[Federal Register Volume 66, Number 90 (Wednesday, May 9, 2001)]
[Notices]
[Pages 23749-23750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11638]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44248; File No. SR-NASD-2001-23]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers Regulation, Inc. Revising the General Securities 
Principal (Series 24) and Corporate Securities Limited Representative 
(Series 62) Examinations

May 3, 2001.
    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 March 27, 2001, the National Association of Securities Dealers, Inc. 
(``NASD'' or ``Association''), through its wholly owned subsidiary, 
NASD Regulation, Inc. (``NASD Regulation''), 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 NASD Regulation.\3\ NASD Regulation 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 of the self-regulatory organization 
under section 19(b)(3)(A)(i) of the Act \4\ and Rule 19b-4(f)(1),\5\ 
which renders the rule effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 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. 
Revisions to the Series 24 and Series 62 Examinations were 
originally filed with the Commission in SR-NASD-99-55. NASD 
Regulation has withdrawn SR-NASD-99-55 and refiled the revisions in 
the instant proposed rule change.
    \4\ 15 U.S.C. 78s(b)(3)(A)(i).
    \5\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    NASD Regulation is proposing revisions to the General Securities 
Principal (Series 24) and Corporate Securities Limited Representative 
(Series 62) examinations.\6\ The proposed revisions consists of general 
revisions to update the examination programs to reflect changes in the 
rules, regulations, and practices covered by the examinations. The 
proposed revisions are reflected in the question bank for the Series 24 
and 62 examinations and are available for Commission review. The text 
of the Study Outlines for the Series 24 and Series 62 examinations are 
available at NASD Regulation and at the Commission.
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    \6\ The revised examination specifications were filed with the 
Commission under separate cover pursuant to a request by NASD 
Regulation for confidential treatment. See 17 CFR 240.24b-2.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NASD Regulation 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. NASD Regulation 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
    Pursuant to section 15A(g)(3) of the Act,\7\ which requires the 
NASD to prescribe standards of training, experience, and competence for 
persons associated with NASD members, the NASD has developed 
examinations, and administers examinations developed by other self-
regulatory organizations, that are designed to establish that persons 
associated with NASD members have attained specified levels of 
competence and knowledge. NASD Regulation 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.
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    \7\ 15 U.S.C. 78o-3(g)(3).
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    The NASD's Series 24 General Securities Principal examination 
qualifies individuals to manage or supervise the member's investment 
banking or securities business for corporate securities, direct 
participation programs, and investment company products/variable 
contracts. The Series 62 Corporate Securities Limited Representative 
examination is an NASD examination that qualifies an individual as a 
representative for the sale of corporate stocks, corporate bonds, 
rights, warrants, real estate investment

[[Page 23750]]

trusts, collateralized mortgage obligations, and securities of closed-
end companies registered pursuant to the Investment Company Act of 
1940. These exams test candidates' knowledge of securities industry 
rules and regulations pertinent to the respective products listed 
above.
    The staff of the Qualifications Department of NASD Regulation, in 
conjunction with an industry committee, recently undertook a review of 
the General Securities Principal and Corporate Securities Limited 
Representative examination programs. As a result of this review, NASD 
Regulation is proposing revisions to the examination specifications, 
study outlines, and question banks for the Series 24 and Series 62 
examination programs to reflect changes to the rules and regulations 
covered by the examinations, including Commission rules relating to 
Regulation M, the Investment Advisers Act of 1940, and section 11A of 
the Act \8\ and the rules thereunder. The proposed revisions also 
reflect changes to NASD rules and regulations, as well as to the 
Municipal Securities Rulemaking Board Rules G-37 and G-38.
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    \8\ 15 U.S.C. 78k-1.
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    To adequately test the material covered in the revised programs, 
the number of questions on the Series 24 examination has increased from 
125 to 150 questions, and the number of questions on the Series 62 
examination has increased from 100 to 115 questions. The allowed 
testing time will change to 3\1/2\ hours for the Series 24 examination 
and 2\1/2\ hours for the Series 62 examination. The passing score for 
the examinations will continue to be 70 percent .\9\
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    \9\ See telephone conversation between Rebekah Liu, Special 
Counsel, SEC, Cyndi Nguyen, Attorney, SEC and Eric Moss, Office of 
General Counsel, NASD Regulation on May 3, 2001.
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2. Statutory Basis
    NASD Regulation believes that the proposed revisions are consistent 
with the provisions of sections 15A(b)(6) \10\ and 15A(g)(3) of the 
Act,\11\ which authorize the NASD to prescribe standards of training, 
experience, and competence for persons associated with NASD members.
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    \10\ 15 U.S.C. 78o-3(b)(6).
    \11\ 15 U.S.C. 78o-3(g)(3).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASD Regulation 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 \12\ and subparagraph (f)(1) of Rule 19b-4 
thereunder,\13\ in that the foregoing 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. NASD Regulation proposes to implement the 
revised Series 24 and 62 examination programs on July 2, 2001.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(i).
    \13\ 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 proposal is 
consistent with the Act. Persons making written submissions should file 
six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 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. Copies of such filing will also be available for 
inspection and copying at the principal office of the NASD. All 
submissions should refer to file number SR-NASD-2001-23 and should be 
submitted by May 30, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-11638 Filed 5-8-01; 8:45 am]
BILLING CODE 8010-01-M