Document ID: SEC-2009-1124-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt the Selection Specifications and Study Outline for the Limited Representative-Investment Banking ("Series 79") Examination Program
Posted Date: 2009-08-10T04:00Z

[Federal Register: August 10, 2009 (Volume 74, Number 152)]
[Notices]               
[Page 39984-39986]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10au09-69]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60424; File No. SR-FINRA-2009-049]

 
Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Adopt the Selection Specifications and Study 
Outline for the Limited Representative--Investment Banking (``Series 
79'') Examination Program

August 4, 2009.
    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 July 28, 2009, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') 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 FINRA. FINRA has 
designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under 
the Act,\3\ which renders the proposal effective upon receipt of this 
filing by 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\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to adopt the selection specifications and 
content outline for the Limited Representative--Investment Banking 
(``Series 79'') Examination program.\4\
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    \4\ Based upon instruction from the Commission staff, FINRA is 
submitting SR-FINRA-2009-049 for immediate effectiveness pursuant to 
Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder, and 
is not filing the question bank for Commission review. See Letter 
from Belinda Blaine, Associate Director, Division of Market 
Regulation, SEC, to Alden S. Adkins, Senior Vice President and 
General Counsel, NASD Regulation, dated July 24, 2000. The question 
bank is available for Commission review.
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    The Series 79 examination program is proposed in connection with 
NASD Rule 1032(i), a new limited representative registration category 
for persons whose activities are limited to investment banking and 
principals who supervise such activities.\5\ FINRA is not proposing any 
textual changes to its By-Laws, Schedules to the By-Laws or rules.
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    \5\ FINRA will announce the effective date of NASD Rules 
1022(a)(1)(B) and 1032(i) in the same Regulatory Notice that will 
announce the implementation date of the proposed rule change, and 
those two dates will be the same.
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    A description of the Series 79 examination is included in the 
attached content outline.\6\ Additional information on the examination 
is included in the Series 79 selection specifications, which FINRA has 
submitted under separate cover with a request for confidential 
treatment to the Commission's Secretary pursuant to Rule 24b-2 under 
the Act.\7\
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    \6\ The Commission notes that the content outline is attached to 
the proposed rule change though not to this notice.
    \7\ 17 CFR 240.24b-2.
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    The text of the proposed rule change is available on FINRA's Web 
site at http://www.finra.org, at the principal office of FINRA 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, FINRA 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

[[Page 39985]]

