Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Revisions to the Series 39 Examination Program, 44744-44745 [E6-12688]

Download as PDF 44744 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54244; File No. SR–NASD– 2006–085] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Revisions to the Series 39 Examination Program July 31, 2006. 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 July 14, 2006, the National Association of Securities Dealers, Inc. (‘‘NASD’’) 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 NASD. NASD has designated the proposed rule change as constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule of the self-regulatory organization pursuant to Section 19(b)(3)(A)(i) of the Act 3 and Rule 19b–4(f)(1) thereunder,4 which renders the proposal effective upon receipt of this filing by the Commission. 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 filing revisions to the study outline and selection specifications for the Limited Principal—Direct Participation Programs (Series 39) examination program.5 The proposed revisions update the material to reflect changes to the laws, rules and regulations covered by the examination and to better reflect the duties and responsibilities of a direct participation programs principal. NASD is not proposing any textual changes to the By1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(i). 4 17 CFR 240.19b–4(f)(1). 5 NASD also is proposing corresponding revisions to the Series 39 question bank, but based upon instruction from the Commission staff, NASD is submitting SR–NASD–2006–085 for immediate effectiveness pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(1) thereunder, and is not filing the question bank for Commission review. See letter to Alden S. Adkins, Senior Vice President and General Counsel, NASD Regulation, from Belinda Blaine, Associate Director, Division of Market Regulation (‘‘Division’’), Commission, dated July 24, 2000. The question bank is available for Commission review. sroberts on PROD1PC70 with NOTICES 2 17 VerDate Aug<31>2005 17:19 Aug 04, 2006 Jkt 208001 Laws, Schedules to the By-Laws, or Rules of NASD. The revised study outline is available on NASD’s Web site (http:// www.nasd.com), at NASD, and at the Commission.6 The Series 39 selection specifications have been submitted to the Commission under separate cover with a request for confidential treatment pursuant to Rule 24b–2 under the Act.7 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 Section 15A(g)(3) of the Act 8 requires NASD to prescribe standards of training, experience, and competence for persons associated with NASD members. In accordance with that provision, NASD has developed examinations, and administers examinations developed by other self-regulatory organizations, that are designed to establish that persons associated with NASD members have attained specified levels of competence and knowledge. NASD periodically reviews the content of the examinations to determine whether revisions are necessary or appropriate in view of changes pertaining to the subject matter covered by the examinations. Pursuant to NASD Rule 1022(e), an associated person of a member who meets the definition of principal in Rule 1021 may register with NASD as a Limited Principal—Direct Participation Programs if: (1) The individual’s activities in the investment banking and securities business are limited solely to the equity interests in or the debt of direct participation programs as defined in Rule 1022(e)(2); (2) the individual also is registered as either a General Securities Representative (Series 7) or a Limited Representative—Direct 6 Telephone conversation between Mia Zur, Special Counsel, Division, Commission, and Afshin Atabaki, Counsel, NASD, dated July 19, 2006. 7 17 CFR 240.24b–2. 8 15 U.S.C. 78o–3(g)(3). PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 Participation Programs (Series 22); and (3) the individual passes the Series 39 qualification examination. A committee of industry representatives, together with NASD staff, recently undertook a review of the Series 39 examination program. As a result of this review, NASD is proposing to make the following revisions to the study outline to reflect changes to the laws, rules and regulations covered by the examination and to better reflect the duties and responsibilities of a direct participation programs principal. NASD is proposing to add a section on SEC Form S–1 registration. NASD also is proposing to add sections on NASD Rules 2370 (Borrowing from or Lending to Customers), 3012 (Supervisory Control System), 3013 (Annual Certification of Compliance and Supervisory Processes), 3510 (Business Continuity Plan) and 3520 (Emergency Contact Information). In addition, NASD is proposing to revise the study outline to remove the sections on Section 4(3) (Transactions by a dealer) under the Securities Act of 1933 9 and SEC Rule 174 (Delivery of prospectus by dealers; exemptions under Section 4(3)).10 Further, NASD is proposing to remove the sections on NASD Rules 1040 (Registration of Assistant Representatives and Proctors), 1110 (formerly Registration of Government Securities Principals and Representatives) and 2750 (Transactions with Related Persons), as well as to remove the section on NASD Certificate of Incorporation. As a result of the revisions discussed above, the number of questions on each section of the study outline were modified as follows: Structure and Regulation of Direct Participation Program Offerings, decreased from 47 to 46 questions; Sales Supervision, General Supervision of Employees, Regulatory Framework of NASD, increased from 31 to 32 questions; and Compliance with Financial Responsibility Rules, increased from 17 to 22 questions. NASD is proposing these changes to the entire content of the Series 39 examination, including the selection specifications and question bank. The number of questions on the Series 39 examination will increase from 95 to 100 questions, and candidates will now have 21/4 hours (135 minutes) to complete the exam. Also, each question will continue to count one point, and each candidate must correctly answer 70 percent of the questions to receive a passing grade. 