Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Revisions to the Series 24 Examination Program, 1382-1384 [E8-87]
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1382
Federal Register / Vol. 73, No. 5 / Tuesday, January 8, 2008 / Notices
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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
the principal office of the CHX. 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–CHX–2007–28 and should
be submitted on or before January 29,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–91 Filed 1–7–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57073; File No. SR–FINRA–
2007–028]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Revisions to
the Series 24 Examination Program
pwalker on PROD1PC71 with NOTICES
December 31, 2007.
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 December
12, 2007, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) (f/k/a
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 substantially by FINRA.
FINRA has designated this proposal 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
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Section 19(b)(3)(A)(i) of the Act 3 and
Rule 19b–4(f)(1) thereunder,4 which
renders the proposal effective upon
filing with 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
FINRA is filing revisions to the study
outline and selection specifications for
the General Securities Principal (Series
24) 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 General Securities
Principal. FINRA is not proposing any
textual changes to the By-Laws,
Schedules to the By-Laws, or Rules of
FINRA.
The text of the proposed rule change
is available at https://www.finra.org, the
principal offices of FINRA, and the
Commission’s Public Reference Room.
The Series 24 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.6
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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. FINRA has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
3 15
U.S.C. 78s(b)(3)(A)(i).
CFR 240.19b–4(f)(1).
5 FINRA also is proposing corresponding
revisions to the Series 24 question bank, but based
upon instruction from the Commission staff, FINRA
is submitting SR–FINRA–2007–028 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, SEC, dated July 24, 2000,
attached as Exhibit 3c to the proposed rule change.
The question bank is available for Commission
review.
6 17 CFR 240.24b–2.
4 17
PO 00000
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Fmt 4703
Sfmt 4703
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 7 requires
FINRA to prescribe standards of
training, experience, and competence
for persons associated with FINRA
members. In accordance with that
provision, FINRA has developed
examinations, and administers
examinations developed by other selfregulatory organizations, that are
designed to establish that persons
associated with FINRA members have
attained specified levels of competence
and knowledge. FINRA 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(a), each
associated person of a member who is
included within the definition of
principal in NASD Rule 1021(b), and
each person designated as a Chief
Compliance Officer on Schedule A of
Form BD (Uniform Application for
Broker-Dealer Registration), is required
to register with FINRA as a General
Securities Principal, or in such other
limited principal registration categories
as may be appropriate.8 An associated
person also may be required to register
as a General Securities Principal due to
other FINRA rule requirements.9 The
Series 24 examination is the FINRA
examination that qualifies an individual
to function as a General Securities
Principal. An associated person seeking
to register as a General Securities
Principal also must register as either a
General Securities Representative
(Series 7) or, depending on the scope of
his or her supervisory responsibilities,
as a Limited Representative—Corporate
Securities (Series 62).10
A committee of industry
representatives, together with FINRA
7 15
U.S.C. 78o–3(g)(3).
addition, NYSE Rule 342.13 recognizes the
Series 24 examination as an acceptable alternative
to the General Securities Sales Supervisor (Series
9/10) examination for persons whose duties do not
include supervision of options or municipal
securities sales activities. FINRA has incorporated
into its rulebook certain rules of NYSE, including
NYSE Rule 342.13. FINRA’s NYSE Rule 342.13
applies solely to those members of FINRA that also
are members of NYSE on or after July 30, 2007.
9 See, e.g., NASD Rules 3010(a)(2), 3010(a)(4) and
3012(a)(1).
10 As a prerequisite to the Series 24 examination,
FINRA also recognizes the Limited Registered
Representative (Series 17), Canada Modules of the
Series 7 (Series 37 and Series 38) and Limited
Representative—Private Securities Offerings (Series
82) examinations.
8 In
E:\FR\FM\08JAN1.SGM
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pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 73, No. 5 / Tuesday, January 8, 2008 / Notices
staff, recently undertook a review of the
Series 24 examination program. As a
result of this review, FINRA is
proposing to make 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 General
Securities Principal.
