Document ID: SEC-2007-0025-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Futures Association
Posted Date: 2007-01-08T05:00Z

[Federal Register: January 8, 2007 (Volume 72, Number 4)]
[Notices]               
[Page 805-806]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08ja07-94]                         

[[Page 805]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54980; File No. SR-NFA-2006-04]

 
Self-Regulatory Organization; National Futures Association; 
Notice of Filing and Immediate Effectiveness of a Proposed Amendment 
Relating to the Interpretive Notice Regarding NFA Compliance Rules 2-7 
and 2-24 and Registration Rule 401: Proficiency Requirements for 
Security Futures Products

December 20, 2006.
    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 November 27, 2006, National Futures Association (``NFA'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change described in Items I, II, and III below, which 
Items have been prepared by NFA. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons. NFA also has filed the proposed rule change with the Commodity 
Futures Trading Commission (``CFTC'').
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    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 17 CFR 240.19b-7.
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    NFA, on November 21, 2006, submitted the proposed rule change to 
the CFTC for approval and invoked the ``ten-day'' provision of Section 
17(j) of the Commodity Exchange Act (``CEA'').\3\ By letter dated 
December 4, 2006, the CFTC notified NFA of its determination not to 
review the proposed rule change.\4\
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    \3\ 7 U.S.C. 21(j).
    \4\ See Letter from Lawrence B. Patent, Deputy Director, CFTC, 
to Thomas W. Sexton, III, General Counsel, NFA (December 4, 2006) 
(``Letter'').
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I. Self-Regulatory Organization's Description of the Proposed Rule 
Change

    In November 2001, NFA's Board approved an Interpretive Notice 
allowing current registrants to qualify to engage in security futures 
activities by taking a training program instead of a test. The 
Interpretive Notice initially provided for a six-month window after 
security futures products (``SFPs'') began trading, and the Notice was 
subsequently amended--as were NASD's rules--to extend that window until 
December 31, 2006. The proposed rule change extends the current 
provisions substituting training for testing until December 31, 2009.

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

    In its filing with the Commission, NFA has prepared statements 
concerning the purpose of, and basis for, the proposed rule change, 
burdens on competition, and comments received from members, 
participants, and others. The text of these 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 
aspects of such statements.

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

1. Purpose
    Initially, both NFA and the National Association of Securities 
Dealers, Inc. (``NASD'') anticipated developing tests for registrants 
who engage in security futures activities. In the meantime, NFA and 
NASD jointly developed a web-based training program that complies with 
the training requirement. To date, just over 13,000 individuals have 
completed that program. Approximately 9,000 of these individuals were 
registered with full broker-dealers (some of which are also FCMs), and 
approximately 4,000 were registered with futures-only firms. The vast 
majority completed the training within a year after NFA began offering 
it.
    Only 180 individuals completed the training in the first eight 
months of 2006. Based on the small number of new individuals who desire 
to sell these products and the fact that SFPs are lightly traded, NFA 
and NASD staffs have concluded that developing and adopting tests at 
this time is not cost-effective.
2. Statutory Basis
    The rule change is authorized by, and consistent with, Section 
15A(k) of the Act.\5\
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    \5\ 15 U.S.C. 78o-3(k).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The rule change will not impose any burden on competition that is 
not necessary or appropriate in furtherance of the purposes of the Act 
and the CEA.

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

    NFA did not publish the rule change to the membership for comment. 
NFA did not receive comment letters concerning the rule change.

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

    NFA, on November 21, 2006, submitted the proposed rule change to 
the CFTC for approval and invoked the ``ten-day'' provision of Section 
17(j) of the CEA.\6\ By letter dated December 4, 2006, the CFTC 
notified NFA of its determination not to review the proposed rule 
change.\7\ The proposed rule change has become effective on December 4, 
2006.
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    \6\ 7 U.S.C. 21(j).
    \7\ See Letter, supra note 4.
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    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 refiled in accordance with the provisions of Section 19(b)(1) 
of the Act.\8\
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    \8\ 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 No. SR-NFA-2006-04 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 No. SR-NFA-2006-04. 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/

[[Page 806]]

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 will also be available for inspection and copying at the 
principal office of the NFA. 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 No. SR-NFA-2006-04 and should be submitted on or before January 
29, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(75).
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Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E6-22658 Filed 1-5-07; 8:45 am]

BILLING CODE 8011-01-P