9 15 U.S.C. 77d(3). CFR 230.174. 10 17 E:\FR\FM\07AUN1.SGM 07AUN1 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Notices 2. Statutory Basis Electronic Comments NASD believes that the proposed revisions to the Series 39 examination program are consistent with the provisions of Sections 15A(b)(6) 11 and 15A(g)(3) of the Act,12 which authorize NASD to prescribe standards of training, experience, and competence for persons associated with NASD members. • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–NASD–2006–085 on the subject line. B. Self-Regulatory Organization’s Statement on Burden on Competition Paper Comments 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. • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. 44745 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54245; File No. SR–NASD– 2006–086] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Revisions to the Series 55 Examination Program July 31, 2006. sroberts on PROD1PC70 with NOTICES 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 July 14, 2006, the National Association of All submissions should refer to File Securities Dealers, Inc. (‘‘NASD’’) filed Number SR–NASD–2006–085. This file C. Self-Regulatory Organization’s with the Securities and Exchange Statement on Comments on the number should be included on the Proposed Rule Change Received From subject line if e-mail is used. To help the Commission (‘‘Commission’’) the proposed rule change as described in Members, Participants or Others Commission process and review your Items I, II and III below, which Items comments more efficiently, please use Written comments were neither only one method. The Commission will have been prepared by NASD. NASD solicited nor received. post all comments on the Commission’s has designated the proposed rule change as constituting a stated policy, practice, III. Date of Effectiveness of the Internet Web site (http://www.sec.gov/ or interpretation with respect to the Proposed Rule Change and Timing for rules/sro.shtml). Copies of the meaning, administration, or Commission Action submission, all subsequent enforcement of an existing rule of the The proposed rule change has become amendments, all written statements self-regulatory organization pursuant to with respect to the proposed rule effective pursuant to Section Section 19(b)(3)(A)(i) of the Act 3 and 19(b)(3)(A)(i) of the Act 13 and Rule 19b– change that are filed with the Rule 19b–4(f)(1) thereunder,4 which Commission, and all written 4(f)(1) thereunder,14 in that the renders the proposal effective upon communications relating to the proposed rule change constitutes a receipt of this filing by the Commission. stated policy, practice, or interpretation proposed rule change between the The Commission is publishing this Commission and any person, other than notice to solicit comments on the with respect to the meaning, those that may be withheld from the administration, or enforcement of an proposed rule change from interested public in accordance with the existing rule of the self-regulatory persons. provisions of 5 U.S.C. 552, will be organization. NASD proposes to I. Self-Regulatory Organization’s implement the revised Series 39 available for inspection and copying in Statement of the Terms of Substance of examination program on August 15, the Commission’s Public Reference the Proposed Rule Change 2006. NASD will announce the Room. Copies of such filing also will be NASD is filing revisions to the study implementation date in a Notice to available for inspection and copying at outline and selection specifications for Members to be published on the same the principal office of NASD. All the Limited Representative—Equity date as this filing. comments received will be posted Trader (Series 55) examination At any time within 60 days of the without change; the Commission does program.5 The proposed revisions filing of such proposed rule change, the not edit personal identifying update the material to reflect changes to Commission may summarily abrogate information from submissions. You the laws, rules and regulations covered such rule change if it appears to the should submit only information that by the examination and to better reflect Commission that such action is you wish to make available publicly. All the duties and responsibilities of an necessary or appropriate in the public submissions should refer to File equity trader representative. NASD is interest, for the protection of investors, Number SR–NASD–2006–085 and not proposing any textual changes to the or otherwise in furtherance of the should be submitted on or before purposes of the Act. August 28, 2006. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. IV. Solicitation of Comments For the Commission, by the Division of 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: U.S.C. 78o–3(b)(6). U.S.C. 78o–3(g)(3). 13 15 U.S.C. 78s(b)(3)(A)(i). 14 17 CFR 240.19b–4(f)(1). Market Regulation, pursuant to delegated authority.15 Nancy M. Morris Secretary. [FR Doc. E6–12688 Filed 8–4–06; 8:45 am] BILLING CODE 8010–01–P 11 15 12 15 VerDate Aug<31>2005 17:19 Aug 04, 2006 15 17 Jkt 208001 PO 00000 CFR 200.30–3(a)(12). Frm 00141 Fmt 4703 Sfmt 4703 3 15 U.S.C. 78s(b)(3)(A)(i). CFR 240.19b–4(f)(1). 5 NASD also is proposing corresponding revisions to the Series 55 question bank, but based upon instruction from the Commission staff, NASD is submitting SR–NASD–2006–086 for immediate effectiveness pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(1) thereunder, and is not filing the question bank for Commission review. See letter to Alden S. Adkins, Senior Vice President and General Counsel, NASD Regulation, from Belinda Blaine, Associate Director, Division of Market Regulation (‘‘Division’’), Commission, dated July 24, 2000. The question bank is available for Commission review. 4 17 E:\FR\FM\07AUN1.SGM 07AUN1