Among other revisions, FINRA is
proposing to revise the references to the
FINRA and The NASDAQ Stock Market
LLC (‘‘NASDAQ’’) rules in the study
outline to reflect NASDAQ’s separation
from FINRA (then known as NASD). In
addition, FINRA is proposing to add
sections on SEC Regulation M–A
(Mergers and Acquisitions), SEC
Regulation S–K, SEC Regulation S–X,
SEC Regulation NMS, SEC Regulation
SHO, the Sarbanes-Oxley Act, SEC Rule
3a4–1 (Associated Persons of an Issuer
Deemed Not to Be Brokers), SEC Rule
405 (Definitions of Terms), the
NASDAQ Initial Public Offering Process
(NASDAQ Head Trader Alert 2005–096)
and NYSE Rule 392 (Notification
Requirements for Offerings of Listed
Securities). FINRA also is proposing to
add sections on NASD IM–2110–7
(Interfering With the Transfer of
Customer Accounts in the Context of
Employment Disputes), IM–2440–2
(Additional Mark-Up Policy For
Transactions in Debt Securities, Except
Municipal Securities) and IM–2210–6
(Requirements for the Use of Investment
Analysis Tools), as well as on NASD
Rules 2111 (Trading Ahead of Customer
Market Orders), 2290 (Fairness
Opinions), 2370 (Borrowing From or
Lending to Customers), 2441 (Net
Transactions with Customers) and 5110
(Transactions Related to Initial Public
Offerings).
FINRA is proposing to change the title
of Section 1 of the study outline from
‘‘Supervision of Investment Banking
Activities’’ to ‘‘Supervision of
Investment Banking, Underwriting
Activities and Research’’ and the title of
Section 4 from ‘‘Sales Supervision;
General Supervision of Employees;
Regulatory Framework of NASD’’ to
‘‘Sales Supervision and General
Supervision of Employees.’’ Further, as
a result of the revisions discussed
above, the number of questions on each
section of the study outline were
modified as follows: Supervision of
Investment Banking, Underwriting
Activities and Research, increased from
23 to 33 questions; Supervision of
Trading and Market Making Activities,
decreased from 39 to 31 questions;
Supervision of Brokerage Office
Operations, decreased from 34 to 29
questions; Sales Supervision and
General Supervision of Employees,
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17:32 Jan 07, 2008
Jkt 214001
increased from 38 to 43 questions; and
Compliance with Financial
Responsibility Rules, decreased from 16
to 14 questions.
FINRA is proposing similar changes
to the Series 24 selection specifications
and question bank. The number of
questions on the Series 24 examination
will remain at 150, and candidates will
continue to have 31⁄2 hours 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.
2. Statutory Basis
FINRA believes that the proposed
revisions to the Series 24 examination
program are consistent with the
provisions of Sections 15A(b)(6) 11 and
15A(g)(3) of the Act,12 which authorize
FINRA to prescribe standards of
training, experience, and competence
for persons associated with FINRA
members.
1383
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–FINRA–2007–028 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
FINRA does not believe that the
Station Place, 100 F Street, NE.,
proposed rule change will result in any
Washington, DC 20549–1090.
burden on competition that is not
All submissions should refer to File
necessary or appropriate in furtherance
Number SR–FINRA–2007–028. This file
of the purposes of the Act.
number should be included on the
subject line if e-mail is used. To help the
C. Self-Regulatory Organization’s
Commission process and review your
Statement on Comments on the
comments more efficiently, please use
Proposed Rule Change Received From
only one method. The Commission will
Members, Participants or Others
post all comments on the Commission’s
Written comments were neither
Internet Web site (https://www.sec.gov/
solicited nor received.
rules/sro.shtml). Copies of the
submission, all subsequent
III. Date of Effectiveness of the
amendments, all written statements
Proposed Rule Change and Timing for
with respect to the proposed rule
Commission Action
The proposed rule change has become change that are filed with the
Commission, and all written
effective pursuant to Section
communications relating to the
13 and Rule 19b–
19(b)(3)(A)(i) of the Act
proposed rule change between the
4(f)(1) thereunder,14 in that the
Commission and any person, other than
proposed rule change constitutes a
stated policy, practice, or interpretation those that may be withheld from the
public in accordance with the
with respect to the meaning,
provisions of 5 U.S.C. 552, will be
administration, or enforcement of an
available for inspection and copying in
existing rule of the self-regulatory
the Commission’s Public Reference
organization. FINRA proposes to
Room, 100 F Street, NE., Washington,
implement the revised Series 24
DC 20549, on official business days
examination program on February 12,
between the hours of 10 a.m. and 3 p.m.
