Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change Relating to the Status of Former Registered Persons Serving in the Armed Forces of the United States, 76483-76485 [E5-7864]
Download as PDF
Federal Register / Vol. 70, No. 247 / Tuesday, December 27, 2005 / Notices
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
Nasdaq has neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 8 and subparagraph (f)(2) of
Rule 19b–4 thereunder.9 At any time
within 60 days of the filing of such
proposed rule change, the Commission
may summarily abrogate such rule
change if it appears to the Commission
that such action is necessary or
appropriate in the public interest, for
the protection of investors, or otherwise
in furtherance of the purposes of the
Act.10 Nasdaq will implement the
proposed rule change on January 3,
2006.
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.
Comments may be submitted by any of
the following methods:
Electronic Comments
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
All submissions should refer to File
Number SR–NASD–2005–141. This file
number should be included on the
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
10 The effective date of the original proposed rule
change is December 5, 2005, and the effective date
of Amendment No. 1 is December 9, 2005. For
purposes of calculating the 60-day period within
which the Commission may summarily abrogate the
proposed rule change, as amended, under Section
19(b)(3)(C) of the Act, the Commission considers
the period to commence on December 9, 2005, the
date on which Nasdaq submitted Amendment No.
1. See 15 U.S.C. 78s(b)(3)(C).
bjneal on PROD1PC70 with NOTICES
9 17
14:54 Dec 23, 2005
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Jonathan G. Katz,
Secretary.
[FR Doc. E5–7860 Filed 12–23–05; 8:45 am]
BILLING CODE 8010–01–P
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2005–141 on the
subject line.
VerDate Aug<31>2005
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). 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
Room. Copies of the filing also will be
available for inspection and copying at
the principal offices of the NASD. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–NASD–2005–141 and
should be submitted on or before
January 17, 2006.
Jkt 208001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52979; File No. SR–NASD–
2005–135]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing of
Proposed Rule Change Relating to the
Status of Former Registered Persons
Serving in the Armed Forces of the
United States
December 19, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
15, 2005, the National Association of
Securities Dealers, Inc. (‘‘NASD’’) filed
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00042
Fmt 4703
Sfmt 4703
76483
in Items I, II, and III below, which Items
have been prepared by the NASD. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASD is proposing to amend NASD
IM–1000–2 to toll the two-year
expiration provisions for qualification
examination requirements set forth in
NASD Rules 1021(c), 1031(c), and
1041(c) for certain former registered
persons serving in the Armed Forces of
the United States, including persons
who commence their active military
duty within two years after they have
ceased to be registered with a member
and persons who terminate their
registration with a member while on
active military duty.
Below is the text of the proposed rule
change. Proposed new language is in
italics.
*
*
*
*
*
IM–1000–2. Status of Persons Serving in
the Armed Forces of the United States
(a)–(b) No Change.
(c) Status of Formerly Registered
Persons
(1) If a person who is currently not
registered with a member volunteers for
or is called into active duty in the
Armed Forces of the United States at
any time within two years after the date
the person ceases to be registered with
a member, NASD will defer the lapse of
registration requirements set forth in
Rules 1021(c), 1031(c), and 1041(c) (i.e.,
toll the two-year expiration provisions
for qualification examination
requirements). NASD will defer the
lapse of registration requirements
commencing on the date the person
begins actively serving in the Armed
Forces of the United States, provided
that NASD is properly notified of the
person’s period of active military service
within 90 days following his or her
completion of active service or upon his
or her re-registration with a member,
whichever occurs first. The deferral will
terminate 90 days following the person’s
completion of active service in the
Armed Forces of the United States.
Accordingly, if such person does not reregister with a member within 90 days
following his or her completion of active
service in the Armed Forces of the
United States, the amount of time in
which the person must become reregistered with a member without being
subject to the qualification examination
requirements shall consist of the
standard two-year period provided in
Rules 1021(c), 1031(c), and 1041(c)
E:\FR\FM\27DEN1.SGM
27DEN1
76484
Federal Register / Vol. 70, No. 247 / Tuesday, December 27, 2005 / Notices
reduced by the period of time between
the person’s termination of registration
and beginning of active service in the
Armed Forces of the United States.
