[Federal Register Volume 60, Number 102 (Friday, May 26, 1995)]
[Notices]
[Pages 28005-28006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12983]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35744; File No. SR-CBOE-95-25]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, Incorporated, Relating to the Examination Specifications for 
the General Securities Registered Representative (Series 7) Examination

May 19, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on May 12, 
1995, the Chicago Board Options Exchange, Incorporated (``CBOE'' 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 by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CBOE proposes to use a revised version of the General 
Securities Registered Representative (Series 7) Examination (``Series 
7'') and corresponding specifications.
    The text of the proposed rule change is available at the CBOE and 
the Commission.

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

1. 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 [[Page 28006]] 1993 by an industry committee of SROs 
and broker-dealers representatives\1\ 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. The examination specifications for the Series 7 examination 
have not been revised since 1986.

    \1\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. Under the 
proposed rule change, the total number of questions in the Series 7 
examination will remain at 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.
2. 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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change: (1) does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) does not become operative for 30 days from May 12, 1995, the 
date on which it was filed, and the Exchange provided the Commission 
with written notice of its intent to file the proposed rule change at 
least five days prior to the filing date, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act and Rule 129b-(e)(6) 
thereunder.\2\

    \2\The proposed rule change is identical to the rule change 
previously approved by the Commission for the New York Stock 
Exchange, Inc. and the National Association of Securities Dealers. 
See Securities Exchange Act Release No. 34853 (Oct. 18, 1994), 59 FR 
53694 (Oct. 25, 1994) (File Nos. SR-NYSE-94-26; SR-NYSE-94-27); 
Securities Exchange Act Release No. 35401 (Feb. 22, 1995), 60 FR 
10886 (Feb. 28, 1995) (File No. SR-NASD-95-04).
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    At any time written 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary of appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.

IV. Socitiation 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, 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 at the 
Commission's Public Reference Section, 450 Fifth Street, NW., 
Washington, D.C. 20549. Copies of such filing will also be available 
for inspection and copying at the principal office of the Exchange. All 
submiss9ions should refer to File No. SR-CBOE-95-25 and should be 
submitted by June 16, 1995.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Jonathan G. Kartz,
Secretary.
[FR Doc. 95-12983 Filed 5-28-95; 8:45 am]
BILLING CODE 8010-01-M