Federal Register / Vol. 60, No. 102 / Friday, May 26, 1995 / Notices 28003

purchase security XYZ and requests that its total

costs not exceed $10 per share, and the customer

is informed that the market maker charges a markup

of 1⁄4, then a market maker may continue to

purchase for its own account at $10 without also

executing the customer order. The customer order

would be deemed a limit order at $93⁄4. The

Commission emphasizes that ‘‘the price at which

the limit order is to be protected must be clearly

explained to the customer.’’ See id.

Finally, the Commission believes that

the rule change does not impose any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act. As noted

above, Herzog asserted that the rule

change will have a disparate impact

upon wholesale firms, because such

firms allegedly lack the ability of

vertically integrated firms to directly

charge customers higher commissions,

markups or other fees to compensate for

the loss of spread income. The

Commission recognizes that as a

consequence of the rule change, some

wholesale firms may seek to establish

alternative sources of revenue,

including charging commissions. The

Commission believes that any burden

imposed by shifts in fee structures is

outweighed by the improved price

discovery, execution and pricing

advantages that customers will realize

as a result of the rule change. In

addition more customers will be

accorded treatment that satisfies

reasonable expectations of fairness and

investor protection.

V. Conclusion

For the foregoing reasons, the

Commission finds that the proposed

rule change is consistent with the Act

and the rules and regulations

thereunder applicable to the NASD and,

in particular, Sections 15A(b)(6), and

15A(b)(9) and 11A(a)(1)(C) of the Act.

It is therefore ordered, pursuant to

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

proposed rule change SR–NASD–94–62

be, and hereby is, approved, effective

June 21, 1994.

By the Commission.

Jonathan G. Katz,

Secretary.

[FR Doc. 95–12987 Filed 5–25–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35745; File No. SR–CBOE–

95–26]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange,

Incorporated Relating to the Content

Outline for the General Securities

Sales Supervisor (Series 8)

Examination

May 19, 1995.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on May 12, 1995, the

Chicago Board Options Exchange,

Incorporated (‘‘CBOE’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I, II, and III below, which Items

have been prepared by the selfregulatory organization. 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

The CBOE proposes to use a revised

Content Outline for the General

Securities Sales Supervisor (Series 8)

Examination (‘‘Series 8’’).

The text of the proposed rule change

is available at the CBOE and the

Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

self-regulatory organization 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.

The self-regulatory organization 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

The Series 8 examination is an

industry-wide qualification examination

for securities sales supervisors. The

Series 8 examination is generally

required under rules of the selfregulatory organizations (‘‘SROs’’) for

persons who are engaged in the

supervision of general securities branch

offices (i.e., branch office managers) and

of general securities registered

representatives. The Series 8

examination tests a candidate’s

knowledge of securities industry rules

and regulations and certain statutory

provisions applicable to general

securities sales supervision. The Series

8 Content Outline details the subject

coverage and question allocation of the

examination.

Revision of the Series 8 examination

and Content Outline was recently

undertaken by an industry committee

composed of representatives from SROs

(the New York Stock Exchange, the

American Stock Exchange, the Chicago

Board Options Exchange, the Municipal

Securities Rulemaking Board, the

National Association of Securities

Dealers, and the Philadelphia Stock

Exchange) and representatives from

broker-dealers, including branch office

managers, compliance personnel, and

corporate executives, in order to update

the examination in view of changes in

relevant laws, rules, and regulations, the

development of new products, and to

reflect various changes in industry

practices. The committee reviewed the

examination specifications, content

areas, and item bank and developed

some new questions in new areas.

The revised examination continues to

cover the areas of knowledge required to

supervise sales activities in securities.

However, the focus of the content of the

examination has been shifted to

concentrate more closely on supervisory

duties. Accordingly, certain questions

have been deleted from the examination

that deal with routine calculations and

basic product knowledge, and questions

on new federal and SRO rules and

regulations have been incorporated into

the examination, as well as questions on

new products, supervision, and changes

in industry practices. The Content

Outline reflects the revised content of

the examination. The examination will

remain a six-hour, two-part, 200

question examination.

