Document ID: SEC-2007-0619-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-05-02T04:00Z

[Federal Register: May 2, 2007 (Volume 72, Number 84)]
[Notices]               
[Page 24350-24352]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02my07-112]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55670; File No. SR-NYSE-2007-41)

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Eliminate the Securities Manager Examination (``Series 12'')

April 25, 2007.
    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 April 19, 2007, the New York Stock Exchange LLC (``NYSE'' 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 substantially prepared by the 
Exchange. The Exchange 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 
pursuant to Section 19(b)(3)(A)(i) of the Act \3\ and Rule 19b-4(f)(1) 
thereunder,\4\ which 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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing this proposal to eliminate the Securities 
Manager qualification examination (``Series 12'').

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 Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the

[[Page 24351]]

proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The Exchange 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 this filing is to rescind the Series 12 examination. 
The Series 12 is owned and maintained by the NYSE and administered 
through the National Association of Securities Dealers, Inc.
    Background. NYSE Rule 342 (``Offices--Approval, Supervision and 
Control'') requires that member organizations be appropriately 
supervised. NYSE Rule 342.13 prescribes specific qualification 
standards for supervisors.\5\ It requires that a Branch Office Manager 
(``BOM'') pass the General Securities Sales Supervisor examination 
(``Series 9/10'') or another examination acceptable to the Exchange. 
The Exchange currently accepts two alternatives to the Series 9/10 
examination: The Series 12 examination and the General Securities 
Principal (``Series 24'') examination.\6\
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    \5\ See also NYSE Rule 345 (``Employees--Registration, Approval, 
Records''), which requires supervisors of registered representatives 
to be registered. In addition, NYSE Rule 345.15 requires candidates 
for registration to meet training requirements and pass a 
qualification examination.
    \6\ The Series 24 examination is only recognized by the Exchange 
if taken and passed on or after July 2, 2001. Further, unlike the 
Series 9/10 examination, which qualifies a person to supervise 
options and municipal business as well as equities business, the 
Series 24 examination only qualifies a person to supervise equities 
business. A BOM may qualify to supervise options and municipal 
securities business by passing the Registered Options Principal 
examination (``Series 4'') and the Municipal Securities Principal 
examination (``Series 53''), respectively. See also NYSE Information 
Memo 02-51 (November 12, 2002).
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    Since the Series 12 examination qualifies a candidate as a 
Securities Manager, it has generally been utilized by individuals 
employed by a broker/dealer whose business is limited solely to equity 
and non-municipal fixed income securities.
    Proposed Amendment. The Exchange is seeking to rescind the Series 
12 examination \7\ primarily because its content is now covered by the 
Series 10 examination, which is the general securities portion of the 
Series \9/10\ examination. The Series 12 consists of 100 multiple-
choice questions covering the following four general areas of 
knowledge, which are also addressed in the Series 10: Sales 
Supervision; Account Supervision; Compliance, Recordkeeping and 
Financial Responsibility; and Regulations Affecting the Operation of 
Securities Markets. The primary difference between the Series 12 and 
the Series 10 is that the Series 12 does not cover municipal 
securities. Thus, candidates seeking a BOM and/or Securities Manager 
designation may qualify via the Series 10 examination (or the Series 24 
examination) in lieu of the Series 12.
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    \7\ When originally introduced in 1964, the Series 12 was the 
standard BOM examination. The BOM examination was administered in 
this form until April 1984 when it was changed to the General 
Securities Sales Supervisor examination (``Series 8''), which was 
created from the Series 12, Series 24, Series 4 and Series 53 
examinations. The two-part Series 8 examination later split into the 
Series \9/10\ with the Web CRD conversion in August 1999. See also 
NYSE Information Memo 81-57 (December 1, 1981), which announced the 
approval of the Series 8 examination.
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    Further, few candidates take the Series 12, and the number of 
candidates taking the exam annually has declined steadily over the past 
several years. For example, in 2000, 70 candidates took the Series 12. 
By 2003, only 20 candidates took the Series 12, and only 15 candidates 
took the exam in 2006. Maintenance of an examination program is a 
labor-intensive process because an exam must be reviewed and updated 
regardless of the number of candidates taking the exam. Rescission of 
the Series 12 will enable the Exchange to better allocate its resources 
to updating and administering the Series 10 examination.
    In order to notify candidates who are currently registering or 
preparing for the Series 12 examination, the Exchange published an 
Information Memo announcing the Exchange's intention to file this 
proposed rescission with the Commission.\8\ In brief, it informed 
candidates who requested to take the Series 12 prior to April 23, 2007 
that they will be registered to do so.\9\ If, however, a candidate 
requests registration for the Series 12 on or after that date, the 
candidate will automatically be registered to take the Series 10 
examination.
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    \8\ See NYSE Information Memo 07-32 (April 11, 2007).
    \9\ Individuals wishing to take the Series 12 examination were 
instructed to make the appropriate request through the Central 
Registration Depository on or before Friday, April 20, 2007. 
Individuals who made an appropriate request by April 20, 2007 have 
120 days to take the Series 12 examination. NYSE will also continue 
to grant Securities Manager qualification to individuals who have 
passed the Series 24 on or after July 2, 2001, except for those 
individuals who supervise options or municipal securities sales 
activity. See NYSE Information Memo 02-51 (November 12, 2002).
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2. Statutory Basis
    The Exchange believes that the proposed rescission is consistent 
with the requirements of Section 6(c)(3)(B) \10\ of the Act. The 
Exchange believes, pursuant to that section, it has a responsibility to 
prescribe standards of training, experience, and competence for persons 
associated with Exchange member organizations. The Exchange notes that 
proposed rescission of the Series 12 will not result in any diminution 
of Exchange competency standards because the content of the Series 12 
is covered by the Series 10 examination, and the Exchange prospectively 
will require all candidates who would have otherwise taken the Series 
12 to take the Series 10.
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    \10\ 15 U.S.C. 78f(c)(3)(B).
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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 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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The proposed rule change is effective upon filing pursuant to 
Section 19(b)(3)(A)(i) \11\ of the Act and paragraph (f)(1) of Rule 
19b-4 thereunder,\12\ in that it constitutes a stated policy, practice, 
or interpretation with respect to the meaning, administration, or 
enforcement of an existing rule of the Exchange. At any time within 60 
days of the filing of such 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(i).
    \12\ 17 CFR 240.19b-4(f)(1).
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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:

[[Page 24352]]

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-NYSE-2007-41 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-NYSE-2007-41. 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. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the NYSE. 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 available publicly. All submissions should refer to 
File Number SR-NYSE-2007-41 and should be submitted on or before May 
23, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-8311 Filed 5-1-07; 8:45 am]

BILLING CODE 8010-01-P