Document ID: SEC-2008-0043-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations: Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Posted Date: 2008-01-08T05:00Z

[Federal Register: January 8, 2008 (Volume 73, Number 5)]
[Notices]               
[Page 1385-1387]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08ja08-95]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57077; File No. SR-FINRA-2007-030]

 
Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change Relating to Revisions to the Series 55 Examination 
Program

December 31, 2007.
    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 December 12, 2007, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') (f/k/a 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 substantially by FINRA. 
FINRA has designated this proposal 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

    FINRA is filing revisions to the study outline and selection 
specifications for the Limited Representative--Equity Trader (Series 
55) examination program.\5\ The proposed revisions

[[Page 1386]]

update the material to reflect changes to the laws, rules and 
regulations covered by the examination and to better reflect the duties 
and responsibilities of a Limited Representative--Equity Trader. FINRA 
is not proposing any textual changes to the By-Laws, Schedules to the 
By-Laws, or Rules of FINRA.
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    \5\ FINRA also is proposing corresponding revisions to the 
Series 55 question bank, but based upon instruction from the 
Commission staff, FINRA is submitting SR-FINRA-2007-030 for 
immediate effectiveness pursuant to Section 19(b)(3)(A) 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, SEC, dated July 
24, 2000, attached as Exhibit 3c to the proposed rule change. The 
question bank is available for Commission review.
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    The text of the proposed rule change is available at http://www.finra.org
, the principal offices of FINRA, and the Commission's 

Public Reference Room. The Series 55 selection specifications have been 
submitted to the Commission under separate cover 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, 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 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
    Section 15A(g)(3) of the Act \7\ requires FINRA to prescribe 
standards of training, experience, and competence for persons 
associated with FINRA members. In accordance with that provision, FINRA 
has developed examinations, and administers examinations developed by 
other self-regulatory organizations, that are designed to establish 
that persons associated with FINRA members have attained specified 
levels of competence and knowledge. FINRA 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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    \7\ 15 U.S.C. 78o-3(g)(3).
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    Pursuant to NASD Rule 1032(f), each associated person of a member 
who is included within the definition of representative in NASD Rule 
1031(b) is required to register with FINRA as a Limited 
Representative--Equity Trader if, with respect to transactions in 
equity, preferred or convertible debt securities effected otherwise 
than on a securities exchange, such person is engaged in proprietary 
trading, the execution of transactions on an agency basis or the direct 
supervision of such activities. There is an exception from the Limited 
Representative--Equity Trader requirement for any associated person of 
a member whose trading activities are conducted principally on behalf 
of an investment company that is registered with the Commission 
pursuant to the Investment Company Act of 1940 and that controls, is 
controlled by, or is under common control with the member. The Series 
55 examination is the FINRA examination that qualifies an individual to 
function as a Limited Representative--Equity Trader. Before 
registration as a Limited Representative--Equity Trader may become 
effective, the individual must be registered as either a General 
Securities Representative (Series 7) or Limited Representative-
Corporate Securities (Series 62).
    A committee of industry representatives, together with FINRA staff, 
recently undertook a review of the Series 55 examination program. As a 
result of this review, FINRA is proposing to make revisions to the 
study outline to reflect changes to the laws, rules and regulations 
covered by the examination and to better reflect the duties and 
responsibilities of a Limited Representative--Equity Trader.
    Among other revisions, FINRA is proposing to revise the references 
to the FINRA and The NASDAQ Stock Market LLC (``NASDAQ'') rules in the 
study outline to reflect NASDAQ's separation from FINRA (then known as 
NASD). FINRA also is proposing to add sections on NASD Rules 2441 (Net 
Transactions with Customers) and 5110 (Transactions Related to Initial 
Public Offerings).
    FINRA is proposing to change the title of Section 2 of the study 
outline from ``NASDAQ Display, Execution and Trading Systems'' to 
``Display, Execution and Trading Systems.'' Further, as a result of the 
revisions discussed above, the number of questions on each section of 
the study outline was modified as follows: NASDAQ and Over-The-Counter 
Markets, increased from 41 to 42 questions; Display, Execution and 
Trading Systems, decreased from 17 to 12 questions; Trade Reporting 
Requirements, increased from 19 to 22 questions; and General Industry 
Standards, increased from 23 to 24 questions.
    FINRA is proposing similar changes to the Series 55 selection 
specifications and question bank. The number of questions on the Series 
55 examination will remain at 100, and candidates will continue to have 
3 hours to complete the exam. Also, each question will continue to 
count one point, and each candidate must correctly answer 70 percent of 
the questions to receive a passing grade.
2. Statutory Basis
    FINRA believes that the proposed revisions to the Series 55 
examination program are consistent with the provisions of Sections 
15A(b)(6) \8\ and 15A(g)(3) of the Act,\9\ which authorize FINRA to 
prescribe standards of training, experience, and competence for persons 
associated with FINRA members.
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    \8\ 15 U.S.C. 78o-3(b)(6).
    \9\ 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

    The proposed rule change has become effective pursuant to Section 
19(b)(3)(A)(i) of the Act \10\ and Rule 19b-4(f)(1) thereunder,\11\ 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. 
FINRA proposes to implement the revised Series 55 examination program 
on February 12, 2008. FINRA will announce the implementation date in a 
Regulatory Notice to be published on December 12, 2007, the date FINRA 
filed SR-FINRA-2007-30 with the Commission.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(i).
    \11\ 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

[[Page 1387]]

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-2007-030 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-FINRA-2007-030. 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 publicly available. All 
submissions should refer to File Number SR-FINRA-2007-030 and should be 
submitted on or before January 29, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-90 Filed 1-7-08; 8:45 am]

BILLING CODE 8011-01-P