2008. FINRA will announce the
Copies of such filing also will be
implementation date in a Regulatory
Notice to be published on December 12, available for inspection and copying at
the principal office of FINRA. All
2007, the date FINRA filed SR–FINRA–
comments received will be posted
2007–28 with the Commission.
without change; the Commission does
At any time within 60 days of the
not edit personal identifying
filing of the proposed rule change, the
information from submissions. You
should submit only information that
11 15 U.S.C. 78o–3(b)(6).
you wish to make publicly available. All
12 15 U.S.C. 78o–3(g)(3).
13 15 U.S.C. 78s(b)(3)(A)(i).
submissions should refer to File
14 17 CFR 240.19b–4(f)(1).
Number SR–FINRA–2007–028 and
B. Self-Regulatory Organization’s
Statement on Burden on Competition
PO 00000
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1384
Federal Register / Vol. 73, No. 5 / Tuesday, January 8, 2008 / Notices
should be submitted on or before
January 29, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–87 Filed 1–7–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57076; File No. SR–FINRA–
2007–029]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Revisions to
the Series 42 Examination Program
December 31, 2007.
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 December
12, 2007, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) (f/k/a
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 substantially by FINRA.
FINRA has designated this proposal 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
filing with 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
FINRA is filing revisions to the study
outline and selection specifications for
the Limited Representative—Options
(Series 42) examination program.5 The
CFR 200.30–3(a)(12).
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).
5 FINRA also is proposing corresponding
revisions to the Series 42 question bank, but based
upon instruction from the Commission staff, FINRA
is submitting SR–FINRA–2007–029 for immediate
effectiveness pursuant to Section 19(b)(3)(A) of the
Act and Rule 19b-4(f)(1) thereunder, and is not
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 individuals taking the
examination. FINRA is not proposing
any textual changes to the By-Laws,
Schedules to the By-Laws, or Rules of
FINRA.
The text of the proposed rule change
is available at https://www.finra.org, the
principal offices of FINRA, and the
Commission’s Public Reference Room.
The Series 42 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.6
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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. FINRA 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 7 requires
FINRA to prescribe standards of
training, experience, and competence
for persons associated with FINRA
members. In accordance with that
provision, FINRA has developed
examinations, and administers
examinations developed by other selfregulatory organizations, that are
designed to establish that persons
associated with FINRA members have
attained specified levels of competence
and knowledge. FINRA 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.
15 17
pwalker on PROD1PC71 with NOTICES
1 15
VerDate Aug<31>2005
17:32 Jan 07, 2008
Jkt 214001
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, SEC, dated July 24, 2000,
attached as Exhibit 3c to the proposed rule change.
The question bank is available for Commission
review.
6 17 CFR 240.24b–2.
7 15 U.S.C. 78o–3(g)(3).
PO 00000
Frm 00071
Fmt 4703
Sfmt 4703
Pursuant to NASD Rule 1032(d), each
associated person of a member who is
included within the definition of
representative in NASD Rule 1031(b)
may register with FINRA as a Limited
Representative—Options and Security
Futures if: (1) The individual’s activities
in the investment banking and securities
business of the member are limited
solely to the solicitation or sale of
option or security futures contracts,
including option contracts on
government securities as that term is
defined in Section 3(a)(42)(D) of the Act,
for the account of a broker-dealer or
public customer; (2) the individual also
registers as either a Limited
Representative—Corporate Securities
(Series 62) or Limited Representative—
Government Securities (Series 72); (3)
the individual passes the Series 42
qualification examination; and (4) the
individual completes a firm element
continuing education program that
addresses security futures before
engaging in any security futures
business.