(2) If a person placed upon inactive
status while serving in the Armed Forces
of the United States ceases to be
registered with a member, NASD will
defer the lapse of registration
requirements set forth in Rules 1021(c),
1031(c), and 1041(c) (i.e., toll the twoyear expiration provisions for
qualification examination requirements)
during the pendency of his or her active
service in the Armed Forces of the
United States. NASD will defer the lapse
of registration requirements based on
existing information in the Central
Registration Depository, provided that
NASD is properly notified of the
person’s period of active military service
within two years following his or her
completion of active service or upon his
or her re-registration with a member,
whichever occurs first. The deferral will
terminate 90 days following the person’s
completion of active service in the
Armed Forces of the United States.
Accordingly, if such person does not reregister with a member within 90 days
following his or her completion of active
service in the Armed Forces of the
United States, the amount of time in
which the person must become reregistered with a member without being
subject to the qualification examination
requirements shall consist of the
standard two-year period provided in
Rules 1021(c), 1031(c), and 1041(c).
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NASD 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. NASD has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
bjneal on PROD1PC70 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Since the September 11, 2001 attacks,
NASD has provided tailored regulatory
relief to securities industry
professionals who volunteer for or are
called into active military duty. In
January 2002, NASD filed with the SEC
VerDate Aug<31>2005
14:54 Dec 23, 2005
Jkt 208001
for immediate effectiveness a rule
change that amended NASD IM–1000–
2 to codify the staff’s position regarding
the relief from NASD Rule 1120
(Continuing Education Requirements)
for securities industry professionals
who volunteer for or are called into
active military duty.3 In addition, in
conjunction with the current filing,
NASD has filed with the SEC for
immediate effectiveness a rule change 4
that amends NASD IM–1000–2 to clarify
its scope with respect to registered
persons and sole proprietors and to
codify NASD’s existing guidance
relating to the receipt of transactionrelated compensation by registered
persons actively serving in the Armed
Forces of the United States.
Recently, members have requested
that NASD toll the two-year expiration
period for securities licenses (‘‘two-year
licensing expiration provisions’’) 5 in
certain cases, such as where a person
commences active military duty within
two years of his or her having been
registered with a member or where a
person on active military duty ceases to
be registered with a member, but seeks
employment in the industry following
completion of active service.
In response, NASD is proposing to
amend NASD IM–1000–2 to toll the
‘‘two-year licensing expiration
provisions’’ for a person previously
registered with a member who
commences his or her active military
duty within two years after he or she
has ceased to be registered with the
member. Under the proposal, the tolling
would start on the date such person
enters active military service and would
terminate 90 days following the person’s
completion of active service in the
Armed Forces of the United States. The
proposal requires that NASD be
properly notified of the person’s period
of active military service within 90 days
following his or her completion of
active service or upon his or her reregistration with a member, whichever
occurs first. The proposal also provides
that if such person does not re-register
with a member within 90 days following
his or her completion of active service
3 See Securities Exchange Act Release No. 45259
(January 9, 2002), 67 FR 2256 (January 16, 2002)
(Notice of Filing and Immediate Effectiveness of
Proposed Rule Change to Relieve Registered
Representatives Serving in the Armed Forces From
Continuing Education Requirements) (SR–NASD–
2002–03).
4 See SR–NASD–2005–134.
5 NASD Rules 1021(c), 1031(c), and 1041(c)
provide that if a person does not register with a
member within two years of his or her last
registration, his or her qualification as a principal,
representative, or assistant representative will lapse
and the person must then retest to function as a
principal, representative, or assistant
representative.
