Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Series 9/10 Examination Program, 834-837 [2015-33311]

Download as PDF 834 Federal Register / Vol. 81, No. 4 / Thursday, January 7, 2016 / Notices Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BX–2015–085 on the subject line. Paper Comments rmajette on DSK2TPTVN1PROD with NOTICES • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BX–2015–085. This file number should be included on the subject line if email 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 Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal offices of the Exchange. 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–BX– 2015–085, and should be submitted on or before January 28, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Jill M. Peterson, Assistant Secretary. [FR Doc. 2015–33307 Filed 1–6–16; 8:45 am] BILLING CODE 8011–01–P 20 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 14:27 Jan 06, 2016 Jkt 238001 SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–363, OMB Control No. 3235–0413] Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 20549–2736. Extension: Rule 17Ad–16. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (‘PRA’’), the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget (‘‘OMB’’) a request for approval of extension of the existing collection of information provided for in Rule 17Ad– 16 (17 CFR 240.17Ad–16) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). Rule 17Ad–16 requires a registered transfer agent to provide written notice to the appropriate qualified registered securities depository when assuming or terminating transfer agent services on behalf of an issuer or when changing its name or address. In addition, transfer agents that provide such notice shall maintain such notice for a period of at least two years in an easily accessible place. This rule addresses the problem of certificate transfer delays caused by transfer requests that are directed to the wrong transfer agent or the wrong address. We estimate that the transfer agent industry submits approximately 6,970 Rule 17Ad–16 notices to appropriate qualified registered securities depositories. The staff estimates that the average amount of time necessary to create and submit each notice is approximately 15 minutes per notice. Accordingly, the estimated total industry burden is 1,743 hours per year (15 minutes multiplied by 6,970 filed annually). Because the information needed by transfer agents to properly notify the appropriate registered securities depository is readily available to them and the report is simple and straightforward, the cost is relatively minimal. The average internal compliance cost to prepare and send a notice is approximately $7.50 (15 minutes at $30 per hour). This yields an industry-wide internal compliance cost estimate of $52,275 (6,970 notices multiplied by $7.50 per notice). PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. The public may view background documentation for this information collection at the following Web site: www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Shagufta_ Ahmed@omb.eop.gov; and (ii) Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or by sending an email to: PRA_ Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: December 30, 2015. Jill M. Peterson, Assistant Secretary. [FR Doc. 2015–33215 Filed 1–6–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76812; File No. SR–FINRA– 2015–058] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Series 9/10 Examination Program December 31, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘SEA’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 23, 2015, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) 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 FINRA. FINRA 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’’ under Section 19(b)(3)(A)(i) of the Act 3 and Rule 19b–4(f)(1) thereunder,4 which 1 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). 2 17 E:\FR\FM\07JAN1.SGM 07JAN1 Federal Register / Vol. 81, No. 4 / Thursday, January 7, 2016 / Notices 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change Section 15A(g)(3) of the Act 8 authorizes FINRA to prescribe standards of training, experience, and competence for persons associated with FINRA members. In accordance with that provision, FINRA has developed examinations that are designed to establish that persons associated with FINRA members have attained specified levels of competence and knowledge, consistent with applicable registration requirements under FINRA rules. 