[Federal Register Volume 68, Number 137 (Thursday, July 17, 2003)]
[Notices]
[Pages 42447-42448]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-18127]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48159; File No. SR-NYSE-2002-64]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment No. 1 Thereto by the New York Stock Exchange, Inc. 
To Amend the Interpretation of NYSE Rule 345A (``Continuing Education 
for Registered Persons'')

July 10, 2003.
    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 December 16, 2002, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. On June 
11, 2003, the NYSE filed Amendment No. 1 to the proposed rule change. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, 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 Interpretation of NYSE Rule 345A (``Continuing 
Education for Registered Persons'') would require registered persons to 
complete a Firm Element Continuing Education Program, prior to December 
31, 2006, or pass a qualification exam module prior to selling security 
futures contracts or

[[Page 42448]]

supervising such activity. The text of the proposed rule change is 
available at the Office of the Secretary, the NYSE and at the 
Commission.

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 NYSE 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Commodity Futures Modernization Act of 2000 permits the trading 
of security futures, subject to joint regulation by the Commission and 
the Commodity Futures Trading Commission. Since security futures 
contracts are new and unfamiliar to a majority of securities-registered 
persons, the Exchange, in coordination with other securities and 
futures self-regulatory organizations (``SROs''), is in the process of 
developing regulatory requirements for the registration and 
qualification of persons engaged in security futures contracts sales 
and supervision activities.
    In order to engage in securities sales activity, a person must be 
registered and qualified as a General Securities Registered 
Representative (Series 7 Examination). Supervision of such activity 
requires registration and qualification as a General Securities Sales 
Supervisor (Series 9/10 Examination) or by way of another examination 
acceptable to the Exchange (e.g., the Series 24 Examination).
    These qualification examinations do not, however, cover security 
futures contracts in sufficient depth or detail to provide an adequate 
level of competence for registrants who wish to effect transactions or 
supervise such transactions in the security futures market. A 
qualification examination specific to security futures is currently 
under development by the SROs. In the interim, staff of the SROs and 
the Commission have agreed upon an industry-wide requirement that 
completion of a prescribed continuing education program be prerequisite 
to the sale or supervision of security futures contracts.
    Consistent with this initiative, the Exchange proposes an 
Interpretation to NYSE Rule 345A that would require completion of a 
Firm Element continuing education program, prior to December 31, 2006, 
as a prerequisite to either selling security futures contracts or 
supervising such activity. The Interpretation would require the program 
to impart sufficient knowledge of, and proficiency in, security futures 
contracts to enable the responsible conduct of assigned functions.
    The program would be subject to the standard Firm Element 
requirements prescribed in NYSE Rule 345A, including a needs analysis, 
a content outline, and documentation of participants who attend and 
complete the program. Prescribed subject area coverage is provided in a 
Content Outline developed by the Exchange.
    Upon the implementation of a Security Futures Contracts 
qualification examination module, persons not already qualified as 
General Securities Registered Representatives must pass the 
qualification examination module in order to engage in or supervise 
Security Futures Contracts activity. Persons qualified as General 
Securities Registered Representatives prior to the time such 
qualification examination module is implemented may, prior to December 
31, 2006, complete an appropriate Firm Element continuing education 
program in lieu of passing the qualification examination.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of section 6(c)(3)(A) \3\ of the Act. 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, the Exchange believes that under section 6(c)(3)(B) of 
the Act,\4\ the Exchange may bar a natural person from becoming a 
member or person associated with a member or member organization if 
such natural person does not meet such standards of training, 
experience and competence as are prescribed by the rules of the 
Exchange.
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    \3\ 15 U.S.C. 78f(c)(3)(A)(i).
    \4\ 15 U.S.C. 78f(c)(3)(B)(i).
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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 Exchange consents, the Commission will:
    (A) By order approve such 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 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 at the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
NYSE. All submissions should refer to the File No. SR-NYSE-2002-64 and 
should be submitted by August 7, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-18127 Filed 7-16-03; 8:45 am]
BILLING CODE 8010-01-P