[Federal Register Volume 66, Number 155 (Friday, August 10, 2001)]
[Notices]
[Pages 42244-42245]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20084]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44642; File No. MSRB-2001-04]


Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board (MSRB); Order Granting Approval of Proposed Rule Change Relating 
to In-firm Delivery of the Regulatory Element of the Continuing 
Education Requirement

August 1, 2001.
    On June 14, 2001, the Municipal Securities Rulemaking Board 
(``MSRB'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 10(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amended rules G-3, on professional 
qualifications, rule G-8, on books and records, G-9, on record 
retention, and G-27, on supervision. The proposed rule change will 
allow dealers to provide in-firm delivery of the Regulatory Element of 
the continuing education requirement.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The proposed rule change was published for comment in the Federal 
Register on June 28, 2001.\3\ The Commission received no comments on 
the proposal. This order approves the proposal.
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    \3\ See Release No. 34-44464 (June 22, 2001), 66 FR 34499.
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    In its current form, Rule G-3(h)(i)(A)(1) requires that each 
registered person who is not exempt from the rule, completer the 
Regulatory Element on the occurrence of his or her second registration 
anniversary and every three years thereafter. The Regulatory Element is 
a three and one half hour computer-based training program previously 
only administered at the location of an outside vendor. On each 
occasion, the training must be completed within 120 days after the 
registered person's anniversary date. A registered person who has not 
completed the Regulatory Element within the prescribed time periods is 
deemed to be inactive until the Regulatory Element has been fulfilled, 
and may not conduct, or be compensated for, activities requiring a 
securities registration.
    The MSRB proposed rule change integrates the in-firm delivery 
requirements as specified by the Securities Industry/Regulatory Council 
on Continuing Education (``Council''), an overseer of the continuing 
education program for the securities industry. The Council recommends 
and assists in developing specific content and questions for the 
Regulatory Element, and minimum core curricula for the Firm Element. 
The Council, working with representatives from the North American 
Securities Administrators Association, and with the knowledge of the 
Council's Securities and Exchange Commission liaisons, developed a 
model under which brokers, dealers and municipal securities dealers may 
deliver the Regulatory Element computer-based training on firm 
premises. The model requires that the broker, dealer or municipal 
securities dealer meet certain conditions for in-firm delivery relating 
to supervision, computer hardware and security of the training delivery 
environment.
    The Commission believes the proposed rule change is consistent with 
the protection of investors and the public interest on account that it 
facilitates the ability of registered persons to satisfy their 
obligations to meet the Regulatory Element of the continuing education 
requirement. Additionally, the Commission believes that the proposed 
rule change will not impose any burden on competition, since it equally 
applies to all brokers,

[[Page 42245]]

dealers and municipal securities dealers.
    The Commission must approve a proposed MSRB rule change if the 
Commission finds that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
govern the MSRB.\4\ The Commission finds that the proposed rule change 
meets this standard. In particular, the Commission finds that the 
proposed rule is consistent with the requirements of Section 
15B(b)(2)(C) of the Act, \5\ which requires, that the MSRB's rules be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, settling, process 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national system, and, in general, to protect 
investors and the public interest.
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    \4\ In approving this proposed rule change, the Commissioin 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78o-4(b)(2)(C).
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    It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act 
\6\, that the proposed rule change (File No. MSRB-2001-04) be, and it 
hereby is, approved.
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority \7\.
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-20084 Filed 8-8-01; 8:45 am]
BILLING CODE 8010-01-M