[Federal Register Volume 64, Number 30 (Tuesday, February 16, 1999)]
[Notices]
[Pages 7680-7681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3667]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41021; File No. SR-NYSE-98-44]
Self-Regulatory Organizations; New York Stock Exchange,
Incorporated; Order Approving Proposed Rule Change Regarding an
Interpretation With Respect to Rule 344 (``Supervisory Analysts'')
February 4, 1999.
I. Introduction
On December 3, 1998, the New York Stock Exchange, Inc. (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change amending an interpretation
regarding the meaning and administration of NYSE Rule 344
(``Supervisory Analysts''). Notice of the proposal appeared in the
Federal Register on December 30, 1998.\3\ The Commission received no
comments on the proposal. This order approves the proposed rule change.
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\1\ 17 CFR 240.19b-4.
\2\ 15 U.S.C. 78s(b)(1).
\3\ Securities Exchange Act Release No. 40812 (December 21,
1998), 63 FR 71991 (December 30, 1998).
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II. Description of Proposal
The Exchange proposed to amend an interpretation concerning the
meaning and administration of NYSE Rule 344. NYSE Rule 344 establishes
standards for qualification of candidates for Supervisory Analyst
designation at member organizations. The Exchange intends to publish
the interpretation as an Interpretation Memorandum for inclusion in the
Exchange's Interpretation Handbook.
Research reports issued by a member organization must, under the
provisions of NYSE Rule 472(b) (``Communications with the Public''), be
prepared or approved by a Supervisory Analyst. NYSE Rule 344 requires
that, to be approved by the Exchange, Supervisory Analysts must provide
evidence of ``appropriate experience'' and pass the Supervisory Analyst
(Examination (the ``Series 16 Examination'') or complete the Chartered
Financial Analysts Level I Examination and pass Part I of the Series 16
Examination. The examination consists of two parts: Part I, Regulatory
Administration, and Part II, Review of Security Analysis. Currently,
the interpretation of NYSE Rule 344 requires Supervisory Analyst
candidates to have ``at least three years prior experience as a
securities analyst.'' The interpretation, as amended, requires
Supervisory Analyst candidates to have ``at least three years
experience, within the most recent six years, involving securities or
financial analysis.'' The Exchange will continue to require candidates
for the Supervisory Analyst designation to pass the Series 16
Examination.
The Exchange also proposed to include in the interpretation the
following as examples of appropriate experience: (1) Equity or fixed
income research analyst; (2) credit analyst for a securities rating
agency; (3) supervising preparation of materials prepared by financial/
securities analysts; (4) financial analytical experience gained at
banks, insurance companies or other financial institutions; and (5)
academic experience relating to the financial/securities markets/
industry.
III. Discussion
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange \4\
and, in particular,
[[Page 7681]]
the requirements of Section 6 and the rules and regulations
thereunder.\5\ The Commission believes that the proposal is consistent
with the provisions of Section 6(c)(3)(B) of the Act \6\ providing that
an exchange may examine and verify the qualifications of an applicant
to become a person associated with a member in accordance with
procedures established by the rules of the exchange and that an
exchange may bar a natural person from becoming a member or person
associated with a member, if such person does not meet such standards
of training, experience, and competence as are prescribed by the rules
of the exchange.
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\4\ In approving this rule, the Commission has considered the
proposed rule's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(c)(3)(B).
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The Commission believes the Exchange has developed standards to
help ensure that persons associated with Exchange members and member
organizations as Supervisory Analysts are appropriately qualified and
experienced to approve communications with the public. The Exchange
represents that requiring three years experience as a ``securities
analyst'' is too restrictive in light of the current business
environment. Because the role of Supervisory analyst has changed to
consist primarily of reviewing research reports prepared by others, as
opposed to, the preparation of research reports, ``appropriate
experience'' need not be limited to exclusively experience as a
``securities analyst.'' The Commission believes that expanding the
definition of industry experience as set forth in the proposal is
consistent with the requirements of the Act.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\7\ that the proposed rule change (SR-NYSE-98-44) is approved.
\7\ 15 U.S.C. 78s(b)(2).
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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. 99-3667 Filed 2-12-99; 8:45 am]
BILLING CODE 8010-01-M