A committee of industry
representatives, together with FINRA
staff, recently undertook a review of the
Series 42 examination program. As a
result of this review, FINRA is
proposing to make 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 Limited
Representative—Options.
Among other revisions, FINRA is
proposing to add sections on NASD IM–
2110–7 (Interfering With the Transfer of
Customer Accounts in the Context of
Employment Disputes) and NASD Rules
2370 (Borrowing From or Lending to
Customers) and 2790 (Restrictions on
the Purchase and Sale of Initial Equity
Public Offerings).
As a result of the revisions discussed
above, FINRA is proposing to decrease
the number of sections covered by the
Series 42 outline from five to four.
Further, FINRA is proposing to modify
the section headings and the number of
questions on each section of the outline
as follows: Section 1, Terminology,
Types of Options, Investment Strategies
and Taxation, 20 questions; Section 2,
Handling Options Accounts, 14
questions; Section 3, Trading and
Settlement Practices, 10 questions; and
Section 4, Qualifications and Business
Conduct of Registered Options
Representatives, Reporting and
Recordkeeping Requirements, 6
questions.
FINRA is proposing similar changes
to the Series 42 selection specifications
and question bank. The number of
questions on the Series 42 examination
E:\FR\FM\08JAN1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 5 (Tuesday, January 8, 2008)]
[Notices]
[Pages 1382-1384]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-87]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57073; File No. SR-FINRA-2007-028]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change Relating to Revisions to the Series 24 Examination
Program
December 31, 2007.
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 December 12, 2007, Financial Industry Regulatory Authority, Inc.
(``FINRA'') (f/k/a 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 substantially by FINRA.
FINRA has designated this proposal 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 filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(i).
\4\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is filing revisions to the study outline and selection
specifications for the General Securities Principal (Series 24)
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
General Securities Principal. FINRA is not proposing any textual
changes to the By-Laws, Schedules to the By-Laws, or Rules of FINRA.
---------------------------------------------------------------------------
\5\ FINRA also is proposing corresponding revisions to the
Series 24 question bank, but based upon instruction from the
Commission staff, FINRA is submitting SR-FINRA-2007-028 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, SEC, dated July
24, 2000, attached as Exhibit 3c to the proposed rule change. The
question bank is available for Commission review.
---------------------------------------------------------------------------
The text of the proposed rule change is available at https://
www.finra.org, the principal offices of FINRA, and the Commission's
Public Reference Room. The Series 24 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.\6\
---------------------------------------------------------------------------
\6\ 17 CFR 240.24b-2.
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA 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. FINRA 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 \7\ requires FINRA to prescribe
standards of training, experience, and competence for persons
associated with FINRA members. In accordance with that provision, FINRA
has developed examinations, and administers examinations developed by
other self-regulatory organizations, that are designed to establish
that persons associated with FINRA members have attained specified
levels of competence and knowledge. FINRA 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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78o-3(g)(3).
---------------------------------------------------------------------------
Pursuant to NASD Rule 1022(a), each associated person of a member
who is included within the definition of principal in NASD Rule
1021(b), and each person designated as a Chief Compliance Officer on
Schedule A of Form BD (Uniform Application for Broker-Dealer
Registration), is required to register with FINRA as a General
Securities Principal, or in such other limited principal registration
categories as may be appropriate.\8\ An associated person also may be
required to register as a General Securities Principal due to other
FINRA rule requirements.\9\ The Series 24 examination is the FINRA
examination that qualifies an individual to function as a General
Securities Principal. An associated person seeking to register as a
General Securities Principal also must register as either a General
Securities Representative (Series 7) or, depending on the scope of his
or her supervisory responsibilities, as a Limited Representative--
Corporate Securities (Series 62).\10\
---------------------------------------------------------------------------
\8\ In addition, NYSE Rule 342.13 recognizes the Series 24
examination as an acceptable alternative to the General Securities
Sales Supervisor (Series 9/10) examination for persons whose duties
do not include supervision of options or municipal securities sales
activities. FINRA has incorporated into its rulebook certain rules
of NYSE, including NYSE Rule 342.13. FINRA's NYSE Rule 342.13
applies solely to those members of FINRA that also are members of
NYSE on or after July 30, 2007.
