[Federal Register Volume 59, Number 243 (Tuesday, December 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31203]

[[Page Unknown]]

[Federal Register: December 20, 1994]


[Release No. 34-35102; File Nos. SR-AMEX-94-59; SR-CBOE-94-49; SR-CHX-
94-27; SR-MSRB-94-17; SR-NASD-94-72; SR-NYSE-94-43; SR-PHLX-94-52; SR-


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Changes by the American Stock Exchange, Inc., Chicago Board Options 
Exchange, Incorporated, Chicago Stock Exchange, Incorporated, Municipal 
Securities Rulemaking Board, National Association of Securities 
Dealers, Inc., New York Stock Exchange, Inc., Pacific Stock Exchange 
Incorporated, and Philadelphia Stock Exchange, Inc. Relating to a 
Continuing Education Requirement for Registered Persons

December 15, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on November 30 and December 
1, 5, 7, 12, 13, and 14, 1994, the Chicago Stock Exchange, Incorporated 
(``CHX''), the Chicago Board Options Exchange, Incorporated (``CBOE''), 
the New York Stock Exchange, Inc. (``NYSE''), the National Association 
of Securities Dealers, Inc. (``NASD''), the Municipal Securities 
Rulemaking Board (``MSRB'') and the Pacific Stock Exchange Incorporated 
(``PSE''), the American Stock Exchange, Inc. (``AMEX''), and the 
Philadelphia Stock Exchange, Inc. (``PHLX''), respectively, (each 
individually referred to herein as a ``Self-Regulatory Organization'' 
or ``SRO,'' and two or more collectively referred to as ``Self-
Regulatory Organizations'' or ``SROs'') filed with the Securities and 
Exchange Commission (``SEC'' or ``Commission'') the proposed rule 
changes as described in Items I, II, and III below, which Items have 
been prepared primarily by the SROs. The Commission is publishing this 
notice to solicit comments on the proposed rule changes from interested 

    \1\15 U.S.C. 78s(b)(1) (1988).

I. Self-Regulatory Organizations' Statement of the Terms of Substance 
of the Proposed Rule Changes

    The SROs propose to amend their rules to establish a formal, two-
part continuing education program for securities industry professionals 
that includes a Regulatory Element requiring uniform, periodic training 
in regulatory matters, and a Firm Element requiring members\2\ to 
maintain ongoing programs to keep their registered persons\3\ up-to-
date on job and product related subjects.

    \2\As used herein, the term ``members'' refers to: members and 
member organizations when used with reference to the AMEX, CBOE, 
CHX, NYSE, and PSE; members, member organizations, participants, or 
participant organizations when used with reference to the PHLX; 
brokers, dealers, or municipal securities dealers when used with 
reference to the MSRB; and members when used with reference to the 
    \3\For purposes of the proposed rules, the term ``registered 
person'' means any person required to be registered under the rules 
of the applicable SRO, including members and registered 
representatives, but does not include any member whose activities 
are limited solely to the transaction of business on the floor of a 
national securities exchange with other members or registered 
broker-dealers. When used with reference to the MSRB, however, the 
term ``registered person'' means any person registered with the 
appropriate enforcement authority as a municipal securities 
representative, municipal securities principal, municipal securities 
sales principal, or financial and operations principal pursuant to 
MSRB Rule G-3.

II. Self-Regulatory Organizations' Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

    In their filings with the Commission, the SROs included statements 
concerning the purpose of and basis for the proposed rule changes and 
discussed any comments they received on the proposed rule changes. The 
text of these statements may be examined at the places specified in 
Item IV below. The SROs have prepared summaries, set forth in Sections 
(A), (B), and (C) below, of the most significant aspects of such 

(A) Self-Regulatory Organizations' Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

