[Federal Register Volume 64, Number 13 (Thursday, January 21, 1999)]
[Notices]
[Pages 3329-3330]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-1323]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40944; File No. SR-NYSE-98-35]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Order Approving Proposed Rule Change Relating to the Specifications and 
Content Outline for the Trading Assistant Qualification Examination 
(Series 25)

January 13, 1999.

I. Introduction

    On November 10, 1998, the New York Stock Exchange, Inc. (``NYSE'' 
or ``Exchange'') submitted to the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change consisting of the specifications 
of the new trading assistant exam and the Content Outline for the 
Trading Assistant Qualification Examination (``Series 25 Content 
Outline''). The proposed rule change was published for comment in the 
Federal Register on December 9, 1998.\3\ The Commission did not receive 
any comments on the proposal. This order approves the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 40721 (November 30, 
1998), 63 FR 67965 (December 9, 1998.
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II. Description of the Proposal

    In a companion release, the Exchange has proposed to amend Rule 35 
which dictates the terms under which an employee of a member or member 
organization may be admitted to the Exchange trading floor.\4\ The Rule 
35 Proposal requires floor employees i.e., post clerks and booth 
clerks, also known as trading assistants (``Trading Assistants'') to 
take and pass an appropriate qualification examination (``Series 25 
Examination'') and to meet appropriate training requirements. 
Currently, Rule 35 only requires trading assistants to submit a 
completed Form U-4 (``Uniform Application for Securities Industry 
Registration or Transfer'') and fingerprints. The current requirements 
will continue to be effective.
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    \4\ Securities Exchange Act Release No. 40720 (November 30, 
1998), 63 FR 67969 (December 9, 1998) (``Rule 35 Proposal'').
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    Under the Rule 35 Proposal, all current and prospective Trading 
Assistants will be required to pass the Series 25 Examination. 
Moreover, new Trading Assistants will be required to attend a 3-month 
training session (including on-the-job and classroom training) before 
taking the exam. New Trading Assistants will not be permitted to 
perform their functions without supervision until they pass the exam. 
Current Trading Assistants will have one year from implementation of 
the new requirements to pass the exam and will not be required to 
attend the 3-month training unless they twice fail the Series 25 
Examination.
    The Exchange, in conjunction with the amendments to Rule 35, filed 
this proposal to submit its Series 25 Content Outline. The Series 25 
and the Series 25 Content Outline were developed by the Exchange along 
with a committee of Exchange members and Trading Assistants. The 
Exchange believes the Series 25 will ensure that Trading Assistants 
will have the basic knowledge, skills, and abilities necessary to 
perform the functions and carry out the responsibilities of their 
position. The Series 25 Content Outline details the coverage of the 
examination. According to the Series 25 Content Outline, it is intended 
to familiarize examination candidates with the range of subjects 
covered, as well as the depth of knowledge required.

III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\5\ In 
particular, the Commission finds that the proposed rule change is 
consistent with the requirements of Section 6(c)(3)(B) of the Act.\6\
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    \5\ In reviewing this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(c)(3)(B).
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    Section 6(c)(3)(B) of the Act provides, among other things, that a 
national securities exchange may examine and verify the qualifications 
of applicants who desire to become associated with a member and may 
require any person associated with a member to be registered with the 
exchange in accordance with established procedures. This section also 
provides that an exchange may bar a person from becoming a member if 
such person does not meet standards of training, experience, and 
competence as are prescribed by the rules of the exchange.

[[Page 3330]]

    Having reviewed the Series 25 Examination itself in its 
entirety,\7\ the Commission finds that the Series 25 Examination 
satisfies the requirements of Section 6(c)(3)(B).\8\ The Commission 
believes that the nature and the scope of the examination is 
appropriate for ensuring that Trading Assistants admitted to the 
Exchange's trading floor are duly trained and qualified to competently 
perform their duties and functions.
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    \7\ The Series 25 Examination was subject to confidential 
treatment by the Commission.
    \8\ Securities Exchange Act Release No. 40943 (January 13, 
1999).
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    The Commission also finds that the Series 25 Content Outline 
satisfies the requirements of Section 6(c)(3)(B) of the Act.\9\ The 
Commission believes that the Series 25 Content Outline provides notice 
to all members and persons associated with members of the requirements 
to be satisfied by floor employees before they can be admitted to the 
Exchange trading floor. Moreover, the series 25 Content Outline also 
provides Trading Assistants with notice of the topics and materials 
tested as well as sample test questions to help them prepare.
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    \9\ 15 U.S.C. 78f(c)(3)(B).
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    The proposed rule change should help ensure that floor employees, 
working on the Exchange trading floor, are qualified and competent. It 
is therefore consistent with Section 6(c)(3)(B) because it establishes 
procedures of the Exchange that ensure that the standards regarding 
training, experience, and competence are satisfied.
    Moreover, the Commission finds that the proposal is consistent with 
the requirements of Section 6(b)(5) of the Act,\10\ which provides, 
among other things, that the rules of the Exchange be designed, in 
general, to protect investors and the public interest. The new exam 
should ensure that the Trading Assistants admitted to the Exchange 
trading floor are qualified to effectively perform in their positions. 
By ensuring the qualifications and abilities of trading assistants, the 
Commission believes that the integrity of the Exchange is maintained, 
which should protect investors and the public interest.
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    \10\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-NYSE-98-35) is approved.

    \11\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-1323 Filed 1-20-99; 8:45 am]
BILLING CODE 8010-01-M