Document ID: SEC-2005-0373-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.
Posted Date: 2005-12-14T05:00Z

[Federal Register: December 14, 2005 (Volume 70, Number 239)]
[Notices]               
[Page 74083-74085]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14de05-119]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52916; File No. SR-Phlx-2005-71]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto Relating to Revisions to the Series 9/10 
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 16, 2005, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
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 the Phlx. 
On November 29, 2005, Phlx filed Amendment No. 1 to the proposed rule 
change. Phlx 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

    The Phlx proposes to file revisions to the study outline and 
selection specifications for the Limited Principal--General Securities 
Supervisor (Series 9/10) examination (``Series 9/10 Examination''), 
which is administered by the National Association of Securities 
Dealers, Inc. (``NASD''). The proposed revisions

[[Page 74084]]

update the material to reflect changes to the laws, rules, and 
regulations covered by the Series 9/10 Examination, as well as modify 
the content of the examination program to track more closely the 
functional workflow of a Series 9/10 limited principal. Phlx is not 
proposing any textual changes to its rules.
    The revised Series 9/10 Examination study outline is available on 
Phlx's Web site (http://www.phlx.com), at the Phlx, and at the 

Commission.\5\
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    \5\ The Series 9/10 Examination study outline is also available 
on NASD's Web site (http://www.nasd.com).

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    However, The Exchange has omitted the Series 9/10 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.\6\
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    \6\ 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, the Phlx 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. The Phlx 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
    The Series 9/10 Examination tests a candidate's knowledge of 
securities industry rules and regulations and certain statutory 
provisions pertinent to the supervision of sales activities. The Series 
9/10 Examination is shared by Phlx and the following SROs: The NASD, 
the American Stock Exchange LLC , the Chicago Board Options Exchange, 
Inc., the Municipal Securities Rule Making Board (``MSRB'') , the New 
York Stock Exchange, Inc. (``NYSE''), and the Pacific Exchange, Inc.
    A committee of industry representatives, together with the staff of 
NASD and the other SROs, recently undertook a periodic review of the 
Series 9/10 examination program. As a result of this review, the NASD 
has filed a rule change proposal with the Commission \7\ and Phlx is 
proposing a similar rule change to update the content of the 
examination to cover Regulation S-P,\8\ MSRB Rules G-37/G-38, SRO 
research analyst and anti-money laundering rules, municipal fund 
securities (e.g., 529 college savings plans), and exchange traded 
funds. Phlx is further proposing revisions to the study outline to 
reflect the Commission's short sale requirements. In addition, as part 
of an ongoing effort to align the examination more closely to the 
supervisory duties of a Series 9/10 limited principal, the proposal 
would modify the content of the examination to track the functional 
workflow of a Series 9/10 limited principal, and would include 
questions related to parallel rules of NASD, the options exchanges, the 
MSRB, and the NYSE in the same section of the exam.
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    \7\ See Securities Exchange Act Release No. 52548 (September 30, 
2005), 70 FR 59111 (October 11, 2005) (SR-NASD-2005-111). In the 
filing, the NASD proposes an implementation date of no later than 
November 30, 2005.
    \8\ 17 CFR 248.1-18; 17 CFR 248.30; and 17 CFR 248, Appendix A.
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    As a result of the revisions, Phlx is proposing to modify the main 
section headings and the number of questions on each section of the 
Series 9/10 study outline as follows: Section 1--Hiring, 
Qualifications, and Continuing Education, 9 questions; section 2--
Supervision of Accounts and Sales Activities, 94 questions; section 3--
Conduct of Associated Persons, 14 questions; section 4--Recordkeeping 
Requirements, 8 questions; section 5--Municipal Securities Regulation, 
20 questions; section 6--Options Regulation, 55 questions. Sections 1 
through 5 constitute the Series 10 portion of the examination. Section 
6 constitutes the Series 9 portion of the examination. Series 10 covers 
general securities and municipal securities, and Series 9 covers 
options. The revised examination continues to cover the areas of 
knowledge required for the supervision of sales activities.
    Phlx is proposing these changes to the entire content of the Series 
9/10 examination, including the selection specifications and question 
bank. The number of questions on the Series 9/10 examination will 
remain at 200, and candidates will continue to have four hours to 
complete the Series 10 portion and one and one-half hours to complete 
the Series 9 portion. Also, each question will continue to count one 
point, and each candidate must correctly answer 70 percent of the 
questions on each series, 9 and 10, to receive a passing grade. Phlx 
believes that the other SROs are filing similar proposals.
    As further discussed below, the Exchange is filing the proposed 
rule change for immediate effectiveness. The Exchange will announce the 
proposed revisions in a Notice to Members to be published prior to the 
implementation date.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act--\9\ in general and furthers the objectives of section 
6(c)(3),\10\ which authorize Phlx to prescribe standards of training, 
experience and competence for members of the Exchange or persons 
associated with them.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(c)(3).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Phlx does not believe that the proposed rule change, as 
amended, will impose any burden on competition 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

    No written comments were either solicited or received.

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) \11\ of the Act and Rule 19b-4(f)(1) 
thereunder,\12\ 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(i).
    \12\ 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.\13\
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    \13\ The effective date of the original proposed rule is 
November 16, 2005. The effective date of Amendment No. 1 is November 
29, 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 29, 2005, the date on which Phlx submitted 
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).

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[[Page 74085]]

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-Phlx-2005-71 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-Phlx-2005-71. 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 Phlx.
    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-Phlx-2005-71 
and should be submitted on or before January 4, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).

Jonathan G. Katz,
Secretary.
 [FR Doc. E5-7306 Filed 12-13-05; 8:45 am]

BILLING CODE 8010-01-P