PO 00000
Frm 00043
Fmt 4703
Sfmt 4703
in the Armed Forces of the United
States, the amount of time in which the
person must become re-registered with
a member without being subject to the
‘‘two-year licensing expiration
provisions’’ will consist of the standard
two-year period reduced by the period
of time between the person’s
termination of registration and
beginning of active service in the Armed
Forces of the United States.6
In addition, NASD is proposing to
amend NASD IM–1000–2 to toll the
‘‘two-year licensing expiration
provisions’’ for a person placed upon
‘‘inactive’’ status pursuant to NASD IM–
1000–2 who while serving in the Armed
Forces of the United States ceases to be
registered with a member.7 Under the
proposal, the tolling would start on the
date such person ceases to be registered
with the member and would terminate
90 days following the person’s
completion of active service in the
Armed Forces of the United States. The
proposal requires that NASD be
properly notified of the person’s period
of active military service within two
years following his or her completion of
active service or upon his or her reregistration with a member, whichever
occurs first. NASD is proposing to toll
the ‘‘two-year licensing expiration
provisions’’ for such persons based on
available information in the Central
Registration Depository (CRD) regarding
their active military status. The proposal
further provides that if such person does
not re-register with a member within 90
days following his or her completion of
active service in the Armed Forces of
the United States, the person would
have 90 days plus two years following
the end of the person’s active service in
the Armed Forces of the United States
to become re-registered with a member.8
6 For instance, under the proposal, if a person
terminates his registration with a firm on August 1,
2005, is called into active military duty on
November 1, 2005, and returns from active military
duty on May 1, 2006, NASD would toll the ‘‘twoyear licensing expiration provisions’’ beginning on
November 1, 2005, until July 30, 2006 (which is 90
days following completion of his active military
duty). In this example, NASD would have to be
notified of his period of active military service by
no later than July 30, 2006. Further, if he does not
re-register with a member by July 30, 2006, he
would then have 21 months remaining (24 months
less the three months that ran prior to his entering
active service) to re-register with a firm without
having to re-take a qualification exam or seek a
waiver.
7 Persons on ‘‘inactive’’ status due to active
military duty who do not cease their registration
with a member while serving in the Armed Forces
of the United States are not subject to the ‘‘two-year
licensing expiration provisions’’ because they are
considered registered for purposes of NASD Rules.
See NASD IM–1000–2.
8 For example, under the proposal, assume a
person registered with Firm A, enters active
military duty on January 1, 2006, and is placed on
E:\FR\FM\27DEN1.SGM
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Federal Register / Vol. 70, No. 247 / Tuesday, December 27, 2005 / Notices
NASD will announce the effective
date of the proposed rule change in a
Notice to Members (‘‘NTM’’) to be
published no later than 60 days
following Commission approval. The
effective date will be 30 days following
publication of the NTM announcing
Commission approval.
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,9 which
requires, among other things, that
NASD’s rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest. NASD believes that the
proposed rule change provides
appropriate tailored relief to persons
actively serving in the Armed Forces of
the United States in a manner consistent
with NASD’s goals of investor
protection and market integrity.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASD does not believe that the
proposed rule change will result in 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
Written comments were neither
solicited nor received.
bjneal on PROD1PC70 with NOTICES
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 self-regulatory
organization consents, the Commission
will:
‘‘inactive’’ status for purposes of NASD registration.
He then terminates his registration with Firm A on
July 1, 2006 while still on active military duty. He
returns from active military duty on December 1,
2006. In this example, NASD would remove his
‘‘inactive’’ status designation on July 1, 2006
because he has ceased to be registered with a
member. However, NASD would toll the ‘‘two-year
licensing expiration provisions’’ beginning on July
1, 2006, until March 1, 2007 (which is 90 days
following completion of his active military duty).
NASD would have to be notified of his period of
active military service by no later than December
1, 2008 (which is two years following completion
of his active military duty).
9 15 U.S.C. 78o–3(b)(6).
VerDate Aug<31>2005
14:54 Dec 23, 2005
Jkt 208001
(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
76485
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Jonathan G. Katz,
Secretary.
