Federal Register / Vol. 62, No. 170 / Wednesday, September 3, 1997 / Notices 46535

1 15 U.S.C. § 78s(b)(1) (1994).

2On July 1, the NASD submitted a technical

amendment. Technical amendments do not need to

be published in the Federal Register. Letter from

Craig L. Landauer, Associate General Counsel,

NASD, to Karl J. Varner, Esq., SEC, dated July 1,

1997.

3Securities Exchange Act Release No. 38566 (May

1, 1997), 62 FR 25683 (May 9, 1997).

4 17 CFR 200.30–3(a)(12)(1997).

1 15 U.S.C. § 78s(b)(1)(1994).

2 17 CFR 240.19b-4(1997).

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–23261 Filed 9–2–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–38969; File No. SR–NASD–

97–23]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change by

National Association of Securities

Dealers, Inc. Relating to Registration

Category, Study Outline and

Specification for Series 72

Examination, Government Securities

Representative

August 25, 1997.

On April 11, 1997, the NASD

Regulation, Inc. (‘‘NASD Regulation’’)

filed with the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

the proposed rule change pursuant to

Section 19(b)(1) of the Securities

Exchange Act of 1934 (‘‘Act’’) 1 to create

a new category of representative

registration, the Government Securities

Representative (Series 72), and to

conform the registration requirements of

the existing Registered Options

Representative (Series 42) category to

take into consideration this new

category.2 Notice of the proposed rule

change, together with the substance of

the proposal, was published in the

Federal Register.3 No comment letters

were received. This order approves the

proposed rule change.

I. Background

The Government Securities Act of

1986 (‘‘1986 Act’’), an amendment to the

Act, required sole government securities

broker-dealers to register with the SEC

for the first time. The 1986 Act also

granted the NASD authority to require

associated persons of such firms to

register with the NASD. However, the

1986 Act did not allow the NASD to

apply its qualification examination

standards to associated persons of

government securities broker-dealers.

Since January 1989, such associated

persons have been required to register as

Government Securities Representatives

or Government Securities Principals,

but have not been required to pass a

qualification examination. Under a 1993

amendment to the Act, the NASD was

given authority to apply its qualification

standards to Government Securities

Representatives and Government

Securities Principals.

The proposed rule change will

establish an examination qualification

requirement for government securities

representatives. A person may qualify to

sell government securities by passing

the existing Series 7 examination or the

new Series 72 examination. The

proposed rule change replaces current

Rule 1112, which was adopted in 1989.

NASD Regulation has determined to

permit persons who have been

registered with the NASD as a

government securities representative for

two years prior to the effective date of

the rule will not have to take the

examination unless they are subject to a

statutory disqualification as defined in

Section 3(a)(39) of the Act or in the last

years have been subject to a suspension

or fine of $5,000 or more imposed by a

securities or commodities regulator.

Currently, individuals who sell OTC

options on government securities are

not required to pass a qualification

examination. The proposed rule change

also will amend Rule 1032(d) for

Registered Options Representatives to

establish registration and qualification

requirements for such individuals, and

to add the Series 72 Examination to the

list of the those examinations which

prequalify an individual to take the

Limited Representative—Options

(Series 42) Examination. A person

selling OTC options on government

securities would be required to pass the

new Series 72 examination and the

existing Series 42 examination.

The Series 72 examination will

consist of one hundred (100) questions.

Candidates will have three hours to

complete the examination. The passing

score for the examination will be 70%.

The NASD will not begin using the

examination until September of 1997.

II. Discussion

The Commission believes that the

proposed rule change is consistent with

the provisions of Sections 15A(b)(6) and

15A(g)(3) of the Act in that the NASD

is required to prescribe standards of

training, experience and competence for

persons associated with NASD

members. Pursuant to this statutory

obligation, the NASD develops and

administers examinations to establish

that persons associated with NASD

members have attained specified levels

of competence and knowledge.

Pursuant to this statutory obligation,

NASD Regulation administers

examinations developed by NASD

Regulation and other self-regulatory

organizations Section 15A(g)(3) of the

Act to prescribe standards of training,

experience and competence for persons

associated with NASD members.

The proposed rule change is

consistent with the format of the other

NASD limited registration categories.

This proposed rule change will change

the language of Rule 1032(d) Registered

Option Representative so that it is

similar to the language used in the other

registration categories in Rule 1032.

This provision is consistent with

previous practice in permitting persons

who have achieved a certain level of

experience in a segment of the securities

industry to be ‘‘grandfathered’’ if a new

qualification examination is adopted for

that particular industry segment.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act, that the

proposed rule change, SR–NASD–97–

23, be, and hereby is, approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–23259 Filed 9–2–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–38975; File No. SR–NASD–

97–59]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

National Association of Securities

Dealers, Inc. Relating to the Short Sale

Rule

August 26, 1997.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’) 1 and Rule 19b-4 2 thereunder,

notice is hereby given that on August

14, 1997, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’) filed with the Securities

and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change as described in Items I, II,

and III below, which Items have been

prepared by the NASD. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.