\9\ See, e.g., NASD Rules 3010(a)(2), 3010(a)(4) and 3012(a)(1).
\10\ As a prerequisite to the Series 24 examination, FINRA also
recognizes the Limited Registered Representative (Series 17), Canada
Modules of the Series 7 (Series 37 and Series 38) and Limited
Representative--Private Securities Offerings (Series 82)
examinations.
---------------------------------------------------------------------------
A committee of industry representatives, together with FINRA
[[Page 1383]]
staff, recently undertook a review of the Series 24 examination
program. As a result of this review, FINRA is proposing to make
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 General Securities Principal.
Among other revisions, FINRA is proposing to revise the references
to the FINRA and The NASDAQ Stock Market LLC (``NASDAQ'') rules in the
study outline to reflect NASDAQ's separation from FINRA (then known as
NASD). In addition, FINRA is proposing to add sections on SEC
Regulation M-A (Mergers and Acquisitions), SEC Regulation S-K, SEC
Regulation S-X, SEC Regulation NMS, SEC Regulation SHO, the Sarbanes-
Oxley Act, SEC Rule 3a4-1 (Associated Persons of an Issuer Deemed Not
to Be Brokers), SEC Rule 405 (Definitions of Terms), the NASDAQ Initial
Public Offering Process (NASDAQ Head Trader Alert 2005-096) and NYSE
Rule 392 (Notification Requirements for Offerings of Listed
Securities). FINRA also is proposing to add sections on NASD IM-2110-7
(Interfering With the Transfer of Customer Accounts in the Context of
Employment Disputes), IM-2440-2 (Additional Mark-Up Policy For
Transactions in Debt Securities, Except Municipal Securities) and IM-
2210-6 (Requirements for the Use of Investment Analysis Tools), as well
as on NASD Rules 2111 (Trading Ahead of Customer Market Orders), 2290
(Fairness Opinions), 2370 (Borrowing From or Lending to Customers),
2441 (Net Transactions with Customers) and 5110 (Transactions Related
to Initial Public Offerings).
FINRA is proposing to change the title of Section 1 of the study
outline from ``Supervision of Investment Banking Activities'' to
``Supervision of Investment Banking, Underwriting Activities and
Research'' and the title of Section 4 from ``Sales Supervision; General
Supervision of Employees; Regulatory Framework of NASD'' to ``Sales
Supervision and General Supervision of Employees.'' Further, as a
result of the revisions discussed above, the number of questions on
each section of the study outline were modified as follows: Supervision
of Investment Banking, Underwriting Activities and Research, increased
from 23 to 33 questions; Supervision of Trading and Market Making
Activities, decreased from 39 to 31 questions; Supervision of Brokerage
Office Operations, decreased from 34 to 29 questions; Sales Supervision
and General Supervision of Employees, increased from 38 to 43
questions; and Compliance with Financial Responsibility Rules,
decreased from 16 to 14 questions.
FINRA is proposing similar changes to the Series 24 selection
specifications and question bank. The number of questions on the Series
24 examination will remain at 150, and candidates will continue to have
3\1/2\ hours 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.
2. Statutory Basis
FINRA believes that the proposed revisions to the Series 24
examination program are consistent with the provisions of Sections
15A(b)(6) \11\ and 15A(g)(3) of the Act,\12\ which authorize FINRA to
prescribe standards of training, experience, and competence for persons
associated with FINRA 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
FINRA 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.
FINRA proposes to implement the revised Series 24 examination program
on February 12, 2008. FINRA will announce the implementation date in a
Regulatory Notice to be published on December 12, 2007, the date FINRA
filed SR-FINRA-2007-28 with the Commission.
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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 the 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-FINRA-2007-028 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-FINRA-2007-028. 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, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of FINRA. 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 publicly available. All
submissions should refer to File Number SR-FINRA-2007-028 and
[[Page 1384]]
should be submitted on or before January 29, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-87 Filed 1-7-08; 8:45 am]
BILLING CODE 8011-01-P
