange, the American 
Stock Exchange, the Chicago Board Options Exchange, the Municipal 
Securities Rulemaking Board, the National Association of Securities 
Dealers and the Philadelphia Stock Exchange) and representatives from 
broker-dealers, including branch office managers, compliance personnel 
and corporate executives, to update the examination in view of changes 
in relevant laws, rules and regulations, the development of new 
products, and to reflect various changes in industry practices. The 
committee reviewed the examination specifications, content areas and 
item bank and developed some new questions in new areas.
    The revised examination continues to cover the areas of knowledge 
required to supervise sales activities in securities, however, the 
focus of the content of the examination has been shifted to concentrate 
more closely on supervisory duties. Accordingly, certain questions have 
been deleted from the examination which deal with routine calculations 
and basic product knowledge and questions on new federal and SRO rules 
and regulations have been incorporated into the exam, as well as 
questions on new products, supervision and changes in industry 
practices. The revised Examination Specifications and Content Outline 
reflect the revised content of the examination. The examination will 
remain a six-hour, two-part, 200 question examination.
    The Commission recently approved two parallel filings of the New 
York Stock Exchange, Inc. (``NYSE'') and one filing of the Philadelphia 
Stock Exchange, Inc. (``Phlx'').\2\ No comments were received on either 
the NYSE and Phlx proposals. The Commission anticipates that the other 
appropriate SRO participants also will file the revised Specifications 
and Content Outline for approval by the Commission. The NASD, NYSE and 
other SROs may use the revised Examination, Specifications and Content 
Outline after the Commission has approved the proposed rule changes of 
the other appropriate SRO participants.

    \2\See Securities Exchange Act Release No. 34967 (Nov. 10, 
1994), 59 FR 59803 (Nov. 18, 1994) (File Nos. SR-NYSE-94-23 (revised 
Content Outline for Series 8 Examination), SR-NYSE-94-24 (exam 
specifications for Series 8 Examination)); and Release No. 35020 
(November 29, 1994), 59 FR 62769 (Dec. 6,1994) (File No. SR-Phlx-94-
51 (exam specifications for Series 8 Examination and corresponding 
Content Outline). Both the NYSE and Phlx approval orders are 
contingent upon the filing of the revised Examination Specifications 
and Content Outline by other appropriate SROs, and approval of those 
filings by the Commission.
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    The NASD believes that the proposed rule change is consistent with 
the provisions of Section 15A(g)(3) of the Act in that the proposed 
changes to the examination are to ensure persons seeking registration 
in the securities industry have attained the requisite levels of 
knowledge and competence.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The NASD does not believe that the proposed rule change will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. 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 Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
NASD. All submissions should refer to the file number in the caption 
above and should be submitted by February 8, 1995.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to the NASD and, in particular, with the 
requirements of [[Page 3690]] Section 15A(g)(3) of the Act.\3\ Section 
15A(g)(3) provides that a registered securities association may deny 
membership to, or condition the membership of, a registered broker or 
dealer if such broker or dealer does not meet the requisite levels of 
knowledge and competence.

    \3\15 U.S.C. 78o-3(g)(3) (1988).
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    The Commission believes that revising the Series 8 Examination, 
Specifications and Content Outline should help to ensure that only 
those securities sales supervisors with a comprehensive knowledge of 
current NASD rules, as well as an understanding of the Act, will be 
able to supervise general securities branch offices and registered 
representatives. The Commission believes that the revised areas covered 
by the Examination, Specifications and Content Outline are appropriate 
subject matters and include a sufficiently broad range of topics to 
ensure an appropriate level of expertise by supervisors. Additionally, 
the revised examination tests relevant subject matters in view of 
changes in applicable laws, rules, regulations, products, and industry 
practices. By ensuring this requisite level of knowledge, the NASD can 
remain confident that securities sales supervisors have demonstrated an 
acceptable level of securities knowledge to carry out their 
responsibilities.
    The approval is contingent upon the filing of the Examination 
Specifications and Content Outline by the other appropriate SROs and 
the approval of those filings by the Commission.
    The Commission finds good cause for approving the proposed rule 
change prior to the 30th day after the date of publication of notice of 
filing thereof in the Federal Register. The Commission believes that 
accelerated approval is appropriate given that the Commission recently 
approved two parallel and substantively identical filings by the NYSE, 
and the importance of implementing the revised Content Outline and 
Series 8 Examination as soon as practicable.
    It is therefore ordered, pursuant to Section 19(b)(2)\4\ that the 
proposed rule change is approved contingent upon the filing of the 
Examination Specifications and Content Outline by the other appropriate 
SROs and the approval of those filings by the Commission.

    \4\15 U.S.C. 78s(b)(2) (1988).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\

    \5\17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-1109 Filed 1-17-95; 8:45 am]
BILLING CODE 8010-01-M