in Item IV below. FINRA 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
    On April 13, 2009, the Commission approved NASD Rule 1032(i), which 
establishes a new limited representative category--Limited 
Representative-Investment Banking--for persons whose activities are 
limited to investment banking and principals who supervise such 
persons.\8\ More specifically, the registration category encompasses 
those associated persons whose activities involve: (1) Advising on or 
facilitating debt or equity securities offerings through a private 
placement or a public offering, including but not limited to 
origination, underwriting, marketing, structuring, syndication, and 
pricing of such securities and managing the allocation and 
stabilization activities of such offerings, or (2) advising on or 
facilitating mergers and acquisitions, tender offers, financial 
restructurings, asset sales, divestitures or other corporate 
reorganizations or business combination transactions, including but not 
limited to rendering a fairness, solvency or similar opinion.
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    \8\ See Securities Exchange Act Release No. 59757 (April 13, 
2009), 74 FR 18268 (April 21, 2009) (Order Approving File No. SR-
FINRA-2009-006).
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    Pursuant to Section 15A(g)(3)(B) of the Act,\9\ FINRA is authorized 
to prescribe standards of training, experience, and competence for 
persons associated with FINRA members. The Series 79 examination 
program has been developed to ensure that persons associated with FINRA 
members seeking to register as investment banking representatives have 
attained specified levels of competence and knowledge.
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    \9\ 15 U.S.C. 78o-3(g)(3)(B).
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    Within the six-month period following the implementation of Rule 
1032(i), individuals who are registered as a General Securities 
Representative and function in a member's investment banking business 
line as described in Rule 1032(i), or act as principals supervising 
such persons, may opt in to the Limited Representative-Investment 
Banking registration category. After the six-month opt-in period, 
individuals who perform the job functions set out in Rule 1032(i) will 
be required to pass the Series 79 exam in lieu of the General 
Securities Representative (``Series 7'') exam (or equivalent exams), 
unless subject to an exception in the Rule. Any person whose activities 
go beyond those specified in Rule 1032(i) will be required to 
separately qualify and register in the appropriate category or 
categories of registration attendant to such activities. The 
registration category does not cover individuals whose investment 
banking work is limited to public (municipal) finance or direct 
participation programs as defined in NASD Rule 1022(e)(2). Moreover, 
individuals who are currently registered as a Limited Representative--
Private Securities Offerings may continue to function in such capacity, 
so long as their investment banking activities remain limited to 
effecting private securities offerings as defined in NASD Rule 
1032(h)(1)(A). Similarly, individuals who in the future wish to engage 
in investment banking activities limited to effecting such private 
securities offerings may opt to register as a Limited Representative--
Private Securities Offerings and pass the corresponding Series 82 exam 
in lieu of the Series 79 exam.
    The qualification exam consists of 175 multiple-choice 
questions.\10\ Candidates will be allowed 300 minutes to complete the 
exam. Candidates will be given an informational breakdown of their 
performance on each section, along with their overall score and pass/
fail status at the completion of the exam session.
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    \10\ To ensure that new exam questions meet acceptable testing 
standards prior to use, each examination includes 10 additional, 
unidentified ``pre-test'' questions that do not contribute towards 
the candidate's score. Therefore, the exam actually consists of 185 
questions, 175 of which are scored. The 10 pre-test questions are 
randomly distributed throughout the examination.
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    A content outline has been prepared to assist member firms in 
preparing candidates for the Investment Banking Professional 
Qualification Examination and is available at http://www.finra.org/
brokerqualifications/registeredrep. The content outline describes the 
following four topical sections comprising the examination: (1) 
Collection, Analysis and Evaluation of Data (75 questions); (2) 
Underwriting/New Financing Transactions, Types of Offerings and 
Registration of Securities (43 questions); (3) Mergers and 
Acquisitions, Tender Offers and Financial Restructuring Transactions 
(34 questions); and (4) General Securities Industry Regulations (23 
questions).
    The selection specifications for the Series 79 examination, which 
FINRA has submitted under separate cover with a request for 
confidential treatment to the Commission's Secretary pursuant to Rule 
24b-2 under the Act,\11\ describe additional confidential information 
regarding the examination.
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    \11\ 17 CFR 240.24b-2.
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    FINRA has filed the proposed rule change for immediate 
effectiveness. FINRA will announce the implementation date of the 
proposed rule change in a Regulatory Notice to be issued within 60 days 
of the date of effectiveness of the proposed rule change.
2. Statutory Basis
    FINRA believes that the proposed Series 79 examination program is 
consistent with Section 15A(b)(6),\12\ which requires, among other 
things, that FINRA rules be designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade and, in general, to protect investors and the 
public interest and Section 15A(g)(3) of the Act,\13\ which authorize 
[sic] FINRA to prescribe standards of training, experience, and 
competence for persons associated with FINRA members. FINRA believes 
the proposed rule change would provide for a more targeted assessment 
of the competency of investment banking personnel to perform their 
unique job functions and, as a result, provide investors better 
protection.
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    \12\ 15 U.S.C. 78o-3(b)(6).
    \13\ 15 U.S.C. 78o-3(g)(3).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA 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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section

[[Page 39986]]

19(b)(3)(A) of the Act\14\ and Rule 19b-4(f)(6) thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires that a self-regulatory organization submit to the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as designated by the 
Commission. The Commission notes that FINRA satisfied the five-day 
pre-filing notice requirement.
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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 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-FINRA-2009-049 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-FINRA-2009-049. 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 such filing also will be available for 
inspection and copying at the principal office of FINRA. 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-FINRA-2009-049 and should be 
submitted on or before August 31, 2009.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-19034 Filed 8-7-09; 8:45 am]

BILLING CODE 8010-01-P