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. NASD Rule 1022(g) states that members may register with FINRA an individual as a General Securities Sales Supervisor if the individual’s supervisory responsibilities in the investment banking and securities business are limited solely to the securities sales activities of a member, including the training of sales and sales supervisory personnel and the maintenance of records of original entry and ledger accounts of the member required to be maintained in branch offices by SEC recordkeeping rules.9 A General Securities Sales Supervisor is precluded from performing any of the following activities: (1) Functioning in a principal capacity with responsibility over any area of business activity not stated above; (2) supervision of the origination and structuring of underwritings; (3) supervision of market making commitments; (4) supervision of the custody of firm or customer funds or securities for purposes of SEA Rule 15c3–3; or (5) supervision of overall compliance with financial responsibility rules for broker-dealers promulgated pursuant to the provisions of the Act. Further, a General Securities Sales Supervisor is not qualified to be included for purposes of the principal numerical requirements of NASD Rule 1021(e)(1). To register as a General Securities Sales Supervisor, an individual must be registered pursuant to the NASD Rule 1030 Series as a General Securities Representative. In addition, the FINRA is filing revisions to the content outline and selection specifications for the General Securities Sales Supervisor (Series 9/10) examination program.5 The proposed revisions update the material to reflect changes to the laws, rules and regulations covered by the examination and to incorporate the functions and associated tasks currently performed by a General Securities Sales Supervisor. In addition, FINRA is proposing to make changes to the format of the content outline. FINRA is not proposing any textual changes to the By-Laws, Schedules to the By-Laws or Rules of FINRA. The revised content outline is attached.6 The Series 9/10 selection specifications have been submitted to the Commission under separate cover with a request for confidential treatment pursuant to SEA Rule 24b–2.7 The text of [sic] the proposed rule change is available on FINRA’s Web site at http://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change rmajette on DSK2TPTVN1PROD with NOTICES 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. 5 FINRA also is proposing corresponding revisions to the Series 9/10 question bank. Based on instruction from SEC staff, FINRA is submitting this filing 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 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. The question bank is available for SEC review. 6 The Commission notes that the revised content outline is attached to the proposed rule change, and is available for viewing on FINRA’s Web site. The content outline is not attached to this notice. 7 17 CFR 240.24b–2. VerDate Sep<11>2014 14:27 Jan 06, 2016 Jkt 238001 1. Purpose 8 15 U.S.C. 78o–3(g)(3). Rule 1022(g) also includes additional requirements applicable to General Securities Sales Supervisors engaged in securities futures activities. 9 NASD PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 835 individual must pass the Series 9/10 examination. In consultation with a committee of industry representatives, FINRA recently undertook a review of the Series 9/10 examination program. As a result of this review, FINRA is proposing to make revisions to the content outline to reflect changes to the laws, rules and regulations covered by the examination and to incorporate the functions and associated tasks currently performed by a General Securities Sales Supervisor. FINRA also is proposing to make changes to the format of the content outline. Current Content Outline The current content outline is divided into six sections. The following are the six sections and the number of questions associated with each of the sections, denoted Section 1 through Section 6: 1. Hiring, Qualifications, and Continuing Education, 9 questions; 2. Supervision of Accounts and Sales Activities, 94 questions; 3. Conduct of Associated Persons, 14 questions; 4. Recordkeeping Requirements, 8 questions; 5. Municipal Securities Regulation, 20 questions; 6. Options Regulation, 55 questions. Each section also includes the applicable laws, rules and regulations associated with that section. The current content outline also includes a preface (addressing, among other things, the purpose, administration and scoring of the examination), sample questions and reference materials. Proposed Revisions FINRA is proposing to divide the content outline into two parts with eight major job functions that are performed by a General Securities Sales Supervisor. The following are the two parts each with four major job functions, denoted as Parts 1 and 2 with Function 1 through Function 4, respectively, with the associated number of questions: Part 1 Function 1: Supervise Associated Persons and Personnel Management Activities, 28 questions; Function 2: Supervise the Opening and Maintenance of Customer Accounts, 49 questions; Function 3: Supervise Sales Practices and General Trading Activities, 52 questions; Function 4: Supervise Communications with the Public, 16 questions. E:\FR\FM\07JAN1.SGM 07JAN1 rmajette on DSK2TPTVN1PROD with NOTICES 836 Federal Register / Vol. 81, No. 4 / Thursday, January 7, 2016 / Notices Part 2 Function 1: Supervise the Opening and Maintenance of Customer Options Accounts, 18 questions; Function 2: Supervise Sales Practices and General Options Trading Activities, 19 questions; Function 3: Supervise Options Communications, 5 questions; Function 4: Supervise Associated Persons and Personnel Management Activities, 13 questions. FINRA is proposing to adjust the number of questions assigned to each major job function to ensure that the overall examination better reflects the key tasks performed by a General