[FR Doc. E5–7864 Filed 12–23–05; 8:45 am]
BILLING CODE 8010–01–P
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.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–NASD–2005–135 on the subject
line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52976; File No. SR–NSCC–
2005–15]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing of
Proposed Rule Change Relating to
Buy-Ins in Its Continuous Net
Settlement System
December 19, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
• Send paper comments in triplicate
December 1, 2005, the National
to Jonathan G. Katz, Secretary,
Securities Clearing Corporation
Securities and Exchange Commission,
(‘‘NSCC’’) filed with the Securities and
Station Place, 100 F Street, NE.,
Exchange Commission (‘‘Commission’’)
Washington, DC 20549–9303.
the proposed rule change described in
All submissions should refer to File
Items I, II, and III below, which items
Number SR–NASD–2005–135. This file
have been prepared primarily by NSCC.
number should be included on the
subject line if e-mail is used. To help the The Commission is publishing this
notice to solicit comments on the
Commission process and review your
proposed rule change from interested
comments more efficiently, please use
only one method. The Commission will parties.
post all comments on the Commission’s I. Self-Regulatory Organization’s
Internet Web site (https://www.sec.gov/
Statement of the Terms of Substance of
rules/sro.shtml). Copies of the
the Proposed Rule Change
submission, all subsequent
amendments, all written statements
The purpose of this proposed rule
with respect to the proposed rule
change is to modify NSCC’s Rules with
change that are filed with the
regard to CNS Buy-Ins in an effort to
Commission, and all written
harmonize the buy-in rules of the
communications relating to the
industry and to assist NSCC members in
proposed rule change between the
reducing their exposure related to buyCommission and any person, other than ins.
those that may be withheld from the
II. Self-Regulatory Organization’s
public in accordance with the
Statement of the Purpose of, and
provisions of 5 U.S.C. 552, will be
Statutory Basis for, the Proposed Rule
available for inspection and copying in
Change
the Commission’s Public Reference
Room. Copies of such filing also will be
In its filing with the Commission,
available for inspection and copying at
NSCC included statements concerning
the principal office of the NASD. All
the purpose of and basis for the
comments received will be posted
proposed rule change and discussed any
without change; the Commission does
comments it received on the proposed
not edit personal identifying
rule change. The text of these statements
information from submissions. You
may be examined at the places specified
should submit only information that
in Item IV below. NSCC has prepared
you wish to make available publicly. All summaries, set forth in sections (A), (B),
submissions should refer to File
and (C) below, of the most significant
Number SR–NASD–2005–135 and
aspects of these statements.2
should be submitted on or before
January 17, 2006.
1 15 U.S.C. 78s(b)(1).
Paper Comments
10 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00044
Fmt 4703
Sfmt 4703
2 The Commission has modified the text of the
summaries prepared by NSCC.
E:\FR\FM\27DEN1.SGM
27DEN1
Agencies
[Federal Register Volume 70, Number 247 (Tuesday, December 27, 2005)]
[Notices]
[Pages 76483-76485]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-7864]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52979; File No. SR-NASD-2005-135]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing of Proposed Rule Change Relating to the
Status of Former Registered Persons Serving in the Armed Forces of the
United States
December 19, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 15, 2005, the National Association of Securities
Dealers, Inc. (``NASD'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the NASD. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD is proposing to amend NASD IM-1000-2 to toll the two-year
expiration provisions for qualification examination requirements set
forth in NASD Rules 1021(c), 1031(c), and 1041(c) for certain former
registered persons serving in the Armed Forces of the United States,
including persons who commence their active military duty within two
years after they have ceased to be registered with a member and persons
who terminate their registration with a member while on active military
duty.
Below is the text of the proposed rule change. Proposed new
language is in italics.
* * * * *
IM-1000-2. Status of Persons Serving in the Armed Forces of the United
States
(a)-(b) No Change.
