[Federal Register Volume 66, Number 87 (Friday, May 4, 2001)]
[Notices]
[Pages 22624-22626]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11208]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44228; File No. SR-NASD-2001-26]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. Relating to a Qualification Examination for a 
New Limited Registration Category: Limited Representative-Private 
Securities Offerings (Series 82)

April 27, 2001.
    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 April 3, 2001, the National Association of Securities Dealers, Inc. 
(``NASD'' or ``Association''), through its wholly-owned subsidiary, 
NASD Regulation, Inc. (``NASD Regulation''), filed with the Securities 
and Exchange Commission (``SEC'' or ``Commission'') the proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by NASD Regulation. NASD Regulation has designated the 
proposed rule change as constituting a ``non-controversial'' rule 
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which 
renders the proposal effective upon receipt of this filing by the 
Commission.\4\ 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.
    \3\ 17 CFR 240.19b-4(f)(6).
    \4\ See Letter to Alden S. Adkins, Senior Vice President and 
General Counsel, NASD Regulation, Inc. from Belinda Blaine, 
Associate Director, Division of Market Regulation, SEC, dated July 
24, 2000.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    NASD Regulation is filing with the Commission the examination 
specifications and study outline for the Limited Representative-Private 
Securities Offerings (Series 82) examination program. The Series 82

[[Page 22625]]

examination program is proposed in connection with a proposed change to 
NASD Rule 1032 \5\ to implement section 203 of the Gramm-Leach-Bliley 
Act of 1999 (``GLBA''),\6\ which requires the NASD, as a registered 
securities association, to create a new limited registration category 
for any associated person of a member whose investment banking and 
securities business is limited solely to affecting sales of private 
securities offerings. NASD Regulation is not proposing any textual 
changes to the By-Laws, Schedules to the By-Laws, or Rules of NASD 
Regulation or the NASD.
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    \5\ On November 28, 2000, the NASD, through its wholly-owned 
subsidiary, NASD Regulation, filed with the Commission SR-NASD-00-
69, proposing amendments to NASD Rule 1032 to create a new limited 
registration category for private securities offerings. NASD 
Regulation filed Amendment No. 1 to the proposed rule change on 
February 28, 2001. Amendment No. 1 replaced the filing in its 
entirety. See Release No. 34-44091 (March 21, 2001), 66 FR 16964 
(March 28, 2001).
    \6\ Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-102, 113 
Stat. 1338 (1999).
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    A description of the Series 82 examination is included in a study 
outline prepared by NASD Regulation. Confidential information on the 
examination is included in the examination specifications, which have 
been omitted from this filing and are being submitted under separate 
cover to the Secretary of the SEC pursuant to Rule 24b-2 under the Act.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NASD Regulation included 
statements concerning the purpose of an 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. NASD Regulation has prepared summaries, set 
forth in Sections (A), (B), and (C) bleow, 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 GLBA requires the creation of a new limited registration 
category for private securities offerings. More specifically, Title II 
of the GLBA, which becomes effective on May 12, 2001 (or such later 
date on which Title II of GLBA becomes effective), requires the NASD, 
as a registered securities association, to create a limited 
registration category for any associated person of a member whose 
investment banking and securities business is limited solely to 
effecting sales of private securities offerings. Therefore, pursuant to 
Section 15(A)(g)(3) of the Act, which requires the NASD to prescribe 
standards of training, experience, and competence for persons 
associated with NASD members, the NASD has developed the proposed 
Series 82 examination program to establish that persons associated with 
NASD members who are seeking to register under the new limited 
registration category for private securities offerings have attained 
specified levels of competence and knowledge.
    The proposed Series 82 Limited Representative-Private Securities 
Offerings examination will be an NASD examination that qualifies an 
associated person of a member, whose investment banking and securities 
business is limited solely to effecting sales of private securities 
offerings, to effect such sales. This examination tests a candidate's 
knowledge of securities industry rules and regulations pertinent to 
such products. The Series 82 will not qualify a registered 
representative in this category to effect sales of municipal or 
government securities, equity interests in or the debt of direct 
participation programs (DPP securities), or resales of or secondary 
market transactions in private placement securities. Persons seeking to 
effect the aforementioned sales must register in one or more of the 
other NASD limited representative categories or as a General Securities 
Registered Representative and pass the appropriate qualification 
examination(s).
    A committee of industry representatives, in conjunction with NASD 
Regulation staff, developed the series 82 study outline and 
specifications. The examination will be divided into four topical 
sections. The topical sections and the number of questions designated 
to each such section are: Characteristics of Corporate Securities (14); 
Regulation of the The Market for Registered and Unregistered Securities 
(45); Analyzing Corporate Securities (15); and Handling Customer 
Accounts and Industry Regulations (26). The specifications for the 
Series 82 examination, which have been omitted from this filing and are 
being submitted under separate cover to the Secretary of the SEC 
pursuant to Rule 24b-2 under the Act, describe additional confidential 
information regarding the examination.
    The examination will be a 150 minutes, 100 multiple choice question 
examination with 70% as the passing score.
(2) Statutory Basis
    NASD Regulation believes that the proposed Series 82 examination 
program is consistent with the provisions of sections 15A(b)(6) and 
15A(g)(3) of the Act, which authorize the NASD to prescribe standards 
of training, experience, and competence for persons associated with 
NASD members. The proposed Series 82 examination program also is 
necessary to implement section 203 of the GLBA.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    NASD Regulation does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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

    The proposed rule change has been filed by the Association as a 
``non-controversial'' rule change under Rule 19b-4(f)(6) under the 
Act.\7\ Consequently, because the foregoing proposed rule change: (1) 
Does not significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) does not become operative until May 12, 2001 (or such later 
date on which Title II of the GLBA becomes effective), more than 30 
days after the date on which it was filed, and NASD Regulation provided 
the Commission with written notice of its intent to file the proposed 
rule change at least five days prior to the filing date, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6) thereunder.
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    \7\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of this filing, the Commission may 
summarily abrogate this proposal if it appears to the Commission that 
such action is necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and

[[Page 22626]]

arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 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 of the NASD. All 
submissions should refer to the file number in the caption above and 
should be submitted by May 25, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-11208 Filed 5-3-01; 8:45 am]
BILLING CODE 8010-01-M