Agencies

[Federal Register Volume 71, Number 151 (Monday, August 7, 2006)]
[Notices]
[Pages 44744-44745]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-12688]



[[Page 44744]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54244; File No. SR-NASD-2006-085]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Revisions to the Series 39 Examination Program

 July 31, 2006.
    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 July 14, 2006, the National Association of Securities Dealers, Inc. 
(``NASD'') 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 NASD. NASD has 
designated the proposed rule change as constituting a stated policy, 
practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule of the self-
regulatory organization pursuant to Section 19(b)(3)(A)(i) of the Act 
\3\ and Rule 19b-4(f)(1) thereunder,\4\ which renders the proposal 
effective upon receipt of this filing by the Commission. 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).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASD is filing revisions to the study outline and selection 
specifications for the Limited Principal--Direct Participation Programs 
(Series 39) examination program.\5\ The proposed revisions update the 
material to reflect changes to the laws, rules and regulations covered 
by the examination and to better reflect the duties and 
responsibilities of a direct participation programs principal. NASD is 
not proposing any textual changes to the By-Laws, Schedules to the By-
Laws, or Rules of NASD.
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    \5\ NASD also is proposing corresponding revisions to the Series 
39 question bank, but based upon instruction from the Commission 
staff, NASD is submitting SR-NASD-2006-085 for immediate 
effectiveness pursuant to Section 19(b)(3)(A) of the Act and Rule 
19b-4(f)(1) thereunder, and is not filing the question bank for 
Commission review. See letter to Alden S. Adkins, Senior Vice 
President and General Counsel, NASD Regulation, from Belinda Blaine, 
Associate Director, Division of Market Regulation (``Division''), 
Commission, dated July 24, 2000. The question bank is available for 
Commission review.
---------------------------------------------------------------------------

    The revised study outline is available on NASD's Web site (http://
www.nasd.com), at NASD, and at the Commission.\6\ The Series 39 
selection specifications have been submitted to the Commission under 
separate cover with a request for confidential treatment pursuant to 
Rule 24b-2 under the Act.\7\
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    \6\ Telephone conversation between Mia Zur, Special Counsel, 
Division, Commission, and Afshin Atabaki, Counsel, NASD, dated July 
19, 2006.
    \7\ 17 CFR 240.24b-2.
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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
    Section 15A(g)(3) of the Act \8\ requires NASD to prescribe 
standards of training, experience, and competence for persons 
associated with NASD members. In accordance with that provision, NASD 
has developed examinations, and administers examinations developed by 
other self-regulatory organizations, that are designed to establish 
that persons associated with NASD members have attained specified 
levels of competence and knowledge. NASD periodically reviews the 
content of the examinations to determine whether revisions are 
necessary or appropriate in view of changes pertaining to the subject 
matter covered by the examinations.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78o-3(g)(3).
---------------------------------------------------------------------------

