Document ID: SEC-2005-0094-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2005-10-11T04:00Z

[Federal Register: October 11, 2005 (Volume 70, Number 195)]
[Notices]               
[Page 59107-59109]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11oc05-79]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52547; File No. SR-NASD-2005-110]

 
Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Revisions to the Series 6 Examination Program

September 30, 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 September 13, 2005, 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 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 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

    NASD is filing revisions to the study outline and selection 
specifications for the Limited Representative--Investment Company and 
Variable Contracts Products (Series 6) examination program.\5\ The 
proposed revisions update the material to reflect changes to the laws, 
rules, and regulations covered by the examination, as well as modify 
the content of the examination program to track more closely the 
functional workflow of a Series 6 limited representative. NASD is not 
proposing any textual changes to the By-Laws, Schedules to the By-Laws, 
or Rules of NASD.
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    \5\ NASD also is proposing corresponding revisions to the Series 
6 question bank, but based upon instruction from the Commission 
staff, NASD is submitting SR-NASD-2005-110 for immediate 
effectiveness pursuant to Section 19(b)(3)(A)(i) of the Act and Rule 
19b-4(f)(1) thereunder, and is not filing the question bank for 
Commission review. See letter to Alden S. Adkins, Senior Vice 
President and General Counsel, NASD Regulation, from Belinda Blaine, 
Associate Director, Division of Market Regulation (``Division''), 
Commission, dated July 24, 2000. The question bank is available for 
Commission review.
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    The revised study outline is available on NASD's Web site (http://www.nasd.com
), at NASD, and at the Commission.\6\ However, NASD has 

omitted the Series 6 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.\7\
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    \6\ Telephone conversation between Mia Zur, Attorney, Jan Woo, 
Attorney, Division, Commission, and Afshin Atabaki, Counsel, NASD, 
dated September 23, 2005.
    \7\ 17 CFR 240.24b-2.

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[[Page 59108]]

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
    Pursuant to Section 15A(g)(3) of the Act,\8\ which requires NASD to 
prescribe standards of training, experience, and competence for persons 
associated with NASD members, NASD has developed examinations, and 
administers examinations developed by other self-regulatory 
organizations, that are designed to establish that persons associated 
with NASD members have attained specified levels of competence and 
knowledge. NASD periodically reviews the content of the examinations to 
determine whether revisions are necessary or appropriate in view of 
changes pertaining to the subject matter covered by the examinations.
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    \8\ 15 U.S.C. 78o-3(g)(3).
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    The Series 6 examination qualifies persons seeking registration 
with NASD as investment company and variable contracts products limited 
representatives. NASD Rule 1032(b) \9\ states that registered 
representatives in this limited category are permitted solely to engage 
in transactions involving redeemable securities of companies registered 
under the Investment Company Act of 1940 (``Investment Company Act''), 
securities of closed-end companies registered under the Investment 
Company Act during the period of original distribution only, and 
variable contracts and insurance premium funding programs and other 
contracts issued by an insurance company except contracts that are 
exempt securities pursuant to Section 3(a)(8) of the Securities Act of 
1933.\10\
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    \9\ Telephone conversation between Katherine England, Assistant 
Director, Mia Zur, Attorney, Jan Woo, Attorney, Division, 
Commission, and Afshin Atabaki, Counsel, NASD, dated September 23, 
2005.
    \10\ 15 U.S.C. 77c(a)(8).
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    A committee of industry representatives, together with NASD staff, 
recently undertook a review of the Series 6 examination program. As a 
result of this review, NASD is proposing to update the study outline to 
cover Regulation S-P,\11\ anti-money laundering rules, municipal fund 
securities (e.g., 529 college savings plans), Regulation D,\12\ and 
exchange-traded funds. In addition, as part of an ongoing effort to 
align the examination more closely to the functions of a Series 6 
limited representative, NASD is proposing to modify the content of the 
study outline to track the functional workflow of a Series 6 
representative. NASD also is proposing to increase the number of 
sections covered by the Series 6 outline from four to six. Finally, 
NASD is proposing to modify the section headings and the number of 
questions on each section of the outline as follows: Section 1, 
Securities Markets, Investment Securities, and Economic Factors, 8 
questions; Section 2, Securities and Tax Regulations, 23 questions; 
Section 3, Marketing, Prospecting, and Sales Presentations, 18 
questions; Section 4, Evaluation of Customers, 13 questions; Section 5, 
Product Information: Investment Company Securities and Variable 
Contracts, 26 questions; and Section 6, Opening and Servicing Customer 
Accounts, 12 questions.
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    \11\ 17 CFR 248.1-18; 17 CFR 248.30; and 17 CFR 248, Appendix A.
    \12\ 17 CFR 230.501-230.508.
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    NASD is proposing these changes to the entire content of the Series 
6 examination, including the selection specifications and question 
bank. The number of questions on the Series 6 examination will remain 
at 100, and candidates will continue to have 2 hours and 15 minutes to 
complete the exam. Also, each question will continue to count as one 
point, and each candidate must correctly answer 70 percent of the 
questions to receive a passing grade.
2. Statutory Basis
    NASD believes that the proposed revisions to the Series 6 
examination program are consistent with the provisions of Sections 
15A(b)(6) \13\ and 15A(g)(3) of the Act,\14\ which authorize NASD to 
prescribe standards of training, experience, and competence for persons 
associated with NASD members.
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    \13\ 15 U.S.C. 78o-3(b)(6).
    \14\ 15 U.S.C. 78o-3(g)(3).
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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.

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

    The proposed rule change has become effective pursuant to Section 
19(b)(3)(A)(i) of the Act \15\ and Rule 19b-4(f)(1) thereunder,\16\ 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 the self-regulatory organization. 
NASD proposes to implement the revised Series 6 examination program no 
later than November 30, 2005. NASD will announce the implementation 
date in a Notice to Members to be published no later than 60 days after 
Notice of this filing.
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    \15\ 15 U.S.C. 78s(b)(3)(A)(i).
    \16\ 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.

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-NASD-2005-110 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-NASD-2005-110. This 
file

[[Page 59109]]

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 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-2005-110 and should be submitted on or before 
November 1, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-5561 Filed 10-7-05; 8:45 am]

BILLING CODE 8010-01-P