(c) Status of Formerly Registered Persons
(1) If a person who is currently not registered with a member
volunteers for or is called into active duty in the Armed Forces of the
United States at any time within two years after the date the person
ceases to be registered with a member, NASD will defer the lapse of
registration requirements set forth in Rules 1021(c), 1031(c), and
1041(c) (i.e., toll the two-year expiration provisions for
qualification examination requirements). NASD will defer the lapse of
registration requirements commencing on the date the person begins
actively serving in the Armed Forces of the United States, provided
that NASD is properly notified of the person's period of active
military service within 90 days following his or her completion of
active service or upon his or her re-registration with a member,
whichever occurs first. The deferral will terminate 90 days following
the person's completion of active service in the Armed Forces of the
United States. Accordingly, if such person does not re-register with a
member within 90 days following his or her completion of active service
in the Armed Forces of the United States, the amount of time in which
the person must become re-registered with a member without being
subject to the qualification examination requirements shall consist of
the standard two-year period provided in Rules 1021(c), 1031(c), and
1041(c)
[[Page 76484]]
reduced by the period of time between the person's termination of
registration and beginning of active service in the Armed Forces of the
United States.
(2) If a person placed upon inactive status while serving in the
Armed Forces of the United States ceases to be registered with a
member, NASD will defer the lapse of registration requirements set
forth in Rules 1021(c), 1031(c), and 1041(c) (i.e., toll the two-year
expiration provisions for qualification examination requirements)
during the pendency of his or her active service in the Armed Forces of
the United States. NASD will defer the lapse of registration
requirements based on existing information in the Central Registration
Depository, provided that NASD is properly notified of the person's
period of active military service within two years following his or her
completion of active service or upon his or her re-registration with a
member, whichever occurs first. The deferral will terminate 90 days
following the person's completion of active service in the Armed Forces
of the United States. Accordingly, if such person does not re-register
with a member within 90 days following his or her completion of active
service in the Armed Forces of the United States, the amount of time in
which the person must become re-registered with a member without being
subject to the qualification examination requirements shall consist of
the standard two-year period provided in Rules 1021(c), 1031(c), and
1041(c).
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NASD 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. NASD 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
1. Purpose
Since the September 11, 2001 attacks, NASD has provided tailored
regulatory relief to securities industry professionals who volunteer
for or are called into active military duty. In January 2002, NASD
filed with the SEC for immediate effectiveness a rule change that
amended NASD IM-1000-2 to codify the staff's position regarding the
relief from NASD Rule 1120 (Continuing Education Requirements) for
securities industry professionals who volunteer for or are called into
active military duty.\3\ In addition, in conjunction with the current
filing, NASD has filed with the SEC for immediate effectiveness a rule
change \4\ that amends NASD IM-1000-2 to clarify its scope with respect
to registered persons and sole proprietors and to codify NASD's
existing guidance relating to the receipt of transaction-related
compensation by registered persons actively serving in the Armed Forces
of the United States.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 45259 (January 9,
2002), 67 FR 2256 (January 16, 2002) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change to Relieve Registered
Representatives Serving in the Armed Forces From Continuing
Education Requirements) (SR-NASD-2002-03).
\4\ See SR-NASD-2005-134.
---------------------------------------------------------------------------
Recently, members have requested that NASD toll the two-year
expiration period for securities licenses (``two-year licensing
expiration provisions'') \5\ in certain cases, such as where a person
commences active military duty within two years of his or her having
been registered with a member or where a person on active military duty
ceases to be registered with a member, but seeks employment in the
industry following completion of active service.
---------------------------------------------------------------------------
\5\ NASD Rules 1021(c), 1031(c), and 1041(c) provide that if a
person does not register with a member within two years of his or
her last registration, his or her qualification as a principal,
representative, or assistant representative will lapse and the
person must then retest to function as a principal, representative,
or assistant representative.
