[Federal Register Volume 64, Number 217 (Wednesday, November 10, 1999)]
[Notices]
[Pages 61375-61376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29436]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42092; File No. SR-NYSE-99-36]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Order Approving Proposed Rule Change to Eliminate the Series 7B 
Qualification Examination and Adopt a New Interpretation to Rule 345

November 2, 1999.

I. Introduction

    On August 31, 1999, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with 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 relating to the qualification 
requirements for Exchange Floor clerks who wish to conduct a limited 
public business with professional customers. The proposed rule change 
was published for comment in the Federal Register on September 29, 
1999.\3\ The Commission received no comments on the proposal. This 
order approves the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 41886 (September 20, 
1999), 64 FR 52565.
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II. Description of the Proposal

    The NYSE proposes to amend the interpretation of its Rule 345.5 
(``Employees-Registration, Approval, Records'') \4\ by eliminating the 
Series 7B Qualification Examination and establishing the Series 7A 
Examination as the appropriate qualification examination for Exchange 
Floor clerks who wish to conduct a limited public business with 
professional customers. The proposed amendment would establish the 
Trading Assistant Examination (``Series 25'') as a prerequisite for the 
Series 7A Examination.
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    \4\ The interpretation to Rule 345.15 is contained in the NYSE 
Interpretation Handbook.
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    Currently, Floor clerks who want to conduct a limited public 
business with professional customers (e.g., banks, insurance companies, 
and other persons included in the definition of ``professional 
customer'' found in the written interpretation to Exchange Rule 345.15) 
must first pass either the Series 7B Examination or the General 
Securities Representative (``Series 7'') Examination. Floor members who 
want to conduct a securities business with professional customers must 
first pass either the Series 7A Examination or the Series 7 
Examination.
    The Series 7B Examination includes, among other things, 25 
questions addressing Exchange Floor rules and policies. However, the 
Exchange recently implemented the NYSE Trading Assistant Examination 
(``Series 25'') \5\ which is designed to test the Floor clerks' basic 
understanding of Exchange trading rules and the underlying principles 
of the auction market. The proposed rule change eliminates the Series 
7B Examination requirement for Floor clerks, in order to prevent 
duplicate testing on certain material. The Series 7A Examination will 
now be the appropriate qualification examination for both Floor members 
and Floor clerks who wish to conduct a limited public business with 
professional customers.
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    \5\ See Securities Exchange Act Release No. 40943 (January 13, 
1999), 64 FR 3330 (January 21, 1999).
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III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act \6\ and the rules and regulations 
thereunder applicable to a national securities exchange \7\ and, in 
particular, with the requirements of Section 6(c)(3)(B) of the Act.\8\ 
Specifically, the Commission finds that the proposed rule change 
fulfills the Exchange's responsibility to prescribe standards of 
training, experience and competence for persons associated with 
Exchange members and member organizations. In addition, the proposed 
rule change is consistent with Section 6(c)(3)(B) of the Act,\9\ which 
authorizes an Exchange to bar a natural

[[Page 61376]]

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 prescribed by the rules of the Exchange.
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    \6\ In approving this rule, the Commission has considered the 
proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(c)(3)(B).
    \9\ Id.
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    Although the rule change proposes to eliminate the Series 7B 
Examination for Floor clerks who wish to engage in a limited public 
business, the subject matter included in the Series 7B is covered, in 
part, by the recently implemented Series 25 Examination--a required 
exam for all Floor clerks. Requiring Floor clerks who wish to engage in 
a limited public business to pass the Series 7A Examination and the 
Series 25 Examination (a prerequisite to the Series 7A) eliminates the 
testing of certain material twice, and, at the same time ensures that 
Floor clerks are qualified with respect to the particular subject 
matter currently included in the Series 7B Examination.
    Because the proposed rule change will allow the Exchange to test 
floor clerks on its rules and policies more effectively, the proposed 
rule change is consistent with Section 6(c)(3)(B) of the Act,\10\ which 
states that the Exchange is responsible for prescribing standards of 
training, experience and competence for persons associated with 
Exchange members and member organizations. The Commission believes that 
Series 25 and 7A Examinations would cover the appropriate subject 
matter and include a sufficiently broad range of topics so as to ensure 
an appropriate level of expertise by Floor clerks of members who want 
to conduct a limited public business with professional customers.\11\
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    \10\ Id.
    \11\ See Exchange Rule 345.15 and the interpretation to Rule 
345.15, which is contained in the NYSE Interpretation Handbook.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change (SR-NYSE-99-36) is approved.

    \12\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 99-29436 Filed 11-9-99; 8:45 am]
BILLING CODE 8010-01-M