[Federal Register Volume 64, Number 117 (Friday, June 18, 1999)]
[Notices]
[Pages 32911-32912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15485]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41515; File No. SR-NYSE-99-20]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the New York Stock Exchange, Inc. Relating to Examination 
Specifications and Content Outline for the Front Line Specialist Clerk 
Qualification Examination (Series 21)

June 10, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 14, 1999, the New York Stock Exchange, Inc. (``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
the proposed rule change as described in Items I, II, and III below, 
which Items have been prepared by the Exchange. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange has file the Content Outline and Examination 
Specifications for the Front Line Specialist Clerk Qualification 
Examination (``Series 21'').

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 Exchange 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 Exchange 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
    Exchange Rule 35 requires that employees of members and member 
organizations must be registered with, qualified by, and approved by 
the Exchange prior to admittance to the Trading Floor. Currently, the 
registration process for Floor employees functioning as Front Line 
Specialist Clerks (``FLS Clerks'') primarily consists of submission of 
a completed Form U-4 (``Uniform Application for Securities Industry 
Registration or Transfer'') and Fingerprints. Under a proposed 
interpretation to Rule 35, which has been filed separately with the 
Commission as a proposed rule change (SR-NYSE-99-19), these FLS Clerks 
will also have to be qualified by taking and passing an appropriate 
qualification examination and by meeting appropriate training 
requirements.
    The Front Line Specialist Clerk Qualification Examination (``Series 
21'') and Content Outline were developed by the Exchange, in 
conjunction with a Committee of Floor representatives (members, 
Specialists, and FLS Clerks) in order to qualify FLS Clerks pursuant to 
proposed amendments to Rule 35. The Series 21 examination will ensure 
that FLS Clerks have the basis knowledge, skills, and abilities 
necessary to perform their duties, which include assisting Floor 
Specialists. The Series 21 examination is the second step in a program 
to ensure that Floor employees are appropriately qualified. The first 
step was implementation of the Series 25 Trading Assistant 
Qualification Examination.\1\
---------------------------------------------------------------------------

    \1\ See Securities Exchange Act Release No. 40943 (January 13, 
1999), 64 FR 3330 (January 21, 1999) (SR-NYSE-98-36); Securities 
Exchange Act Release No. 40944 (January 13, 1999), 64 FR 3329 
(January 21, 1999) (SR-NYSE-98-35).
---------------------------------------------------------------------------

    The Content Outline, which may be examined at the places specified 
in Item IV below, details the coverage of the Series 21 examination. 
The Series 21 examination is a 90-minute test consisting of 65 
questions. A fee of $200 will be imposed per exam administration. This 
fee will be the subject of a separate rule filing at a later date. 
Implementation of the examination is scheduled to take place 90 days 
after its approval by the Commission.
    The requirement to take and pass the Series 21 examination in order 
to qualify as an FLS Clerk will apply to both current and prospective 
FLS Clerks. The separately-filed, proposed new interpretation to Rule 
35 (SR-NYSE-99-19) will establish that individuals who are currently 
functioning as FLS Clerks will be required to pass the Series 21 
examination within one year of its implementation. The Series 25 
qualification examination is a prerequisite, but no training program 
will be required for these individuals since they are already acting in 
the capacity of FLS Clerks. Prospective FLS Clerks will be required to 
complete, at

[[Page 32912]]

a minimum, a six month training program upon passing the Series 25 
examination in order to become eligible for the Series 21 examination. 
The training program will consist of ``on-the-job'' experience with a 
Specialist under a supervisory program to be determined by the 
Specialist. All candidates must pass the Series 21 examination before 
functioning as an ``unsupervised'' FLF Clerk, i.e., functioning without 
the specialized supervision required during the training period.
2. Statutory Basis
    The statutory basis for Series 21 Examination is Section 6(c)(3)(B) 
of the Act.\3\ 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. In addition, under Section 
6(c)(3)(B), the Exchange may bar a natural person from becoming a 
member or person associated with a member, if such natural person does 
not meet such standards of training, experience and competence as are 
prescribed by the rules of the Exchange. Pursuant to this statutory 
obligation, the Exchange has developed an examination that will be 
administered to establish that Front Line Specialist Clerks have 
attained specified levels of competence and knowledge.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(c)(3)(B).
---------------------------------------------------------------------------

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 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

    Comments were neither solicited nor received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal is 
consistent with the Act. Persons making written submissions should file 
six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street N.W., Washington, D.C. 20549-0609. 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 
Exchange. All submissions should refer to File No. SR-NYSE-99-20 and 
should be submitted by July 9, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\
---------------------------------------------------------------------------

    \4\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-15485 Filed 6-17-99; 8:45 am]
BILLING CODE 8010-01-M