Securities Sales Supervisor. The questions on the revised Series 9/10 examination will place greater emphasis on key tasks such as supervision of registered persons, sales practices and compliance. Each function also includes specific tasks describing activities associated with performing that function. In Part 1, there are five tasks (1.1–1.5) associated with Function 1; four tasks (2.1–2.4) associated with Function 2; five tasks (3.1–3.5) associated with Function 3; and four tasks (4.1–4.4) associated with Function 4. In Part 2, there are three tasks (1.1–1.3) associated with Function 1; four tasks (2.1–2.4) associated with Function 2; three tasks (3.1–3.3) associated with Function 3; and one task (4.1) associated with Function 4.10 By way of example, one such task (Task 4.2 in Part 1) is review retail communications and determine appropriate approval.11 Further, the content outline lists the knowledge required to perform each function and associated tasks (e.g., types of retail communications, required approvals).12 In addition, where applicable, the content outline lists the laws, rules and regulations a candidate is expected to know to perform each function and associated tasks. These include the applicable FINRA Rules (e.g., FINRA Rule 2210), MSRB Rules (e.g., MSRB Rule G–27(e)) and SEC rules (e.g., Rule 135a under the Securities Act of 1933).13 FINRA conducted a job analysis study of General Securities Sales Supervisors, which included the use of a survey, in developing each function and associated tasks and updating the required knowledge set forth in the revised content outline. The functions and associated tasks, which appear in the revised content outline for the first time, reflect the day-to-day 10 See Exhibit 3a, Outline Pages 5–26. Exhibit 3a, Outline Page 17. 12 See Exhibit 3a, Outline Page 17. 13 See Exhibit 3a, Outline Page 17–18. 11 See VerDate Sep<11>2014 14:27 Jan 06, 2016 Jkt 238001 activities of a General Securities Sales Supervisor. As noted above, FINRA also is proposing to revise the content outline to reflect changes to the laws, rules and regulations covered by the examination. Among other revisions, FINRA is proposing to revise the content outline to reflect the adoption of rules in the consolidated FINRA rulebook (e.g., NASD Rule 2310 (Recommendations to Customers (Suitability)), NASD Rule 2212 (Telemarketing) and NASD Rule 3110 (Books and Records) were adopted as FINRA Rule 2111 (Suitability), FINRA Rule 3230 (Telemarketing) and FINRA Rule 4510 Series (Books and Records Requirements), respectively).14 FINRA is proposing similar changes to the Series 9/10 selection specifications and question bank. Finally, FINRA is proposing to make changes to the format of the content outline, including the preface, sample questions and reference materials. Among other changes, FINRA is proposing to: (1) Add a table of contents; 15 (2) provide more details regarding the purpose of the examination; 16 (3) provide more details on the application procedures; 17 (4) provide more details on the development and maintenance of the content outline and examination; 18 (5) explain that the passing scores are established by FINRA staff, in consultation with a committee of industry representatives, using a standard setting procedure, and that a statistical adjustment process known as equating is used in scoring exams; 19 and (6) note that each candidate will receive a report at the end of the test session, which will indicate a pass or fail status and include a score profile listing the candidate’s performance on each major content area covered on the examination.20 The number of questions on the Series 9/10 examination will remain at 200 multiple-choice questions (55 on the Series 9 and 145 on the Series 10).21 14 See Rule Conversion Chart, available at http:// www.finra.org/Industry/Regulation/FINRARules/ p085560. 15 See Exhibit 3a, Outline Page 1. 16 See Exhibit 3a, Outline Page 2. 17 See Exhibit 3a, Outline Page 2. 18 See Exhibit 3a, Outline Page 3. 19 See Exhibit 3a, Outline Page 4. 20 See Exhibit 3a, Outline Page 4. 21 Consistent with FINRA’s practice of including ‘‘pretest’’ items on certain qualification examinations, which is designed to ensure that new examination items meet acceptable testing standards prior to use for scoring purposes, the examinations include 15 additional, unidentified pretest items that do not contribute towards the candidate’s score. Therefore, the examination actually consists of 215 items, 200 of which are PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 Candidates will have 90 minutes to complete the Series 9 exam and 240 minutes to complete the Series 10 exam. The passing score for the Series 9 is 70 percent and the passing score for the Series 10 is 70 percent. These are unchanged. Availability of Content Outline The current Series 9/10 content outline is available on FINRA’s Web site, at www.finra.org/ brokerqualifications/exams. The revised Series 9/10 content outline will replace the current content outline on FINRA’s Web site. FINRA is filing the proposed rule change for immediate effectiveness. FINRA proposes to implement the revised Series 9/10 examination program on March 7, 2016. FINRA will announce the proposed rule change and the implementation date in a Regulatory Notice. 