1. Purpose
    The purpose of the proposed rule changes is to adopt uniform 
enabling rules for the implementation of a continuing education program 
for the securities industry.
2. Description of the Proposal
    a. Background. In May 1993, a self-regulatory organization task 
force (``Task Force'') was formed by the AMEX, CBOE, MSRB, NASD, NYSE, 
and PHLX, which included 12 representatives from a wide range of 
broker-dealers, to study the continuing education needs of the 
securities industry. In September 1993, the Task Force issued a report 
recommending a formal two-part continuing education program that would 
require uniform, industry-wide, periodic training in regulatory matters 
and ongoing training programs conducted by firms to keep their 
employees updated on job and product-related subjects. The Task Force 
also recommended that a permanent Council on Continuing Education, 
composed of broker-dealer and SRO representatives, be formed to develop 
the content and provide ongoing maintenance of the continuing education 
program. Pursuant to this recommendation, the Securities Industry/
Regulatory Council on Continuing Education (``Council'') was formed in 
September 1993, with representatives from six SROs and 13 broker-
dealers. The Council prepared draft rules to implement the continuing 
education program, which the SROs have filed as proposed rule changes 
with the Commission.\4\

    \4\See proposed AMEX Rule 341A; proposed CBOE Rule 9.3A; 
proposed CHX Article VI, Rule 9; proposed MSRB Rule G-3(h); proposed 
Schedule C to the NASD's By-Laws, Part XII; proposed NYSE Rule 345A; 
proposed PHLX Rule 640; and proposed PSE Rule 9.27(c).

    The proposed rule changes would codify the Task Force's 
recommendations, enable uniform implementation of the continuing 
education program, and provide a means for the SROs to monitor and 
enforce the program's requirements. The proposal provides for a two-
part continuing education program consisting of a Regulatory Element 
requiring uniform, periodic training in regulatory matters and a Form 
Element requiring firms to maintain ongoing programs to keep their 
employees up-to-date on job and product related subjects.
    b. The Regulatory Element. Satisfaction of the Regulatory Element 
would require all registered persons (unless exempt) to complete a 
prescribed training program after their second, fifth, and tenth 
registration anniversary dates.\5\ The Regulatory Element would be 
administered using computer-based interactive training techniques and 
would consist of standardized subject matters covering generally 
compliance, ethics, and sales practice issues. Failure to complete the 
program within prescribed time-frames (i.e., within 120 days after the 
occurrence of the applicable registration anniversary date, or as 
otherwise determined by the SROs) would result in a person's 
registration being deemed inactive and that person being prohibited 
from performing the functions of a registered person until such time as 
the person has completed the program. The SRO will terminate 
administratively the registration of anyone who is inactive for two 
years, provided that upon application and a showing of good cause, the 
SRO may allow a registered person additional time to satisfy the 
program requirements.\6\

    \5\Any registered person who has terminated his or her 
association with a member and who, within two years of the date of 
termination, becomes reassociated in a registered capacity with a 
member, would be required to participate in the Regulatory Element 
at such intervals (two, five, and 10 years) as would apply based 
upon the individual's initial registration anniversary date rather 
than the date of reassociation in a registered capacity.
    \6\Anyone administratively terminated must requalify on the 
Series 7 (the General Securities Registered Representative 
Examination) before such person's registration could be reactivated.

    Persons registered for more than 10 years as of the effective date 
of the rule would not have to satisfy the Regulatory Element 
requirements. Persons registered for 10 years or less as of the 
effective date of the rule would be required to satisfy the Regulatory 
Element and complete the computer-based training program after the 
occurrence of the next relevant registration anniversary date and on 
any applicable registration anniversary date(s) thereafter.
    A registered person who has completed all or part of the regulatory 
Element of the program or otherwise is exempt from participation 
therein would have to reenter the Regulatory Element in the event he or 
she is subject to certain disciplinary actions. Such individual would 
have to complete the computer-based training program within 120 days of 
such reentry and at two, five and 10 years thereafter. The following 
disciplinary events would trigger such reentry:
    A. Being subject to a statutory disqualification as defined in 
Section 3(a)(39) of the Act;\7\

    \7\15 U.S.C. 78c(a)(39) (1988 & Supp. 1993).

