Document ID: SEC-2005-0392-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2005-12-15T05:00Z

[Federal Register: December 15, 2005 (Volume 70, Number 240)]
[Notices]               
[Page 74382-74384]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de05-101]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52912; File No. SR-Amex-2005-120]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto Relating to Revisions to the Series 4 
Examination Program

December 7, 2005.
    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 November 21, 2005, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') 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 Amex. On 
November 23, 2005, Amex filed

[[Page 74383]]

Amendment No. 1 to the proposed rule change. Amex 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 
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, as amended, 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

    Amex is filing revisions to the study outline and selection 
specifications for the Limited Principal--Registered Options (Series 4) 
examination program (``Series 4 Examination''). The proposed revisions 
update the material to reflect changes to the laws, rules, and 
regulations covered by the Series 4 Examination, as well as modify the 
content of the Series 4 Examination to track more closely the 
functional workflow of a Series 4 limited principal. The revisions that 
Amex is submitting with this filing supersede all prior revisions to 
the Series 4 Examination submitted by Amex.
    The revised study outline is available on the National Association 
of Securities Dealers, Inc.'s (``NASD'') Web site (http://www.nasd.com
), at Amex, and at the Commission. However, Amex has 

omitted the Series 4 Examination selection specifications from this 
filing and has submitted the specifications under separate cover to the 
Commission with a request for confidential treatment pursuant to Rule 
24b-2 under the Act.\5\
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    \5\ 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, Amex 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. Amex 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
    Amex Rule 920 states that a member organization shall not transact 
any business with the public in option contracts unless those persons 
engaged in the management of the member organization's business 
pertaining to option contracts are registered with and approved by the 
Exchange as Options Principals. Additionally, no individual member 
shall transact any business directly with the public in option 
contracts unless he is registered with and approved by the Exchange as 
an Options Principal. The Series 4 Examination tests a candidate's 
knowledge of options trading generally, the Amex rules applicable to 
the trading of option contracts, and the rules of registered clearing 
agencies for options. The Series 4 Examination covers, among other 
things, equity options, foreign currency options, index options, and 
options on government and mortgage-backed securities.
    The Series 4 Examination is shared by Amex and the following SROs: 
The NASD, the Chicago Board Options Exchange, Inc., the New York Stock 
Exchange, Inc., the Pacific Exchange, Inc., and the Philadelphia Stock 
Exchange, Inc.
    A committee of industry representatives, together with the staff of 
Amex and the SROs, recently undertook a periodic review of the Series 4 
Examination. As a result of this review and as part of an ongoing 
effort to align the examination more closely to the supervisory duties 
of a Series 4 limited principal, Amex is proposing to modify the 
content of the Series 4 Examination to track the functional workflow of 
a Series 4 limited principal. More specifically, Amex is proposing to 
revise the main section headings and the number of questions on each 
section of the Series 4 Examination study outline as follows: Options 
Investment Strategies, decreased from 35 to 34 questions; Supervision 
of Sales Activities and Trading Practices, increased from 71 to 75 
questions; and Supervision of Employees, Business Conduct, and 
Recordkeeping and Reporting Requirements, decreased from 19 to 16 
questions. Amex is further proposing revisions to the Series 4 
Examination study outline to reflect the SEC short sale requirements. 
The revised Series 4 Examination continues to cover the areas of 
knowledge required to supervise options activities.
    Amex is proposing these changes to the entire content of the Series 
4 Examination, including the selection specifications and question 
bank. The number of questions on the Series 4 Examination will remain 
at 125, and candidates will continue to have three hours to complete 
the exam. Also, each question will continue to count one point, and 
each candidate must correctly answer 70 percent of the questions to 
receive a passing grade.
    On April 8, 2005, Amex filed with the Commission for immediate 
effectiveness similar revisions to the Series 4 Examination.\6\ NASD 
originally had proposed to implement the revised Series 4 Examination 
by April 29, 2005.\7\ However, due to administrative issues, NASD 
delayed the implementation date of the revisions until no later than 
November 30, 2005 and Amex filed with the Commission for immediate 
effectiveness a proposed rule change delaying the implementation date 
until such time.\8\ In the interim, the SROs that share the Series 4 
Examination recommended additional revisions to the Series 4 
Examination. These additional revisions are reflected in the 
examination material that Amex is submitting with this filing. As noted 
below, NASD has filed with the Commission similar proposed rule change 
reflecting the revisions to the Series 4 Examination \9\ and Amex 
understands that the other SROs will file similar proposed rule 
changes.
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    \6\ See Securities Exchange Act Release No. 51689 (May 12, 
2005), 70 FR 28965 (May 19, 2005) (SR-Amex-2005-039).
    \7\ See Securities Exchange Act Release No. 51216 (February 16, 
2005), 70 FR 8866 (February 23, 2005) (SR-NASD-2005-025).
    \8\ See Securities Exchange Act Release No. 51690 (May 12, 
2005), 70 FR 28967 (May 19, 2005) (SR-Amex-2005-045).
    \9\ See Securities Exchange Act Release No. 52546 (September 30, 
2005), 70 FR 59109 (October 11, 2005) (SR-NASD-2005-109).
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2. Statutory Basis
    Amex believes that the proposed rule change is consistent with 
Section 6 of the Act \10\ in general and furthers the objectives of 
Section 6(c)(3) \11\ which authorizes Amex to prescribe standards of 
training, experience and competence for persons associated with Amex 
members.
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    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(c)(3).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change, as amended, does not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.

[[Page 74384]]

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

    The proposed rule change, as amended, has become effective pursuant 
to Section 19(b)(3)(A)(i) of the Act \12\ and Rule 19b-4(f)(1) 
thereunder,\13\ in that the proposed rule change constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule of Amex. While the 
Series 4 Examination is co-owned by certain SROs, the NASD administers 
the Series 4 Examination. Amex will announce the implementation date in 
a Notice to Members to be published no later than 60 days after SEC 
Notice of this filing.
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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.\14\
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    \14\ The effective date of the original proposed rule is 
November 21, 2005. The effective date of Amendment No. 1 is November 
23, 2005. For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on November 23, 2005, the date on which Amex submitted 
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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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, as amended, is consistent with the Act. Comments may be 
submitted by any of the following methods:

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-Amex-2005-120 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-Amex- 2005-120. 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 Amex. 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-Amex-2005-120 and should be submitted on or before 
January 5, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-7365 Filed 12-14-05; 8:45 am]

BILLING CODE 8010-01-P