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In response, NASD is proposing to amend NASD IM-1000-2 to toll the
``two-year licensing expiration provisions'' for a person previously
registered with a member who commences his or her active military duty
within two years after he or she has ceased to be registered with the
member. Under the proposal, the tolling would start on the date such
person enters active military service and would terminate 90 days
following the person's completion of active service in the Armed Forces
of the United States. The proposal requires that NASD be properly
notified of the person's period of active military service within 90
days following his or her completion of active service or upon his or
her re-registration with a member, whichever occurs first. The proposal
also provides that if such person does not re-register with a member
within 90 days following his or her completion of active service in the
Armed Forces of the United States, the amount of time in which the
person must become re-registered with a member without being subject to
the ``two-year licensing expiration provisions'' will consist of the
standard two-year period reduced by the period of time between the
person's termination of registration and beginning of active service in
the Armed Forces of the United States.\6\
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\6\ For instance, under the proposal, if a person terminates his
registration with a firm on August 1, 2005, is called into active
military duty on November 1, 2005, and returns from active military
duty on May 1, 2006, NASD would toll the ``two-year licensing
expiration provisions'' beginning on November 1, 2005, until July
30, 2006 (which is 90 days following completion of his active
military duty). In this example, NASD would have to be notified of
his period of active military service by no later than July 30,
2006. Further, if he does not re-register with a member by July 30,
2006, he would then have 21 months remaining (24 months less the
three months that ran prior to his entering active service) to re-
register with a firm without having to re-take a qualification exam
or seek a waiver.
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In addition, NASD is proposing to amend NASD IM-1000-2 to toll the
``two-year licensing expiration provisions'' for a person placed upon
``inactive'' status pursuant to NASD IM-1000-2 who while serving in the
Armed Forces of the United States ceases to be registered with a
member.\7\ Under the proposal, the tolling would start on the date such
person ceases to be registered with the member and would terminate 90
days following the person's completion of active service in the Armed
Forces of the United States. The proposal requires that NASD be
properly notified of the person's period of active military service
within two years following his or her completion of active service or
upon his or her re-registration with a member, whichever occurs first.
NASD is proposing to toll the ``two-year licensing expiration
provisions'' for such persons based on available information in the
Central Registration Depository (CRD) regarding their active military
status. The proposal further provides that if such person does not re-
register with a member within 90 days following his or her completion
of active service in the Armed Forces of the United States, the person
would have 90 days plus two years following the end of the person's
active service in the Armed Forces of the United States to become re-
registered with a member.\8\
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\7\ Persons on ``inactive'' status due to active military duty
who do not cease their registration with a member while serving in
the Armed Forces of the United States are not subject to the ``two-
year licensing expiration provisions'' because they are considered
registered for purposes of NASD Rules. See NASD IM-1000-2.
\8\ For example, under the proposal, assume a person registered
with Firm A, enters active military duty on January 1, 2006, and is
placed on ``inactive'' status for purposes of NASD registration. He
then terminates his registration with Firm A on July 1, 2006 while
still on active military duty. He returns from active military duty
on December 1, 2006. In this example, NASD would remove his
``inactive'' status designation on July 1, 2006 because he has
ceased to be registered with a member. However, NASD would toll the
``two-year licensing expiration provisions'' beginning on July 1,
2006, until March 1, 2007 (which is 90 days following completion of
his active military duty). NASD would have to be notified of his
period of active military service by no later than December 1, 2008
(which is two years following completion of his active military
duty).
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[[Page 76485]]
NASD will announce the effective date of the proposed rule change
in a Notice to Members (``NTM'') to be published no later than 60 days
following Commission approval. The effective date will be 30 days
following publication of the NTM announcing Commission approval.
2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\9\ which requires, among
other things, that NASD's rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. NASD believes that the proposed rule change provides
appropriate tailored relief to persons actively serving in the Armed
Forces of the United States in a manner consistent with NASD's goals of
investor protection and market integrity.
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\9\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NASD does not believe that the proposed rule change will result in
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
Written 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 self-regulatory organization 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. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-NASD-2005-135 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-NASD-2005-135. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/
sro.shtml). 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 Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the NASD. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NASD-2005-135 and should be submitted on or before
January 17, 2006.
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\10\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
Jonathan G. Katz,
Secretary.
[FR Doc. E5-7864 Filed 12-23-05; 8:45 am]
BILLING CODE 8010-01-P