    B. Being ordered to reenter the Regulatory Element by the 
Commission, an SRO, or state securities regulatory agency as a sanction 
in a disciplinary action; or
    C. Being subject to suspension or imposition of a fine of $5,000 or 
more for the violation of any securities law or regulation, or 
agreement with, or rule or standard of conduct of, any SRO or 
securities regulatory agency, or as imposed by any such SRO or 
regulatory agency in connection with a disciplinary proceeding.
    c. The Firm Element. Satisfaction of the Firm Element of the 
program would require SRO members to develop and administer training 
programs to enhance the securities knowledge, skills, and 
professionalism of their registered sales, trading, and investment 
banking personnel who have direct contact with customers, and for the 
immediate supervisors of such persons. Members would be required to 
prepare training plans taking into consideration the organization's 
size, organizational structure, and scope of business activities, as 
well as regulatory developments and the performance of covered persons 
in the Regulatory Element. At a minimum, programs used to implement a 
member's training plan must be appropriate for the business of the 
members and must cover the following matters concerning securities 
products, services, and strategies offered by the member: General 
investment features and associated risk factors; suitability and sales 
practice considerations; and applicable regulatory requirements.
    Members would be required to review and, if necessary, update their 
training plans annually. The SROs may require their members, either 
individually or as part of a group, to provide specific training in any 
areas the SROs deem necessary. Persons subject to the training plan 
would have an affirmative obligation to participate in the programs 
identified by the member. Finally, members would be required to 
maintain records documenting the content of their training programs and 
the completion of the program by registered persons covered under the 
    d. Effective Date. The SROs intend that the requirements of the 
Regulatory Element portion of the continuing education program become 
effective on July 1, 1995, and that the Firm Element be implement in 
two steps whereby members would be required to have completed their 
Firm Element plans by July 1, 1995, and have implemented their plans no 
later than January 1, 1996.
3. Statutory Basis
    The SROs believe that their respective proposed rule changes are 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to national securities exchanges, 
national securities associations, and the MSRB and, in particular, the 
respective requirements of Sections 6(b)(5), 15A(b)(6), and 
15B(b)(2)(C) of the Act.\8\ Sections 6(b)(5), 15A(b)(6), and 
15B(b)(2)(C) require, among other things, that the rules of an 
exchange, and association, or the MSRB, respectively, be designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general, to protect investors and the public 
interest. The SROs further believe that their proposed rule changes 
also are consistent with the respective provisions of Sections 
6(c)(3)(B), 15A(g)(3)(A), and 15B(b)(2)(A) of the Act,\9\ each of which 
makes it the responsibility of an exchange, an association, or the MSRB 
to prescribe standards of training, experience and competence for 
persons associated with SRO members.

    \8\15 U.S.C. 78f(b)(5), 78o-3(b)(6), 78o-4(b)(2)(C) (1988).
    \9\15 U.S.C. 78f(c)(3)(B), 78o-3(g)(3)(A), 78o-4(b)(2)(A) 

(B) Self-Regulatory Organizations' Statement on Burden on Competition

    The SROs do not believe that the proposed rule changes would result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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

