10886 Federal Register / Vol. 60, No. 39 / Tuesday, February 28, 1995 / Notices

10 15 U.S.C. 78s(b)(2) (1988).

11 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. Section 78s(b)(1).

2The proposed rule change was originally filed

on January 26, 1995. In the amendment, filed on

February 13, 1995, the NASD provided both the

amended examination specifications and content

outline for the Series 7 exam. The examination

specifications were filed pursuant to a request by

the NASD for confidential treatment.

3OEX CAPS and SPX CAPS are new securities

based on the S&P 100 (OEX) and the S&P 500 (SPX)

that give investors the right to participate to a

predetermined level in upward or downward

movements in either index.

4See Securities Exchange Act Release No. 34853

(October 18, 1994), 59 FR 53694 (October 25, 1994)

(File Nos. SR–NYSE–94–26 (revised exam and exam

specifications for Series 7 exam), and SR–NYSE–

94–27 (revised content outline for Series 7 exam)).

rights of members from whom the

Exchange requests information pursuant

to CBOE Rule 15.9(b). Accordingly, the

Commission believes it is consistent

with Sections 6(b)(5) and 19(b)(2) of the

Act to approve Amendment No. 1 to the

proposed rule change on an accelerated

basis.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,10 that the

proposed rule change (SR–CBOE–94–

39) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–4858 Filed 2–27–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35401; File No. SR–NASD–

95–04]

Self-Regulatory Organizations;

National Association of Securities

Dealers, Inc.; Notice of Filing and

Order Granting Accelerated Approval

of Proposed Rule Change Relating to

Amendments to the Examination

Specifications and Content Outline for

the General Securities Registered

Representative (Series 7) Examination

February 22, 1995.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

February 13, 1995,2 the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) 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 the NASD. 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 NASD is proposing amendments

to the examination specifications and

study outline for the General Securities

Registered Representative (‘‘Series 7’’)

qualification examination. The

amendments revise materials pertaining

to recently enacted federal and selfregulatory organization (‘‘SRO’’) rules

and regulations, new products and

changes in industry practices. The

number of questions per examination

and the examination time are unaffected

by the amendments.

The amendments described above do

not result in any textual changes to the

NASD By-Laws, Schedules to the ByLaws, Rules, practices or procedures.

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

NASD 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 III below. The NASD 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

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 required under rules of

the 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 exam specifications detail the

ares covered by the examination and

break down the number of examination

questions drawn from each area. The

Series 7 content outline details the

subject coverage and question allocation

of the examination.

Revision of the Series 7 examination,

specifications and content outline was

initiated in April 1993 by an industry

committee of self-regulatory

organizations and broker-dealer

representatives 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 the registered

representative as firms offer an

increasingly wide range of financial

services. The specifications and content

outline for the Series 7 examination

have 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 examination. The total number of

questions in the Series 7 examination

will remain 250. The revised

examination will cover all financial

product areas covered on the present

Series 7 examination as well as several

new products, including collateralized

mortgage obligations (‘‘CMOs’’), long

term equity participation securities

(‘‘LEAPS’’) and CAPS,3 with reduced

emphasis on direct participation

programs.

The Commission recently approved

two parallel filings of the New York

Stock Exchange (‘‘NYSE’’).4 No

comments were received on either

filing.

The NASD believes that the proposed

rule change is consistent with the

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

Act in that the proposed changes to the

examination are to ensure persons

seeking registration in the securities

industry have attained the requisite

levels of knowledge and competence.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The NASD 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, as amended.

(C) Self-Regulatory Organization’s

Statement on Comments of the

Proposed Rule Change Received From

Members, Participants, or Others

Written comments were neither

solicited nor received.

III. 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
Federal Register / Vol. 60, No. 39 / Tuesday, February 28, 1995 / Notices 10887

5 15 U.S.C. Sections 78o(b)(7), 78o–3(b)(6), 78o–

3(g)(3).

