[Federal Register Volume 61, Number 32 (Thursday, February 15, 1996)]
[Notices]
[Pages 6051-6053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3419]



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[[Page 6052]]


SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36825; International Series Release No. 930; File No. 
SR-NASD-96-04]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by National 
Association of Securities Dealers, Inc. Relating to Use of New York 
Stock Exchange Modified General Securities Representative Examinations 
(Series 37 and 38) To Qualify as a General Securities Representative

February 9, 1996.
    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 January 
31, 1996, the National Association of Securities Dealers, Inc. 
(``NASD'' or ``Association'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') 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.

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

    The NASD has filed a proposed change to Schedule C of the By-Laws 
that would allow persons in good standing with the Canadian securities 
regulators to qualify as general securities representatives (Series 7) 
by successfully completing one of two modified general securities 
representative examinations (Series 37 and 38) which have been 
developed by the New York Stock Exchange. The following is the full 
text of the proposed rule change to Schedule C. New language is 
italicized.
Schedule C of the NASD By-Laws
    (2) Categories of Representative Registration
    (a) General Securities Representative
    (ii)
    (g) A person presently registered and in good standing as a 
representative with any Canadian stock exchange, or with a securities 
regulator of any Canadian Province or Territory, or with the Investment 
Dealers Association of Canada, and who has completed the training 
course of the Canadian Securities Institute, and who has passed the 
Canada Module of the General Securities Registered Representative 
Examination, shall be qualified to be registered as a General 
Securities Representative except that such person's activities may not 
involve the solicitation, purchase and/or sale of municipal securities 
as defined in Section 3(a)(29) of the Act.

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 V 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

    It is the NASD's responsibility under Section 15A(g)(3) of the Act 
to prescribe standards of training, experience and competence for 
persons associated with NASD members. Pursuant to this statutory 
obligation, the NASD develops examinations, as well as administers 
examinations developed by other self-regulatory organizations. These 
examinations are designed to establish that persons associated with 
NASD members have attained specified levels of competence and 
knowledge.
    Section 15(b)(8) of the Act requires most members of the New York 
Stock Exchange (``NYSE'') to also be members of the NASD, resulting in 
a dual registration requirement with both the NYSE and the NASD for 
those individuals who perform certain functions with a NYSE member. The 
proposed amendment to Schedule C is intended to coordinate with the 
recent SEC approval of a NYSE rule which permits a qualified registered 
representative in good standing with the Canadian securities regulators 
to then become qualified as a general securities representative (Series 
7) by passing one of the two modified versions (Series 37 or Series 38) 
of the general securities representative examination developed by the 
NYSE. At the present time the NASD has no rule which allows for NASD 
registration of a person who has passed the Series 37 or Series 38 
version of the modified general securities representative examination.
    The Series 37 version is for Canadian registrants who have 
successfully completed the basic core module of the Canadian Securities 
Institute program. The Series 38 version is for Canadian registrants 
who, in addition to having successfully completed the basic core module 
of the Canadian Securities Institute program, have also successfully 
completed the Canadian options and futures program. Both the Series 37 
and Series 38 share topics and test questions with the parent Series 7 
program but cover only subject matter that is not covered, or covered 
in sufficient detail, on the Canadian qualification examinations. The 
Series 37 has 90 questions and is 150 minutes in duration, while the 
Series 38, an abbreviated version of the Series 37, has only 45 
questions and is 75 minutes in duration. Forty-five questions 
pertaining to options from the Series 37 were omitted from the Series 
38.
    The NASD believes that the proposed rule change is consistent with 
the provisions of Sections 15A(b)(6) and 15A(g)(3) of the Act in that 
the NASD is required to prescribe standards of training, experience and 
competence for persons associated with NASD members. Pursuant to this 
statutory obligation, the NASD develops and administers examinations to 
establish that persons associated with NASD members have attained 
specified levels of competence and knowledge.

(B) Self-Regulation 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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The NASD requests that the Commission find good cause for 
accelerated effectiveness pursuant to Section 19(b)(2) of the Act. 
Approval of the proposed rule change prior to the thirtieth day after 
publication in the Federal Register, will permit both dually registered 
NYSE/NASD members and NASD-only members to benefit from the recently 
approved NYSE modified general securities representatives examination.

IV. Commission Findings

    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, in particular, the requirements of 
Section 15A(g)(3). 

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The Commission finds good cause for approving the proposed rule change 
prior to the 30th day after the date of publication of notice of the 
filing thereof in that accelerated approval will allow dual NYSE/NASD 
and NASD-only members who were registered in good-standing with the 
Canadian securities regulators to utilize the recently approved 
versions of the modified general securities representative examination. 
The NASD's proposal is comparable to the NYSE's proposal (SR-NYSE-95-
29) that was published in the Federal Register on October 23, 1995, and 
drew no comment. The Commission approved the NYSE's proposal on 
December 21, 1995. Accordingly, the Commission finds good cause for 
approving the NASD's analogous proposal prior to the thirtieth day 
after publication of notice of filing thereof.

V. 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 March 7, 1996.

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\1\ that the proposed rule change be, and hereby is, approved.

    \1\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\2\

    \2\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-3419 Filed 2-14-96; 8:45 am]
BILLING CODE 8010-01-M