73 FR 5 pgs. 1389-1390 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Revisions to the Series 72 Examination Program
Type: NOTICEVolume: 73Number: 5Pages: 1389 - 1390
Docket number: [Release No. 34-57080; File No. SR-FINRA-2007-032]
FR document: [FR Doc. E8-93 Filed 1-7-08; 8:45 am]
Agency: Securities and Exchange Commission
Official PDF Version: PDF Version
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57080; File No. SR-FINRA-2007-032]
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Revisions to the Series 72 Examination Program
December 31, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 ("Act")1and Rule 19b-4 thereunder,2notice 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 Act3and Rule 19b-4(f)(1) thereunder,4which 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.
Footnotes:
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 Limited Representative-Government Securities (Series 72) examination program.5The 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 Limited Representative-Equity Trader. FINRA is not proposing any textual changes to the By-Laws, Schedules to the By-Laws, or Rules of FINRA.
Footnotes:
5 FINRA also is proposing corresponding revisions to the Series 72 question bank, but based upon instruction from the Commission staff, FINRA is submitting SR-FINRA-2007-032 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 http://www.finra.org , the principal offices of FINRA, and the Commission's Public Reference Room. The Series 72 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
Footnotes:
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 Act7requires 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.
Footnotes:
7 15 U.S.C. 78o-3(g)(3).
Pursuant to NASD Rule 1032(g), 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-Government Securities if: (1) The individual's activities in the investment banking and securities business of the member are limited solely to the solicitation, purchase and sale of "government securities," as that term is defined in Sections 3(a)(42)(A) through (C) of the Act, for the account of a broker-dealer or public customer; and (2) the individual passes the Series 72 qualification examination.
A committee of industry representatives, together with FINRA staff, recently undertook a review of the Series 72 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-Government Securities.
Among other revisions, FINRA is proposing to add sections on NASD IM-2210-6 (Requirements for the Use of Investment Analysis Tools), NASD Rule 2370 (Borrowing From or Lending to Customers) and NASD Rule 2790 (Restrictions on the Purchase and Sale of Initial Equity Public Offerings).
FINRA is proposing to change the title of Section 3 of the study outline from "Other Related Securities and Financial Instruments" to "Related Securities and Financial Instruments" and the title of Section 5 from "Legal Considerations" to "Securities Industry Regulations and Legal Considerations." Further, as a result of the revisions discussed above, the number of questions on each section of the study outline was modified as follows: Government Securities, decreased from 25 to 22 questions; Mortgaged-Backed Securities, no changes to the number of questions (remains at 25 questions); Related Securities and Financial Instruments, no changes to the number of questions (remains at 9 questions); Economic Activity, Government Policy and the Behavior of Interest Rates, decreased from 16 to 13 questions; Securities Industry Regulations and Legal Considerations, increased from 10 to 15 questions; and Customer Considerations, increased from 15 to 16 questions.
FINRA is proposing similar changes to the Series 72 selection specifications and question bank. The number of questions on the Series 72 examination will remain at 100, and candidates will continue to have 3 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 72 examination program are consistent with the provisions of Sections 15A(b)(6)8and 15A(g)(3) of the Act,9which authorize FINRA to prescribe standards of training, experience, and competence for persons associated with FINRA members.
Footnotes:
8 15 U.S.C. 78o-3(b)(6).
9 15 U.S.C. 78o-3(g)(3).
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 Act10and Rule 19b-4(f)(1) thereunder,11in 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 72 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-2007-32 with the Commission.
Footnotes:
10 15 U.S.C. 78s(b)(3)(A)(i).
11 17 CFR 240.19b-4(f)(1).
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 ( http://www.sec.gov/rules/sro.shtml ); or
• Send an e-mail to rule-comments@sec.gov . Please include File Number SR-FINRA-2007-032 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-2007-032. 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, 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-2007-032 and should be submitted on or before January 29, 2008.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12
Footnotes:
12 17 CFR 200.30-3(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-93 Filed 1-7-08; 8:45 am]
BILLING CODE 8011-01-P