[Federal Register Volume 64, Number 117 (Friday, June 18, 1999)]
[Notices]
[Pages 32912-32913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15486]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41514; File No. SR-NYSE-99-19]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the New York Stock Exchange, Inc. To Adopt a New 
Interpretation to Rule 35 (``Floor Employees To Be Registered'')

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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change consists of a new interpretation with 
respect to the administration of Exchange Rule 35 (``Floor Employees to 
be Registered''). The new interpretation prescribes the requirements 
for Front Line Specialist Clerks (``FLS Clerks''), which include a 
qualifying examination (``Series 21'') for all current and prospective 
FLS Clerk and a supervised training period requirement which will apply 
only to prospective FLS Clerks.

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
    The purpose of the proposed new interpretation to Rule 35 is to 
prescribe the qualification requirements (i.e., training and 
examination) for Front Line Specialist Clerks. In addition to dictating 
the terms under which employees of members or member organizations may 
be admitted to the Exchange Trading Floor, Rule 35 mandates compliance 
by both employer and employee with such requirements as the Exchange 
may determine. The proposed interpretation to Rule 35 will require FLS 
Clerks to pass a new examination, developed by the Exchange in 
cooperation with a committee of Floor representatives (members, 
Specialists, and FLS Clerks) called the Front Line Specialist Clerk

[[Page 32913]]

Qualification Examination (``Series 21''). The examination will ensure 
that FLS Clerks have the basic knowledge and skills 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\
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    \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).
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    The Series 21 examination is a 90-minute test consisting of 65 
questions. Implementation of the examination is scheduled to take place 
90 days after its approval by the SEC. The examination specifications, 
content and fee (i.e., $200 per exam administration) will be more 
specifically addressed in separate filings. Though the requirements to 
take and pass the proposed Series 21 examination will apply to all 
prospective and current FLS Clerks, qualification requirements will 
differ as follows:
Current FLS Clerks
    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
    Individuals not currently functioning as FLS Clerks will also be 
required to pass the Series 25 qualifying examination as a Series 21 
prerequisite. Upon passing the Series 25, the prospective FLS Clerk 
must complete a training program to become eligible for the Series 21 
examination. The training program shall consist of a minimum of six 
months ``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'' FLS 
Clerk, i.e., functioning without the specialized supervision required 
during the training period.
2. Statutory Basis
    The proposed rule change is consistent with the requirements of 
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. 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.
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    \3\ 15 U.S.C. 78f(c)(3)(B).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposal does not 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 (1) 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-99-19 and 
should be submitted by July 9, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-15486 Filed 6-17-99; 8:45 am]
BILLING CODE 8010-01-M