2. Statutory Basis FINRA believes that the proposed revisions to the Series 9/10 examination program are consistent with the provisions of Section 15A(b)(6) of the Act,22 which requires, among other things, that FINRA 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, and Section 15A(g)(3) of the Act,23 which authorizes FINRA to prescribe standards of training, experience, and competence for persons associated with FINRA members. FINRA believes that the proposed revisions will further these purposes by updating the examination program to reflect changes to the laws, rules and regulations covered by the examination and to incorporate the functions and associated tasks currently performed by a General Securities Sales Supervisor. 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. The updated examination aligns with the functions and associated tasks currently performed by a General Securities Sales Supervisor and tests knowledge of the most current laws, rules, regulations and skills relevant to those functions scored. The 15 pretest items are randomly distributed throughout the examination. 22 15 U.S.C. 78o–3(b)(6). 23 15 U.S.C. 78o–3(g)(3). E:\FR\FM\07JAN1.SGM 07JAN1 Federal Register / Vol. 81, No. 4 / Thursday, January 7, 2016 / Notices and associated tasks. As such, the proposed revisions would make the examination more efficient and effective. 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 foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 24 and paragraph (f)(1) of Rule 19b–4 thereunder.25 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or 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: rmajette on DSK2TPTVN1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– FINRA–2015–058 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–FINRA–2015–058. This file number should be included on the subject line if email 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 24 15 U.S.C. 78s(b)(3)(A). VerDate Sep<11>2014 14:27 Jan 06, 2016 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 Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal offices 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 available publicly. All submissions should refer to File Number SR–FINRA– 2015–058, and should be submitted on or before January 28, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.26 Jill M. Peterson, Assistant Secretary. [FR Doc. 2015–33311 Filed 1–6–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–247; OMB Control No. 3235–0259] Submission for OMB Review; Comment Request Upon Written Request Copies Available From: U.S. Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 20549–2736. Reinstatement: Rule 19h–1 Notice by a Self-Regulatory Organization of Proposed Admission to or Continuance in Membership or Participation or Association with a Member of Any Person Subject to a Statutory Disqualification, and Applications to the Commission for Relief Therefrom. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission 25 17 Jkt 238001 PO 00000 CFR 240.19b–4(f)(1). Frm 00104 Fmt 4703 Sfmt 4703 837 (‘‘Commission’’) has submitted to the Office of Management and Budget (‘‘OMB’’) a request for approval of a reinstatement, with change, of a previously approved collection for which approval has expired—Rule 19h– 1, Notice by a Self-Regulatory Organization of Proposed Admission to or Continuance in Membership or Participation or Association with a Member of Any Person Subject to a Statutory Disqualification, and Applications to the Commission for Relief Therefrom (17 CFR 240.19h–1). Rule 19h–1 (‘‘Rule’’) under the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’) prescribes the form and content of notices and applications by self-regulatory organizations (‘‘SROs’’) regarding proposed admissions to, or continuances in, membership, participation or association with a member of any person subject to a statutory disqualification. The Commission uses the information provided in the submissions filed pursuant to Rule 19h–1 to review decisions of SROs to permit the entry into or continuance in the securities business of persons who have committed serious misconduct. The filings submitted pursuant to the Rule also permit inclusion of an application to the Commission for consent to associate with a member of an SRO notwithstanding a Commission order barring such association. The Commission reviews filings made pursuant to the Rule to ascertain whether it is in the public interest to permit the employment in the securities business of persons subject to a statutory disqualification. The filings contain information that is essential to the staff’s review and ultimate determination on whether an association or employment is in the public interest and consistent with investor protection. Without these filings, persons subject to a statutory disqualification could reenter or continue employment in the securities business without the Commission’s critical review of their character, ability to act as a fiduciary, and their employer’s plan of supervision. The failure to collect and review this information could result in significant harm to the investing public. The Commission estimates the annual burden of responding to this collection of information is as follows. 26 17 E:\FR\FM\07JAN1.SGM CFR 200.30–3(a)(12). 07JAN1