1. Comments Received by the NASD
    On August 15, 1994, the NASD published Special Notice to Members 
(``NTM'') 94-59 to request member comment regarding the Council's draft 
rules to create a mandated continuing education program for the 
securities industry. Thirty-three comment letters were received in 
response. Twenty-six letters were from financial services firms, four 
from trade associations, two from firms active in the continuing 
education field, and one was from the NASD's District 1. Five of the 
letters were opposed to the NASD's proposal, while the remaining 
letters either expressed support for, or were not opposed to, the 
proposal. As discussed below, the proposed rules that the SROs have 
filed with the Commission have been revised from the Council's original 
draft rules to address some of the commenters' concerns.
    Three letters from financial services firms question the usefulness 
of the Regulatory Element. The first, from a firm that limits its 
business primarily to wholesaling mutual funds, stated that the 
Regulatory Element creates more problems than it solves, costs too 
much, and would have the effect of fostering a negative attitude 
towards regulation. The second letter requests that the Regulatory 
Element be tailored to the specific products and services provided by 
each member. The third letter questions the use of the disciplinary 
fine threshold with respect to the re-entry provision, and believes the 
10 year grandfather provision should be shortened in some cases. The 
writer concludes that the securities industry should model its program 
after state insurance continuing education programs, where the 
licensing authority imposes the regulatory requirement directly on the 
individual, rather than on the firm.
    Three letters from financial services firms express concern that 
the Regulatory Element of the program would be administered at testing 
centers operated by the NASD. The request that firms be allowed to 
administer the Regulatory Element in-house, subject to appropriate 
    Three letters support the goals of the Regulatory Element, but 
raise concerns about its specific focus. One letter suggests that the 
Regulatory Element be divided into two separate units, one for 
commissioned brokers and one for registered persons operating in a no-
load environment. One letter suggests that this part be divided based 
on the registration category of the individual and the membership of 
the individual's firm. The third commenter believes that the Regulatory 
Element should relate to the daily activities of the largest number of 
registered persons possible.
    Three letters address concerns regarding the statistics that would 
be generated from the Regulatory Element. All three letters seek 
specific information on the types of statistics that would be 
available. Two of the letters express concern that the NASD has not 
enuniated clearly the intended and acceptable uses of these statistics.
    Two letters from financial services firms seek a clearer definition 
of ``inactive status'' as used in the Regulatory Element. The letters 
have questions regarding the disposition of monies earned, but not 
paid, prior to inactive status, and the allowable level of interaction 
between an individual on inactive status and his or her member firm. 
One writer asks whether inactive status should be treated as a 
disciplinary event, while the other writer believes that the rules 
should state clearly that inactive status is in no way a disciplinary 
    Four commenters address the re-entry provisions of the Regulatory 
Element. These concerns range from technical wording of the re-entry 
provision, to stating that the fine threshold is unfair with respect to 
technical violations and ambiguous in cases where several individuals 
are held jointly and severally liable, to stating that the provision 
regarding disciplinary actions is overly harsh. One commenter believes 
that the provision allowing the SEC, SROs, and state regulators to 
require a registered person to re-enter the Regulatory Element should 
be deleted, or at least changed to require a showing of cause.
    Another commenter believes that Central Registration Depository 
(``CRD'')10 support would help firms comply with the Regulatory 
Element. Specifically, CRD could be used by firms to identify 
registered persons and their length of service to determine how many of 
their registered persons would be subject to the Regulatory Element in 
each of the next few years.

    \1\0CRD is a computerized filing and data processing system 
operated by the NASD that maintains registration information 
regarding registered broker-dealers and their registered personnel 
for access by state regulators, SROs, and the Commission.

