Document ID: SEC-2010-0043-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; National Futures Association; Notice of Filing and Immediate Effectiveness of a Proposed Change to the Interpretive NoticeRegarding Security Futures Products Proficiency Training
Posted Date: 2010-01-11T05:00Z

[Federal Register: January 11, 2010 (Volume 75, Number 6)]
[Notices]               
[Page 1431-1432]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11ja10-94]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61284; File No. SR-NFA-2009-02]

 
Self-Regulatory Organizations; National Futures Association; 
Notice of Filing and Immediate Effectiveness of a Proposed Change to 
the Interpretive Notice Regarding Security Futures Products Proficiency 
Training

January 4, 2010.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-7 under the Act \2\ notice is hereby given 
that on December 11, 2009, National Futures Association (``NFA'') 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 self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons. NFA concurrently filed 
the proposed rule change with the Commodity Futures Trading Commission 
(``CFTC'').\3\
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    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 17 CFR 240.19b-7.
    \3\ On December 31, 2009, NFA filed an update to the proposed 
rule change to indicate that the CFTC, by letter dated December 28, 
2009, advised NFA that the CFTC had determined not to review the 
proposal and that NFA was permitted to make the proposal effective 
as of December 28, 2009.
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I. Self-Regulatory Organization's Description of the Proposed Rule 
Change

    The amendments to the Interpretive Notice titled ``NFA Compliance 
Rules 2-7 and 2-24 and Registration Rule 401: Proficiency Requirements 
for Security Futures Products'' extend the relief from having to take a 
proficiency exam to engage in security futures activities from December 
31, 2009 to December 31, 2012.
    A copy of this filing is available on the Exchange's Web site at 
http://www.nfa.futures.org, on the Commission's Web site at http://
www.sec.gov, the Exchange's principal office and at the Commission's 
Public Reference Room.

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

[[Page 1432]]

on the proposed rule change. The text of those statements may be 
examined at the places specified in Item IV below. NFA has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Section 15A(k) of the Act \4\ makes NFA a national securities 
association for the limited purpose of regulating the activities of NFA 
Members (``Members'') who are registered as brokers or dealers under 
Section 15(b)(11) of the Act.\5\
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    \4\ 15 U.S.C. 78o-3(k).
    \5\ 15 U.S.C. 78o(b)(11).
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    The Commodity Futures Modernization Act of 2000 amended the 
Securities Exchange Act of 1934 to require NFA to ``have rules that 
ensure that members and natural persons associated with members meet 
such standards of training, experience, and competence necessary to 
effect transactions in security futures products (``SFPs'') and are 
tested for their knowledge of securities and securities futures 
products.'' \6\ In 2001 NFA and FINRA (then NASD) adopted temporary 
relief allowing registrants to qualify to engage in security futures 
activities by completing a training program rather than by taking an 
exam. The relief was extended twice and is currently set to expire on 
December 31, 2009.
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    \6\ Section 15A(k)(2)(D) of the Exchange Act.
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    At its November 19, 2009 meeting, the Board approved amendments to 
the Interpretive Notice regarding proficiency requirements for security 
futures products. At that meeting, the Board also gave the Executive 
Committee authority to make any changes requested by the CFTC or the 
SEC. The CFTC and SEC have asked that the proposal adopted by the Board 
be modified and the Executive Committee has approved the modified 
proposal.
    NFA and FINRA proposed the two prior extensions, and the CFTC and 
SEC agreed to them, because of the low trading volume in SFPs and the 
relatively few registrants engaging in security futures activities. 
These characteristics continue to make the imposition of a 
qualifications exam an inefficient option today. Accordingly, the 
proposal revises the Interpretive Notice to extend the relief from 
having to take an exam from December 31, 2009 to December 31, 2012.\7\
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    \7\ FINRA recently amended its rules to incorporate the same 
three-year extension. See Securities Exchange Act Release. No. 61231 
(December 23, 2009), 74 FR 691731 (December 30, 2009) (SR-FINRA-
2009-092).
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    Amendments to the Interpretive Notice regarding Security Futures 
Products Proficiency Training were previously filed in SR-NFA-2002-04, 
SR-NFA-2003-03, SR-NFA-2006-04 and SR-NFA-2007-07.
2. Statutory Basis
    The rule change is authorized by, and consistent with, Section 
15A(k)(2)(D) of the Act.\8\ That Section requires NFA to ``have rules 
that ensure that members and natural persons associated with members 
meet such standards of training, experience, and competence necessary 
to effect transactions in SFPs and are tested for their knowledge of 
securities and securities futures products.'' Although the proposal 
extends relief from having to take an exam to engage in security 
futures activities, it still requires that training be completed before 
entering into such activities.
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    \8\ 15 U.S.C. 78o-3(k)(2)(D).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NFA does not believe that the proposed rule change will have an 
impact on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Comments on the NFA proposed rule change have not been solicited 
and none have been received.

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

    The proposed rule change will become effective on December 28, 
2009. At any time within 60 days of the date of effectiveness of the 
proposed rule change, the Commission, after consultation with the CFTC, 
may summarily abrogate the proposed rule change and require that the 
proposed rule change be refilled in accordance with the provisions of 
Section 19(b)(1) of the Act.\9\
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    \9\ 15 U.S.C. 78s(b)(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:

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-NFA-2009-02 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NFA-2009-02. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. 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-NFA-2009-02 and should be 
submitted on or before February 1, 2010.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-238 Filed 1-8-10; 8:45 am]
BILLING CODE 8011-01-P