Agencies

[Federal Register Volume 81, Number 4 (Thursday, January 7, 2016)]
[Notices]
[Pages 834-837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-33311]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76812; File No. SR-FINRA-2015-058]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to the Series 9/10 Examination Program

December 31, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``SEA'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on December 23, 2015, Financial Industry Regulatory 
Authority, Inc. (``FINRA'') 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 FINRA. FINRA 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'' under Section 19(b)(3)(A)(i) of the Act \3\ and Rule 19b-4(f)(1) 
thereunder,\4\ which

[[Page 835]]

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.
---------------------------------------------------------------------------

    \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 the 
Substance of the Proposed Rule Change

    FINRA is filing revisions to the content outline and selection 
specifications for the General Securities Sales Supervisor (Series 9/
10) examination program.\5\ The proposed revisions update the material 
to reflect changes to the laws, rules and regulations covered by the 
examination and to incorporate the functions and associated tasks 
currently performed by a General Securities Sales Supervisor. In 
addition, FINRA is proposing to make changes to the format of the 
content outline. 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 9/10 question bank. Based on instruction from SEC staff, 
FINRA is submitting this filing 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 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. The question bank is 
available for SEC review.
---------------------------------------------------------------------------

    The revised content outline is attached.\6\ The Series 9/10 
selection specifications have been submitted to the Commission under 
separate cover with a request for confidential treatment pursuant to 
SEA Rule 24b-2.\7\
---------------------------------------------------------------------------

    \6\ The Commission notes that the revised content outline is 
attached to the proposed rule change, and is available for viewing 
on FINRA's Web site. The content outline is not attached to this 
notice.
    \7\ 17 CFR 240.24b-2.
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    The text of [sic] the proposed rule change is available on FINRA's 
Web site at http://www.finra.org, at the principal office of FINRA and 
at the Commission's Public Reference Room.

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 \8\ authorizes FINRA to prescribe 
standards of training, experience, and competence for persons 
associated with FINRA members. In accordance with that provision, FINRA 
has developed examinations that are designed to establish that persons 
associated with FINRA members have attained specified levels of 
competence and knowledge, consistent with applicable registration 
requirements under FINRA rules. 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.
---------------------------------------------------------------------------

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

    NASD Rule 1022(g) states that members may register with FINRA an 
individual as a General Securities Sales Supervisor if the individual's 
supervisory responsibilities in the investment banking and securities 
business are limited solely to the securities sales activities of a 
member, including the training of sales and sales supervisory personnel 
and the maintenance of records of original entry and ledger accounts of 
the member required to be maintained in branch offices by SEC 
recordkeeping rules.\9\ A General Securities Sales Supervisor is 
precluded from performing any of the following activities: (1) 
Functioning in a principal capacity with responsibility over any area 
of business activity not stated above; (2) supervision of the 
origination and structuring of underwritings; (3) supervision of market 
making commitments; (4) supervision of the custody of firm or customer 
funds or securities for purposes of SEA Rule 15c3-3; or (5) supervision 
of overall compliance with financial responsibility rules for broker-
dealers promulgated pursuant to the provisions of the Act. Further, a 
General Securities Sales Supervisor is not qualified to be included for 
purposes of the principal numerical requirements of NASD Rule 
1021(e)(1).
---------------------------------------------------------------------------

    \9\ NASD Rule 1022(g) also includes additional requirements 
applicable to General Securities Sales Supervisors engaged in 
securities futures activities.
---------------------------------------------------------------------------

    To register as a General Securities Sales Supervisor, an individual 
must be registered pursuant to the NASD Rule 1030 Series as a General 
Securities Representative. In addition, the individual must pass the 
Series 9/10 examination.
    In consultation with a committee of industry representatives, FINRA 
recently undertook a review of the Series 9/10 examination program. As 
a result of this review, FINRA is proposing to make revisions to the 
content outline to reflect changes to the laws, rules and regulations 
covered by the examination and to incorporate the functions and 
associated tasks currently performed by a General Securities Sales 
Supervisor. FINRA also is proposing to make changes to the format of 
the content outline.
Current Content Outline
    The current content outline is divided into six sections. The 
following are the six sections and the number of questions associated 
with each of the sections, denoted Section 1 through Section 6:
    1. Hiring, Qualifications, and Continuing Education, 9 questions;
    2. Supervision of Accounts and Sales Activities, 94 questions;
    3. Conduct of Associated Persons, 14 questions;
    4. Recordkeeping Requirements, 8 questions;
    5. Municipal Securities Regulation, 20 questions;
    6. Options Regulation, 55 questions.
    Each section also includes the applicable laws, rules and 
regulations associated with that section. The current content outline 
also includes a preface (addressing, among other things, the purpose, 
administration and scoring of the examination), sample questions and 
reference materials.
Proposed Revisions
    FINRA is proposing to divide the content outline into two parts 
with eight major job functions that are performed by a General 
Securities Sales Supervisor. The following are the two parts each with 
four major job functions, denoted as Parts 1 and 2 with Function 1 
through Function 4, respectively, with the associated number of 
questions:
Part 1
    Function 1: Supervise Associated Persons and Personnel Management 
Activities, 28 questions;
    Function 2: Supervise the Opening and Maintenance of Customer 
Accounts, 49 questions;
    Function 3: Supervise Sales Practices and General Trading 
Activities, 52 questions;
    Function 4: Supervise Communications with the Public, 16 questions.