2. Statutory Basis

The statutory basis for the Series 8

examination lies in Section 6(c)(3)(B) of

the Act. Under that Section, it is the

Exchange’s responsibility to prescribe

standards of training, experience, and

competence for persons associated with

Exchange members and member

organizations. Pursuant to this statutory

obligation, the Exchange has developed

examinations that are administered to

establish that persons associated with

Exchange members and member

organizations have attained specific

levels of competence and knowledge.
28004 Federal Register / Vol. 60, No. 102 / Friday, May 26, 1995 / Notices

1The proposed rule change is identical to the rule

change previously approved by the Commission for

the New York Stock Exchange, Inc. and the

National Association of Securities Dealers. See

Securities Exchange Act Release No. 34967 (Nov.

10, 1994), 59 FR 59803 (Nov. 18, 1994) (File Nos.

SR–NYSE–94–23; SR–NYSE–94–24); Securities

Exchange Act Release No. 35208 (Jan. 10, 1995), 60

FR 3688 (Jan. 18, 1995) (File No. SR–NASD–94–66).

1SROs on the committee include the New York

Stock Exchange, American Stock Exchange, Chicago

Board Options Exchange, Municipal Securities

Rulemaking Board, National Association of

Securities Dealers, and Philadelphia Stock

Exchange. Broker-dealer representatives include

branch office managers, compliance officers,

training personnel, and registered representatives.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants or Others

No written comments were solicited

or received with respect to the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Because the foregoing proposed rule

change: (1) Does not significantly affect

the protection of investors or the public

interest; (2) does not impose any

significant burden on competition; and

(3) does not become operative for 30

days from May 12, 1995, the date on

which it was filed, and the Exchange

provided the Commission with written

notice of its intent to file the proposed

rule change at least five days prior to the

filing date, it has become effective

pursuant to Section 19(b)(3)(A) of the

Act and Rule 19b–4(e)(6) thereunder.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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549. 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 at

the Commission’s Public Reference

Section, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the Exchange. All submissions

should refer to File No. SR–CBOE–95–

26 and should be submitted by June 16,

1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 95–12985 Filed 5–25–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35743; File No. SR–CBOE–

95–24]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange,

Incorporated Relating to the Content

Outline for the General Securities

Registered Representative (Series 7)

Examination

May 19, 1995.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on May 12, 1995, the

Chicago Board Options Exchange,

Incorporated (‘‘CBOE’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I, II, and III below, which Items

have been prepared by the selfregulatory organization. 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

The CBOE proposes to use a revised

Content Outline for the General

Securities Registered Representative

(Series 7) Examination (‘‘Series 7’’).

The text of the proposed rule change

is available at the CBOE and the

Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

self-regulatory organization 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.

The self-regulatory organization 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

The purpose of the proposed rule

change is to revise and update the

Content Outline for the Series 7

examination. The Series 7 examination

was created in 1974 as an industry-wide

qualification examination for persons

seeking registration as general securities

representatives. The Series 7

examination is generally required under

rules of the self-regulatory organizations

(‘‘SROs’’) for persons who are engaged

in the solicitation, purchase, and/or sale

of securities for the accounts of

customers. The purpose of the Series 7

examination is to ensure that registered

representatives have the basic

knowledge necessary to perform their

functions and responsibilities. The

Series 7 Content Outline details the

subject coverage and questions

allocation of the Series 7 examination.

Revision of the Series 7 examination

and Content Outline was initiated in

April 1993 by an industry committee of

SROs and broker-dealers

representatives 1 in order to update the

examination in view of changes in the

securities industry, including changes

in relevant rules and regulations, the

development of new securities products,

and changes in the job of registered

representatives as firms offer an

increasingly wide range of financial

services. The Content Outline for the

Series 7 examination has not been

revised since 1986.

The industry committee updated the

existing statements of the critical

functions of registered representatives to

ensure current relevance and

appropriateness, drafted statements of

tasks expected to be performed by entrylevel registered representatives, and

conformed the existing Content Outline

to the task statements. The Content

Outline reflects the revised content of

the Series 7 examination. Under the

proposed rule change, the total number