Document ID: SEC-2005-0397-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2005-12-15T05:00Z

[Federal Register: December 15, 2005 (Volume 70, Number 240)]
[Notices]               
[Page 74384-74386]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de05-102]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52917; File No. SR-Amex-2005-121]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
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 21, 2005, the American Stock Exchange LLC (``Amex'' 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 Amex. On 
November 23, 2005, Amex filed Amendment No. 1 to the proposed rule 
change. Amex 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

    Amex is filing revisions to the study outline and selection 
specifications for the Limited Principal--General Securities Sale 
Supervisor (Series 9/10) examination program (``Series 9/10 
Examination''). The proposed revisions 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 Series 9/10 
Examination to track more closely the functional workflow of a Series 
9/10 limited principal.
    The revised study outline is available on Amex's Web site (http://www.amex.com
), at Amex, and at the Commission. However, Amex 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.\5\
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    \5\ 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, Amex 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. Amex has prepared summaries, set forth in sections A, B,

[[Page 74385]]

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
    Amex Rule 341 prohibits members from permitting a direct supervisor 
of a Registered Representative \6\ to perform his duties in such 
capacity until the direct supervisor is registered with, qualified by 
and approved by the Exchange. Pursuant to Commentary .06 to Amex Rule 
320, a Registered Representative supervisor's responsibilities include 
approving new accounts and reviewing correspondence of Registered 
Representatives, transactions and customer accounts. The only 
examination that qualifies a Registered Representative supervisor is 
the Series 9/10 Examination. 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.
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    \6\ A ``Registered Representative'' engages in the solicitation 
of orders for the purchase or sale of securities or other similar 
instruments for the account of customers; or in the solicitation of 
subscriptions to investment advisory or to investment management 
services furnished on a fee basis. The term Registered 
Representative does not apply to individuals who are engaged solely 
in the solicitation or handling of business in, or the sale of, 
commodity contracts or who are engaged solely as securities traders 
or securities arbitrageurs. See Amex Definition 8.
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    The Series 9/10 Examination is shared by Amex and the following 
SROs: the National Association of Securities Dealers, Inc. (``NASD''), 
the Chicago Board Options Exchange, Inc., the New York Stock Exchange, 
Inc. (``NYSE''), the Municipal Securities Rule Making Board (``MSRB''), 
the Pacific Exchange, Inc., and the Philadelphia Stock Exchange, Inc.
    A committee of industry representatives, together with the staff of 
Amex and the other SROs, recently undertook a periodic review of the 
Series 9/10 Examination. As a result of this review, Amex is proposing 
to update the content of the Series 9/10 Examination to cover 
Regulation S-P,\7\ 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. Amex is further proposing 
revisions to the Series 9/10 Examination study outline to reflect the 
SEC short sale requirements. In addition, as part of an ongoing effort 
to align the Series 9/10 Examination more closely to the supervisory 
duties of a Series 9/10 limited principal, Amex is proposing to modify 
the content of the Series 9/10 Examination to track the functional 
workflow of a Series 9/10 limited principal. Also, Amex is proposing to 
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\ 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, Amex is proposing to modify the main 
section headings and the number of questions on each section of the 
Series 9/10 Examination 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 Series 9/10 
Examination. Section 6 constitutes the Series 9 portion of the Series 
9/10 Examination. Series 10 covers general securities and municipal 
securities, and Series 9 covers options. The revised Series 9/10 
Examination continues to cover the areas of knowledge required for the 
supervision of sales activities.
    Amex 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.
    As noted below, NASD has filed with the Commission a similar 
proposed rule change reflecting the revisions to the Series 9/10 
Examination \8\ and Amex understands that the other SROs also will file 
similar proposed rule changes.
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    \8\ See Securities Exchange Act Release No. 52548 (September 30, 
2005), 70 FR 59111 (October 11, 2005) (SR-NASD-2005-111).
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2. Statutory Basis
    Amex believes that the proposed rule change is consistent with 
section 6 of the Act \9\ in general and furthers the objectives of 
section 6(c)(3) \10\ which authorizes Amex to prescribe standards of 
training, experience and competence for persons associated with Amex 
members.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(c)(3).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change, as amended, does not impose 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

    No written comments were solicited or received with respect to the 
proposed rule change.

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) of the Act \11\ 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 of Amex. While the 
Series 9/10 Examination is co-owned by certain SROs, NASD administers 
the Series 9/10 Examination. Amex will announce the implementation date 
in a Notice to Members to be published no later than 60 days after SEC 
Notice of this filing.
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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 21, 2005. The effective date of Amendment No. 1 is November 
23, 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 23, 2005, the date on which Amex submitted 
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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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, as amended, is consistent with the Act. Comments may be 
submitted by any of the following methods:

[[Page 74386]]

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-Amex-2005-121 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-Amex-2005-121. 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 Amex. 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-Amex-2005-121 and should be submitted on or before 
January 5, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
Jonathan G. Katz,
Secretary.
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    \14\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E5-7366 Filed 12-14-05; 8:45 am]

BILLING CODE 8010-01-P