[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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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