[[Page 836]]

Part 2
    Function 1: Supervise the Opening and Maintenance of Customer 
Options Accounts, 18 questions;
    Function 2: Supervise Sales Practices and General Options Trading 
Activities, 19 questions;
    Function 3: Supervise Options Communications, 5 questions;
    Function 4: Supervise Associated Persons and Personnel Management 
Activities, 13 questions.
    FINRA is proposing to adjust the number of questions assigned to 
each major job function to ensure that the overall examination better 
reflects the key tasks performed by a General Securities Sales 
Supervisor. The questions on the revised Series 9/10 examination will 
place greater emphasis on key tasks such as supervision of registered 
persons, sales practices and compliance.
    Each function also includes specific tasks describing activities 
associated with performing that function. In Part 1, there are five 
tasks (1.1-1.5) associated with Function 1; four tasks (2.1-2.4) 
associated with Function 2; five tasks (3.1-3.5) associated with 
Function 3; and four tasks (4.1-4.4) associated with Function 4. In 
Part 2, there are three tasks (1.1-1.3) associated with Function 1; 
four tasks (2.1-2.4) associated with Function 2; three tasks (3.1-3.3) 
associated with Function 3; and one task (4.1) associated with Function 
4.\10\ By way of example, one such task (Task 4.2 in Part 1) is review 
retail communications and determine appropriate approval.\11\ Further, 
the content outline lists the knowledge required to perform each 
function and associated tasks (e.g., types of retail communications, 
required approvals).\12\ In addition, where applicable, the content 
outline lists the laws, rules and regulations a candidate is expected 
to know to perform each function and associated tasks. These include 
the applicable FINRA Rules (e.g., FINRA Rule 2210), MSRB Rules (e.g., 
MSRB Rule G-27(e)) and SEC rules (e.g., Rule 135a under the Securities 
Act of 1933).\13\ FINRA conducted a job analysis study of General 
Securities Sales Supervisors, which included the use of a survey, in 
developing each function and associated tasks and updating the required 
knowledge set forth in the revised content outline. The functions and 
associated tasks, which appear in the revised content outline for the 
first time, reflect the day-to-day activities of a General Securities 
Sales Supervisor.
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    \10\ See Exhibit 3a, Outline Pages 5-26.
    \11\ See Exhibit 3a, Outline Page 17.
    \12\ See Exhibit 3a, Outline Page 17.
    \13\ See Exhibit 3a, Outline Page 17-18.
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    As noted above, FINRA also is proposing to revise the content 
outline to reflect changes to the laws, rules and regulations covered 
by the examination. Among other revisions, FINRA is proposing to revise 
the content outline to reflect the adoption of rules in the 
consolidated FINRA rulebook (e.g., NASD Rule 2310 (Recommendations to 
Customers (Suitability)), NASD Rule 2212 (Telemarketing) and NASD Rule 
3110 (Books and Records) were adopted as FINRA Rule 2111 (Suitability), 
FINRA Rule 3230 (Telemarketing) and FINRA Rule 4510 Series (Books and 
Records Requirements), respectively).\14\
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    \14\ See Rule Conversion Chart, available at http://www.finra.org/Industry/Regulation/FINRARules/p085560.
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    FINRA is proposing similar changes to the Series 9/10 selection 
specifications and question bank.
    Finally, FINRA is proposing to make changes to the format of the 
content outline, including the preface, sample questions and reference 
materials. Among other changes, FINRA is proposing to: (1) Add a table 
of contents; \15\ (2) provide more details regarding the purpose of the 
examination; \16\ (3) provide more details on the application 
procedures; \17\ (4) provide more details on the development and 
maintenance of the content outline and examination; \18\ (5) explain 
that the passing scores are established by FINRA staff, in consultation 
with a committee of industry representatives, using a standard setting 
procedure, and that a statistical adjustment process known as equating 
is used in scoring exams; \19\ and (6) note that each candidate will 
receive a report at the end of the test session, which will indicate a 
pass or fail status and include a score profile listing the candidate's 
performance on each major content area covered on the examination.\20\
