[Federal Register Volume 61, Number 77 (Friday, April 19, 1996)]
[Notices]
[Pages 17339-17341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9636]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37112; International Series Release No. 967; File No.
SR-NASD-96-13]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the National
Association of Securities Dealers, Inc. Relating to the Use of the New
York Stock Exchange's Modified General Securities Representative
Examination (Series 47) to Qualify as a General Securities
Representative
April 12, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on April 3, 1996, the
National Association of Securities Dealers, Inc. (``NASD'' or
``Association'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the NASD. The Commission is
publishing this notice to solicit
[[Page 17340]]
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
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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 Japanese securities
regulators to qualify as general securities representatives (Series 7)
by passing a modified general securities representative examination
(Series 47) which was developed by the New York Stock Exchange
(``NYSE''). The following is the full text of the proposed rule change
to Schedule C. New language is italicized.
Schedule C to the NASD By-Laws
* * * * *
Part III Registration of Representatives
* * * * *
(2) Categories of Representative Registration
(a) General Securities Representative
* * * * *
(ii)
* * * * *
(h) A person presently registered and in good standing as a
representative with any Japan stock exchange, or with any Japan
Securities Dealers Association, and who has passed the Japan 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.\2\
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\2\ The Commission notes, pursuant to a new rule numbering
system for the NASD Manual anticipated to be effective no later than
May 31, 1996, that this rule will become NASD Rule 1032(a)(2)(H).
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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 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
1. Purpose
It is the NASD's responsibility under Section 15A(g)(3) of the Act
\3\ to prescribe standards of training, experience, and competence for
persons associated with NASD members. Pursuant to this statutory
obligation, the NASD has developed examinations and administers
examinations developed by other self-regulatory organizations designed
to establish that persons associated with NASD members have attained
specified levels of competence and knowledge.
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\3\ 15 U.S.C. 78o-3(g)(3).
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This proposed amendment to Schedule C is intended to coordinate
with the recent SEC approval of a NYSE rule that allows a qualified
registered representative \4\ in good standing with the Japanese
securities regulators to become qualified as a general securities
representative (Series 7) by passing a modified general securities
representative examination (Series 47) developed by the NYSE.\5\ This
amendment is also necessary because of the requirement of Section
15(b)(8) of the Act that requires most NYSE members to also be members
of the NASD.\6\ Thus, there is a dual registration requirement with
both the NYSE and the NASD for individuals who perform certain
functions with NYSE members. At the present time, the NASD has no rule
that allows for NASD registration of a person who has passed the
modified qualification examination. The Series 47 examination is 160
questions and is 240 minutes long.
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\4\ The Commission notes that in order to become a registered
representative in Japan, all of the applicants, both foreign and
domestic, who do not meet certain experiential requirements must
pass the Securities Sales Representative Qualification Examination.
This test is composed of the Class 1 Examination, the Class 2
Examination, and the Investment, Trust, and Bond Examination. An
applicant's experience and area of interest determines which parts
of the Securities Sales Representative Qualification Examination are
applicable. See Securities Exchange Act Release No. 36514 (Nov. 27,
1995), 60 FR 62118.
\5\ See Securities Exchange Act Release No. 36708 (Jan. 11,
1996), 61 FR 1808 (approving File No. SR-NYSE-95-36).
\6\ 15 U.S.C. 78o(b)(8).
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2. Statutory Basis
The NASD believes the proposed rule change is consistent with the
provisions of Section 15A(b)(6) \7\ and Section 15A(g)(3) \8\ 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.
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\7\ 15 U.S.C. 78o-3(b)(6).
\8\ 15 U.S.C. 78o-3(g)(3).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The NASD believes the proposed rule change will impose no 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
The NASD has neither solicited nor received written comments.
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, 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. Sec. 552, will be available for inspection and copying at
the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Also, copies of such filing will be available
for inspection and copying at the principal office of the NASD. All
submissions should refer to File No. SR-NASD-96-13 and should be
submitted by May 10, 1996.
IV. Commission's Findings and Order Granting Accelerated Approval
of Proposed Rule Change
After careful review, the Commission finds, for the reasons set
forth below, that the NASD's proposed rule change is consistent with
the requirements of Section 15A of the Act \9\ and the rules and
regulations thereunder applicable to a national securities association.
Specifically, the Commission believes the proposal is consistent with
the
[[Page 17341]]
requirements of Section 15A(b)(6) and Section 15A(g)(3)(B).\10\
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\9\ 15 U.S.C. 78o-3.
\10\ 15 U.S.C. 78o-3(b)(6) and 78o-3(g)(3)(B).
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The Commission believes the proposal is consistent with Section
15A(b)(6)\11\ because it is designed to foster cooperation with persons
engaged in regulating transactions in securities and to help perfect
the mechanism of a free and open market. The Series 47 reduces
duplicative qualification requirement and, at the same time, allows the
NASD to ensure that the Japanese representatives desiring to become
registered with the NASD are fully qualified.
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\11\ 15 U.S.C. 78o-3(b)(6).
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The Commission believes the proposal is consistent with Section
15A(g)(3)(B) \12\ because it establishes standards of training,
experience, and competence for persons associated with NASD members.
The Series 47 should provide comprehensive coverage of the topics
contained in the Series 7 that are not covered, or are not covered in
sufficient detail, in the Securities Sales Representative Qualification
Examination. Accordingly, the Series 47, combined with the Securities
Sales Representative Qualification Examination, should measure the
qualifications of Japanese representatives adequately.
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\12\ 15 U.S.C. 78f(c)(3)(B).
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The Commission finds good cause for approving the proposed rule
change prior to the thirtieth day after the date of publication of the
notice in the Federal Register. This will enable qualified Japanese
registered representatives subject to the dual registration requirement
of Section 15(b)(8)\13\ desiring to become registered with the NASD to
immediately reap the benefits of reduced regulatory duplication. In
addition, the NASD's proposal does not raise any new regulatory
concerns because it is adopting the same Series 47 module previously
proposed by the NYSE and approved by the Commission.\14\ Therefore, the
Commission finds that there is good cause, consistent with Section 15A
of the Act,\15\ to accelerate the approval of the NASD's proposal.
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\13\ 14 U.S.C. 78o(b)(8).
\14\ See Securities Exchange Act Release No. 36708 (Jan. 11,
1996), 61 FR 1808 (approving File No. SR-SR-NYSE-95-36).
\15\ 15 U.S.C. 78o-3.
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\16\ that the proposed rule change (SR-NASD-96-13) is approved.
\16\ 15 U.S.C. 78s(b)(2).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
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\17\ 17 CFR. 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-9636 Filed 4-18-96; 8:45 am]
BILLING CODE 8010-01-M