Document ID: SEC-2006-1379-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2006-10-25T04:00Z

[Federal Register: October 25, 2006 (Volume 71, Number 206)]
[Notices]               
[Page 62498-62499]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25oc06-103]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54617; File No. SR-NASD-2006-118]

 
Self-Regulatory Organizations: National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Extend the Date by Which Eligible Registrants Must 
Complete Firm-Element Continuing Education To Qualify To Engage in a 
Security Futures Business

October 17, 2006.
    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 October 16, 2006, the National Association of Securities Dealers, 
Inc. (``NASD'') 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 NASD. 
NASD filed the proposed rule change pursuant to paragraph (f)(6) of 
Rule 19b-4 under the Act,\3\ which renders the proposal effective upon 
filing with the Commission.\4\ 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).
    \4\ NASD gave the Commission written notice of its intention to 
file the proposed rule change on October 10, 2006.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASD proposes to amend NASD Rule 1022 (Categories of Principal 
Registration) and NASD Rule 1032 (Categories of Registered 
Representatives) to extend to December 31, 2009 the date by which 
eligible registrants must complete a firm-element continuing education 
to qualify to engage in a security futures business. Below is the text 
of the proposed rule change. The text of the proposed rule change is 
available at the Commission's Public Reference Room, at NASD, and at 
http://www.nasd.com.

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

    In its filing with the Commission, 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 IV below. 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

1. Purpose
    In 2003, NASD modified the following registration categories to 
include the activities of engaging in and supervising securities 
futures: (1) Registered Options and Security Futures Principal (the 
Series 4); (2) Limited Principal--General Securities Sales Supervisor 
(Series 9/10); (3) General Securities Representative (Series 7), and 
(4) Limited Representative--Options and Security Futures Series (Series 
42). NASD also required that persons currently registered or becoming 
registered in these categories complete a firm-element continuing 
education requirement addressing security futures before they conducted 
any security futures business. NASD instituted this continuing 
education requirement to ensure that registered personnel, who may not 
be familiar with risks, trading characteristics, terms and nomenclature 
of these products, or the fact that they are subject to the joint 
jurisdiction of the SEC and the Commodity Futures Trading Commission, 
receive the necessary training.
    NASD initially considered replacing the firm-element continuing 
education requirement with revised qualification examinations for these 
categories that addressed security futures. However, there are no 
revision plans at present. Accordingly, NASD intends to continue to 
require eligible registrants to complete the mandated continuing 
education requirement before engaging in any security futures business. 
Thus, NASD proposes to amend NASD Rule 1022 (Categories of Principal 
Registration) and NASD Rule 1032 (Categories of Representative 
Registration) to change the date by which eligible registrants must 
complete the firm-element continuing education requirement to engage in 
a security futures business from December 31, 2006 to December 31, 
2009.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\5\ which requires, among 
other things, that NASD rules must 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. The proposed rule change is necessary to continue to 
allow eligible registrants to complete a firm-element continuing 
education that will qualify them to engage in a security futures 
business.
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    \5\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    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.

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.

[[Page 62499]]

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 19(b)(3)(A) of the Act and Rule 
19b-4(f)(6) thereunder.\6\
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    \6\ 17 CFR 240.19b-4(f)(6).
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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 NASD-2006-118 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number NASD-2006-118. 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 NASD. 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-NASD-2006-118 and should be submitted on or before November 15, 
2006.
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    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
Nancy M. Morris,
Secretary.
 [FR Doc. E6-17844 Filed 10-24-06; 8:45 am]

BILLING CODE 8011-01-P