    One letter offers broad insights and recommendations for a 
continuing education program, but does not contain specific reactions 
to the proposal.
    Four letters were received from financial services firms that 
expressed concerns regarding the costs of complying with the Firm 
Element. Generally, these firms state that the Firm Element could have 
a disproportionately burdensome effect on smaller firms, as compared to 
larger ones. To mitigate these effects, the commenters suggest that the 
NASD prepare and administer training programs, or, alternatively, that 
subsidies be provided to smaller firms to help them comply with the 
Firm Element. Another commenter recommends a video via satellite 
program that would enable firms to secure qualified speakers, and be 
assured that the material provided would comply with the Firm Element.
    Two letters regarding the Firm Element have questions about those 
to whom it would apply. The first letter asks whether municipal 
securities brokers fall under the definition of ``covered persons'' for 
this part of the program. The second asks whether the Firm Element 
applies to sales assistants who are registered persons, or whether an 
accommodation for such persons could be made.
    Five letters comment on the standards for the Firm Element. The 
first commenter asks how and what information should be maintained 
regarding the program and offers suggestions. The second commenter 
believes that the Firm Element should focus on suitability, and favors 
some form of pre-approval regarding the contents of a firm's program. 
The third commenter asks whether a firm may include relevant compliance 
matters in the Firm Element so that it may meet its ``annual compliance 
interview/meeting'' requirement under the NASD Rules of Fair Practice. 
The fourth commenter believes that the Firm Element content 
requirements are too vague to ensure proper compliance. The fifth 
commenter questions the usefulness of feedback from the Regulatory 
Element in developing an appropriate Firm Element.
    Two financial services firms comment on the provision allowing the 
NASD to require members to undertake specific training. The first 
letter seeks a definition of the phrase ``class of covered registered 
person,'' stating that such a class should be clearly identifiable by 
firms. The second letter states that to grant the NASD discretion to 
mandate specific training for certain individuals or groups could have 
potentially arbitrary results that could place certain firms at a 
competitive disadvantage.
    Four industry associations submitted letters in response to the 
proposal. Two associations, the Securities Industry Association 
(``SIA'') and the Security Traders Association (``STA''), are comprised 
almost entirely of people potentially affected by the proposal. The 
other two, The Association for Investment Management and Research 
``AIMR'') and the Certified Financial Planner Board of Standards 
(``CFP''), are active in the continuing education field and have many 
members who are potentially affected people.
    The STA strongly supports the proposal, and expresses its desire to 
help implement the program. The SIA also supports the program, but 
believes that several of its aspects merit further consideration. The 
SIA believes that the NASD and the Council should develop standards to 
determine when registered persons may be required by regulators to re-
enter the Regulatory Element, and the power of the NASD arbitrarily to 
prescribe specific training for a member firm. The SIA also supports 
in-house administration of the Regulatory Element, with appropriate 
controls. Lastly, the SIA seeks clearer guidelines to determine the 
adequacy of a given Firm Element training program.
    Although the AIMR and the CFP each endorse the proposal, both are 
concerned about overlap for individuals who hold their designations and 
are also subject to this proposal. Both groups desire to work with the 
Council to minimize the impact caused by the overlap between the 
proposed rules and the existing requirements of the AIMR and CFP on 
individuals who would be subject to both regimes.
    Two parties that are active in the continuing education field 
responded to the proposal, the Securities Education Institute, Inc. 
(``SEI''), and the American Institute for Continuing Education 
(``AICE''). Both focus on the differences between the proposed program 
and programs that already exist in the insurance industry. Both seek 
more information regarding the Firm Element so as to help NASD members 
and independent training providers meet the program requirements. The 
SEI believes that administration of the Regulatory Element should not 
be limited to the NASD testing centers or to those firms with the 
proper in-house delivery means. Instead, interactive programs similar 
to those the SEI provides to the futures industry should be used (these 
would include safeguards already authorized by the Commodity Futures 
Trading Commission).
    NASD District 1 supports the proposal and offers two suggestions. 
First, with respect to the Regulatory Element, the commenter suggests 
that the sections relating to ``Requirements'' and ``Re-entry into 
Program'' be amended to make it clear that the time frame of the 
Regulatory Element is 10 years, not 15. Regarding the Firm Element, the 
commenter asks who the ``Specific Training'' provision would operate 
(i.e., at what level of the NASD would such decisions be made).
    The comments submitted on NTM 94-59 were reviewed by the Council 
and by the NASD Membership Committee. Neither the Council nor the 
Membership Committee agreed with those commenters who opposed 
instituting a continuing education program for the securities industry, 
believing that it is in the best interest of the investing public and 
the industry to proceed with the program.
    The Membership Committee made three technical changes to the rule 
as originally proposed in NTM 94-59. First, the language in Section 
(1)(a)(i) of the NASD's proposal was redrafted to state clearly that 
registered persons must participate in the Regulatory Element of the 
continuing education program on three occasions, after the occurrence 
of their second, fifth, and tenth registration anniversary dates. 
Second, Section (1)(b) of the NASD's proposal has been expanded to 
state that a registration that is inactive for a period of two calendar 
years would be terminated administratively, and that a person whose 
reregistration is so terminated must requalify by taking the Series 7 
examination before such person's registration could be reactivated. 
Finally, Section (1)(c)(iii) of the NASD's proposal was amended to 
clarify that the Commission, a state securities regulator, or an SRO 
could require re-entry into the program only as a result of a sanction 
in a formal disciplinary action. This change is meant to address the 
