[Federal Register Volume 59, Number 134 (Thursday, July 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17097]
[[Page Unknown]]
[Federal Register: July 14, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34341; File No. SR-NYSE-94-26]
Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing of a Proposed Rule Change Relating to Examination
Specifications for the General Securities Registered Representative
(Series 7) Examination
July 8, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ Notice is hereby given that on June 30, 1994, 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 primarily by NYSE. 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) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NYSE has filed the Examination Specifications for the General
Securities Registered Representative (Series 7) Examination (``Series
7'') and seeks approval for the Series 7 examination.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NYSE included statements
concerning the purpose of and basis for the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. 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
Statutory Basis for, the Proposed Rule Change
(a) Purpose
The purpose of the proposed rule change is to revise, update and
seek approval for the Series 7 examination and specifications. The
Series 7 examination was created in 1974 as an industry-wide
qualification examination for persons seeking registration as general
securities representatives. The Series 7 examination is generally
required under rules of the self-regulatory organizations (``SROs'')
for persons who are engaged in the solicitation, purchase and/or sale
of securities for the accounts of customers. The purpose of the Series
7 examination is to ensure that registered representatives have the
basic knowledge necessary to perform their functions and
responsibilities. The Series 7 examination specifications detail the
areas covered by the examination and break down the number of
examination questions culled from each area.
Revision of the Series 7 examination and specifications was
initiated in April 1993 by an industry committee of SROs and
representatives from broker-dealers in order to update the examination
in view of changes in the securities industry, including changes in
relevant rules and regulations, the development of new securities
products, and changes in the job of registered representatives as firms
offer an increasingly wide range of financial services.\2\ The
examination specifications for the Series 7 have not been revised since
1986.
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\2\SROs on the committee include NYSE, American Stock Exchange,
Chicago Board Options Exchange, Municipal Securities Rulemaking
Board, National Association of Securities Dealers and Philadelphia
Stock Exchange. Broker-dealer representatives include branch office
managers, compliance officers, training personnel and registered
representatives.
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The industry committee updated the existing statements of the
critical functions of registered representatives to ensure current
relevances and appropriateness and drafted statements of tasks expected
to be performed by entry-level registered representatives. Under the
proposed rule change, the total number of questions in the Series 7
examination will remain 250, and the revised examination will cover all
financial product areas covered by the present Series 7 examination as
well as several new products, including collateralized mortgage
obligations (``CMOs''), long term equity anticipation securities
(``LEAPS'') and CAPS, with reduced emphasis on direct participation
programs.
Under the proposed rule change, NYSE will appoint a committee to
review the Series 7 Content Outline and specifications periodically to
determine any adjustments that may be required. The committee will
represent a broad range of expertise, such as practicing registered
representatives, branch managers, compliance officers, training
personnel, and SRO representatives. The review will address any new
information that registered representatives need to know, information
currently specified in the examination that may require deletion and
any adjustments that need to be made in the emphasis on various topics.
The other SRO participants will also file the revised
specifications for approval by the Commission. NYSE intends to commence
use of the revised examination and specifications ninety days after
approval by the Commission.
(b) Statutory Basis
The statutory basis for the Series 7 examination lies in Section
6(c)(3)(B) 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. Pursuant to this statutory obligation, the Exchange has
developed examinations that are administered to establish that persons
associated with Exchange members and member organizations have attained
specified levels of competence and knowledge.
B. Self-Regulatory Organization's Statement on Burden on Competition
NYSE 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 thirty-five 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 ninety 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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street NW., Washington, DC 20549. 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 Section, 450 Fifth Street NW.,
Washington, DC 20549. Copies of such filing will also be available for
inspection and copying at the principal office of the above-referenced
self-regulatory organization. All submissions should refer to File No.
SR-NYSE-94-26 and should be submitted by August 4, 1994.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.3
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\3\17 CFR 200.30-3(a)(12) (1992).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-17097 Filed 7-13-94; 8:45 am]
BILLING CODE 8010-01-M