    Pursuant to NASD Rule 1022(e), an associated person of a member who 
meets the definition of principal in Rule 1021 may register with NASD 
as a Limited Principal--Direct Participation Programs if: (1) The 
individual's activities in the investment banking and securities 
business are limited solely to the equity interests in or the debt of 
direct participation programs as defined in Rule 1022(e)(2); (2) the 
individual also is registered as either a General Securities 
Representative (Series 7) or a Limited Representative--Direct 
Participation Programs (Series 22); and (3) the individual passes the 
Series 39 qualification examination.
    A committee of industry representatives, together with NASD staff, 
recently undertook a review of the Series 39 examination program. As a 
result of this review, NASD is proposing to make the following 
revisions to the study outline to reflect changes to the laws, rules 
and regulations covered by the examination and to better reflect the 
duties and responsibilities of a direct participation programs 
principal. NASD is proposing to add a section on SEC Form S-1 
registration. NASD also is proposing to add sections on NASD Rules 2370 
(Borrowing from or Lending to Customers), 3012 (Supervisory Control 
System), 3013 (Annual Certification of Compliance and Supervisory 
Processes), 3510 (Business Continuity Plan) and 3520 (Emergency Contact 
Information).
    In addition, NASD is proposing to revise the study outline to 
remove the sections on Section 4(3) (Transactions by a dealer) under 
the Securities Act of 1933 \9\ and SEC Rule 174 (Delivery of prospectus 
by dealers; exemptions under Section 4(3)).\10\ Further, NASD is 
proposing to remove the sections on NASD Rules 1040 (Registration of 
Assistant Representatives and Proctors), 1110 (formerly Registration of 
Government Securities Principals and Representatives) and 2750 
(Transactions with Related Persons), as well as to remove the section 
on NASD Certificate of Incorporation.
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    \9\ 15 U.S.C. 77d(3).
    \10\ 17 CFR 230.174.
---------------------------------------------------------------------------

    As a result of the revisions discussed above, the number of 
questions on each section of the study outline were modified as 
follows: Structure and Regulation of Direct Participation Program 
Offerings, decreased from 47 to 46 questions; Sales Supervision, 
General Supervision of Employees, Regulatory Framework of NASD, 
increased from 31 to 32 questions; and Compliance with Financial 
Responsibility Rules, increased from 17 to 22 questions.
    NASD is proposing these changes to the entire content of the Series 
39 examination, including the selection specifications and question 
bank. The number of questions on the Series 39 examination will 
increase from 95 to 100 questions, and candidates will now have 21/4 
hours (135 minutes) to complete the exam. Also, each question will 
continue to count one point, and each candidate must correctly answer 
70 percent of the questions to receive a passing grade.

[[Page 44745]]

2. Statutory Basis
    NASD believes that the proposed revisions to the Series 39 
examination program are consistent with the provisions of Sections 
15A(b)(6) \11\ and 15A(g)(3) of the Act,\12\ which authorize NASD to 
prescribe standards of training, experience, and competence for persons 
associated with NASD members.
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    \11\ 15 U.S.C. 78o-3(b)(6).
    \12\ 15 U.S.C. 78o-3(g)(3).
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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

    The proposed rule change has become effective pursuant to Section 
19(b)(3)(A)(i) of the Act \13\ and Rule 19b-4(f)(1) thereunder,\14\ in 
that the proposed rule change constitutes a stated policy, practice, or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule of the self-regulatory organization. 
NASD proposes to implement the revised Series 39 examination program on 
August 15, 2006. NASD will announce the implementation date in a Notice 
to Members to be published on the same date as this filing.
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    \13\ 15 U.S.C. 78s(b)(3)(A)(i).
    \14\ 17 CFR 240.19b-4(f)(1).
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    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.

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-NASD-2006-085 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASD-2006-085. 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 (http://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 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-2006-085 and should be submitted on or before August 28, 2006.
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    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
Nancy M. Morris
Secretary.
[FR Doc. E6-12688 Filed 8-4-06; 8:45 am]
BILLING CODE 8010-01-P