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    \15\ See Exhibit 3a, Outline Page 1.
    \16\ See Exhibit 3a, Outline Page 2.
    \17\ See Exhibit 3a, Outline Page 2.
    \18\ See Exhibit 3a, Outline Page 3.
    \19\ See Exhibit 3a, Outline Page 4.
    \20\ See Exhibit 3a, Outline Page 4.
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    The number of questions on the Series 9/10 examination will remain 
at 200 multiple-choice questions (55 on the Series 9 and 145 on the 
Series 10).\21\ Candidates will have 90 minutes to complete the Series 
9 exam and 240 minutes to complete the Series 10 exam. The passing 
score for the Series 9 is 70 percent and the passing score for the 
Series 10 is 70 percent. These are unchanged.
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    \21\ Consistent with FINRA's practice of including ``pretest'' 
items on certain qualification examinations, which is designed to 
ensure that new examination items meet acceptable testing standards 
prior to use for scoring purposes, the examinations include 15 
additional, unidentified pretest items that do not contribute 
towards the candidate's score. Therefore, the examination actually 
consists of 215 items, 200 of which are scored. The 15 pretest items 
are randomly distributed throughout the examination.
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Availability of Content Outline
    The current Series 9/10 content outline is available on FINRA's Web 
site, at www.finra.org/brokerqualifications/exams. The revised Series 
9/10 content outline will replace the current content outline on 
FINRA's Web site.
    FINRA is filing the proposed rule change for immediate 
effectiveness. FINRA proposes to implement the revised Series 9/10 
examination program on March 7, 2016. FINRA will announce the proposed 
rule change and the implementation date in a Regulatory Notice.
2. Statutory Basis
    FINRA believes that the proposed revisions to the Series 9/10 
examination program are consistent with the provisions of Section 
15A(b)(6) of the Act,\22\ which requires, among other things, that 
FINRA 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, and 
Section 15A(g)(3) of the Act,\23\ which authorizes FINRA to prescribe 
standards of training, experience, and competence for persons 
associated with FINRA members. FINRA believes that the proposed 
revisions will further these purposes by updating the examination 
program to reflect changes to the laws, rules and regulations covered 
by the examination and to incorporate the functions and associated 
tasks currently performed by a General Securities Sales Supervisor.
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    \22\ 15 U.S.C. 78o-3(b)(6).
    \23\ 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. The updated examination aligns 
with the functions and associated tasks currently performed by a 
General Securities Sales Supervisor and tests knowledge of the most 
current laws, rules, regulations and skills relevant to those functions

[[Page 837]]

and associated tasks. As such, the proposed revisions would make the 
examination more efficient and effective.

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 foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \24\ and paragraph (f)(1) of Rule 19b-4 
thereunder.\25\ At any time within 60 days of the filing of the 
proposed rule change, the Commission summarily may temporarily suspend 
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. If 
the Commission takes such action, the Commission shall institute 
proceedings to determine whether the proposed rule should be approved 
or disapproved.
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    \24\ 15 U.S.C. 78s(b)(3)(A).
    \25\ 17 CFR 240.19b-4(f)(1).
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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 email to rule-comments@sec.gov. Please include 
File Number SR-FINRA-2015-058 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2015-058. This 
file number should be included on the subject line if email 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 Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal offices 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 available publicly. All 
submissions should refer to File Number SR-FINRA-2015-058, and should 
be submitted on or before January 28, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-33311 Filed 1-6-16; 8:45 am]
 BILLING CODE 8011-01-P