concerns of those commenting on the due process issues that could arise 
were regulatory authorities able to mandate re-entry arbitrarily.
    The NASD Membership Committee did not respond to other 
recommendations made by commenters. The Committee believes that it is 
unnecessary to state explicitly that inactive status under the 
Regulatory Element of the program is not a disciplinary action. 
Explanatory materials on this point would accompany the notice to 
members announcing the effectiveness of the rule.
    A number of commenters suggested that member firms be permitted to 
administer the Regulatory Element in-house. The Council and the SROs 
will continue to study this issue and will formulate a final response 
for the industry in the future. The program, however, initially would 
be implemented only in the NASD's testing centers. The Membership 
Committee believes this to be necessary to allow the NASD to manage the 
introduction of the program in a reasonable manner. The technology and 
administrative issues that arise with respect to the in-house 
administration of the Regulatory Element will require further study to 
be resolved.
    Finally, some commenters questioned the use of a single computer-
based training program in a Regulatory Element for all persons within 
the first 10 years of their initial registration. The Membership 
Committee and the Council recognized that there are variations in 
function and degree of involvement in the securities industry among the 
approximately 500,000 individuals registered as representatives. Both 
the Council and the NASD Membership Committee believe that the initial 
computer-based training program should deal with the most important 
compliance and regulatory concerns confronting the industry, and that 
these matters are important for all segments of the securities 
industry. The Council, the Membership Committee, and the other SROs 
would continue to review the need for more specialized computer-based 
training programs for different segments of the industry. In the 
future, these groups may recommend that such programs be introduced, 
but only after further assessing the experience with the initial single 
computer-based training program.
2. Comments Received by the MSRB
    In August 1994, the MSRB published its proposal for comment, and 
subsequently received five comment letters.
    One commenter stated that its dealer department is a two-person 
operation and the proposed Firm Element is an unreasonable burden to be 
placed on such a small operation. The Firm Element Committee of the 
Council is developing materials for dealers' use in devising and 
carrying out training programs to meet the requirements of the Firm 
Element. The Committee intends to incorporate ``samples'' of how 
different firms might approach the requirements (e.g., firms that deal 
with one product, small firms, and firms with large numbers of very 
small offices or solo representatives). The MSRB believes this future 
guidance would assuage the concerns of small firms as to the burden of 
compliance with this requirement.
    One commenter, a municipal securities broker's broker, asked 
whether it would be subject to the Firm Element requirements. The Firm 
Element is applicable to all persons who conduct business with retail, 
institutional, or investment banking customers of the dealer and the 
immediate supervisors of such persons. The Firm Element is not 
applicable to dealers who deal only with other brokers and dealers.
    One commenter stated that the MSRB has not shown that a continuing 
education program is needed in the industry. Another commenter 
expressed similar concerns. The Task Force formed by the securities 
industry to study the issue of continuing education and to develop 
recommendations concluded that the industry would be will served by a 
uniform continuing education program. The MSRB believes that a formal 
industry-wide continuing education program to keep professionals up-to-
date on products, markets, and rules would be beneficial to the 
municipal securities industry.
    Another commenter sent the same comments to the MSRB and the NASD. 
These comments have been summarized above.
    The MSRB also received two telephone inquiries from bank dealers 
concerning the planned procedure for the CRD system to track and 
communicate an individual's registration anniversary date for use with 
the Regulatory Element. Bank dealer personnel are not registered on the 
CRD system. The MSRB has discussed this notification matter on an 
informal basis with the bank regulatory agencies. Such agencies have 
stated that they would probably require banks to put procedures into 
place for internal tracking of anniversary dates.
3. Comment Received by the NYSE
    The NYSE received one letter from a member organization commenting 
on its proposal. The commenter endorsed the computer-based training of 
the Regulatory Element, but recommended that such training be required 
upon an individual's initial registration, in addition to the required 
three occasions thereafter (i.e., after the second, fifth and tenth 
registration anniversary dates).
    The NYSE believes that the continuing education program has been 
designed to apply to registered persons after they have satisfied the 
initial qualification requirements and that two years after a person's 
initial registration and qualification is an appropriate time to 
reinforce significant general regulatory and sales practice concepts 
and provide training on recent rule and other current developments 
through the continuing education process.
4. Comments Received by Other SROs
    The other SROS have not solicited, and do not intend to solicit, 
comments regarding the proposed rule change. They also have not 
received any unsolicited written comments from members or other 
interested parties. All of the SROs have made, or intend to make, 
changes to their proposals to conform to changes made by the other SROs 
in response to comments they received.

III. Date of Effectiveness of the Proposed Rule Changes 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 self-regulatory organizations consent, the Commission will:
    A. By order approve such proposed rule changes, or
    B. Institute proceedings to determine whether the proposed rule 
changes 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, N.W., Washington, D.C. 20549. 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule changes that are filed 
with the Commission, and all written communications relating to the 
proposed rule changes 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 offices of the Exchanges. All submissions should refer to the 
file number(s) in the caption above and should be submitted by January 
10, 1995.
    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\

    \11\17 CFR 200.30-3(a)(12) (1993).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-31203 Filed 12-19-94; 8:45 am]