6See note 4, supra.

7 15 U.S.C. Section 78s(b)(2).

8 17 CFR 200.30–3(a)(12).

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–95–04 and should be

submitted by March 21, 1995.

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to the NASD and, in

particular, with the requirements of

Sections 15(b)(7), 15A(b)(6), and

15A(g)(3) of the Act.5 Section 15(b)(7)

states that a registered broker or dealer

may not effect any transaction in, or

induce the purchase or sale of, any

security unless such broker or dealer

meets such standards of operational

capability and all those associated with

such broker or dealer meet certain

standards of training, experience,

competence, and such other

qualifications as the Commission finds

necessary or appropriate in the public

interest or for the protection of

investors. Section 15A(b)(6) requires, in

relevant part, that the rules of a

registered securities association be

designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, and to protect investors and the

public interest. Section 15A(g)(3)

provides that a registered securities

association may deny membership to, or

condition the membership of, a

registered broker or dealer if such broker

or dealer does not meet the requisite

levels of knowledge and competence.

The Commission believes that

revising the Series 7 exam,

specifications, and content outline

should help to ensure that only those

securities representatives with a

comprehensive knowledge of current

NASD rules, as well as an

understanding of the Act, will be able to

solicit, purchase or sell securities for the

accounts of customers. The Commission

believes that the revised topics covered

by the Series 7 examination,

specifications and content outline are

appropriate and include a sufficiently

broad range of subject matter to ensure

an appropriate level of expertise by

general securities registered

representatives. The revised

examination focuses on relevant subject

matter in view of changes in applicable

laws, rules, regulations, products, and

industry practices. By ensuring this

requisite level of knowledge, the

Commission anticipates that general

securities registered representatives will

demonstrate an acceptable level of

securities knowledge to carry out their

responsibilities.

The Commission finds good cause for

approving the proposed rule change

prior to the 30th day after the date of

publication of notice of filing thereof in

the Federal Register. The Commission

believes that accelerated approval is

appropriate given the recent approval of

two parallel and substantively identical

filings by the NYSE,6 and the

importance of industry-wide

implementation of the revised content

outline and Series 7 examination as

soon as practicable.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,7 that the

proposed rule change SR–NASD–95–04

be, and hereby is, approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–4798 Filed 2–27–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35400; SR–PHLX–95–01]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Relating to the Listing and Trading of

DIVS, ZIPS and SPECS

February 21, 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 January 5, 1995,

the Philadelphia Stock Exchange Inc.

(‘‘PHLX’’), 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 PHLX, pursuant to Rule 19b–4 of

the Act, hereby proposes to list for

trading ‘‘DIVS’’ (Dividend Value of

Stock), ‘‘ZIPS’’ (Zero Income Principal

of Stock) and ‘‘SPECS’’ (Speculative

Equity Component Stock) (collectively

hereinafter referred to as the

‘‘Products’’), which are new hybrid

options developed by Americus Stock

Process Corp. (‘‘ASPC’’).

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

The PHLX proposes to list a new

product developed by and licensed to

the PHLX by ASPC that allows the

purchase or sale of any of three

economic interests inherent in a share of

common stock. Each of these new

instruments, called DIVS, ZIPS and

SPECS, will be traded separately on the

PHLX’s equity options floor. The

Exchange believes that the Products,

combined, will have all the

characteristics of a share of the

underlying common stock, including

voting rights, and that the ability to

trade the Products as separate

component instruments will provide

new hedge, arbitrage, speculation and

investment opportunities.

The Products will be regulated, except

as described herein, by the rules

governing standardized options.

Position limits of 1 million DIVS, ZIPS

and SPECS respectively shall be

established respecting any particular

stock. See Rule 1001C. The sales

practice rules applicable to options

(Rules 1024 through 1029) will also be

applicable to sales of DIVS, ZIPS and

SPECS. (See Rule 1000C(a)). The