[Federal Register Volume 63, Number 236 (Wednesday, December 9, 1998)]
[Notices]
[Pages 67969-67970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32605]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40720; File No. SR-NYSE-98-36]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the New York Stock Exchange, Inc. to Amend Rule 35 (``Floor
Employees To Be Registered'') and Adopt a New Interpretation to Rule 35
November 30, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934,\1\ (``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given
that on October 22, 1998, the New York Stock Exchange, Inc. (``NYSE''
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 NYSE.
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.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The proposed rule change consists of an amendment to Exchange Rule
35 (``Floor Employees to be Registered'') and a new interpretation with
respect to the administration of proposed amended Rule 35. The text of
the proposed rule is as follows. Additions are italicized; deletions
are [bracketed].
Proposed Amendments to Rule 35
Floor Employees To Be Registered
Rule 35. No employee of a member or member organization shall be
admitted to the Floor unless he is registered with, qualified by and
approved by the Exchange, and upon compliance of both the employer
and employee with such requirements as the Exchange may determine.
Supplementary Material
.10-.50 No Change
.60 Qualifications for Registration--Unless otherwise determined
by the Exchange, each candidate for registration shall qualify by
meeting the training requirements and by passing applicable
qualification examination(s) as prescribed by the Exchange.
[.60] .70 No Change in Text
Proposed New Interpretation to Rule 35
Rule 35--Floor Employees to be Registered
/01 Unless otherwise determined by the Exchange, all Floor
employees of members or member organizations (i.e., Trading
Assistants) shall pass the Trading Assistant Qualification
Examination (``Series 25'').
New Trading Assistant candidates must complete three months of
training, including on-the-job and classroom training, as prescribed
by the Exchange, prior to taking the Series 25 Examination. During
the three month training period, the Trading Assistant candidate may
perform the functions and duties of a Trading Assistant provided
that the candidate is properly supervised. However, a new Trading
Assistant candidate must complete required training and pass the
Series 25 Examination before functioning as an ``unsupervised''
Trading Assistant (i.e., functioning without the specialized
supervision required during the training period).
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 Exchange 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 and is set forth in sections A, B, and C below.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Prosed Rule Change
1. Purpose
The purpose of the rule change is to revise Rule 35 to require
Floor employees of members and member organizations to satisfy
prescribed training and qualification examination requirements before
being admitted to the Exchange Trading Floor. The proposed rule change
will also adopt a new interpretation to Rule 35 to implement the
qualification examination requirements for Floor Employees.
Exchange Rule 35 dictates the terms under which an employee of a
member or member organization may be admitted to the Exchange Trading
Floor. Currently, the registration process for such Floor employees
i.e., Post Clerks and Booth Clerks, also known as Trading Assistants,
consists of submission to the Exchange of a completed Form U-4
(``Uniform Application for Securities Industry Registration or
Transfer'') and the candidate's fingerprints. Under the proposed
amendments to Rule 35, these Trading Assistants, will have to be
qualified by taking and passing appropriate qualification
examination(s) and by meeting prescribed training requirements.
In order to qualify Trading Assistants, the Exchange, in
conjunction with a committee of Exchange Members and Trading
Assistants, developed a new qualification examination, the Trading
Assistant Qualification Examination (``Series 25 Examination''). The
Series 25 Examination will ensue that Trading Assistants have the basic
knowledge, skills and abilities necessary to perform the functions and
carry out the responsibilities of a Trading Assistant. The Series 25
Examination itself is the subject of a separate filing.\3\
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\3\ Securities Exchange Act Release No. 40721 (November 30,
1998).
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The requirement to take and pass the Series 25 examination in order
to qualify as a Trading Assistant will apply to all current and
prospective Trading Assistants. The proposed new interpretation to Rule
35 will establish that new Trading Assistants will be required to
undergo three months of training (including on-the-job and prescribed
classroom instruction provided by the Exchange) prior to taking the
examination. New Trading Assistants will not be permitted to perform
their functions without appropriate supervision until passing the
examination. Current Trading Assistants would have one year from
implementation of the qualification requirement to pass the examination
and do not have to complete classroom training. If a current Trading
Assistant fails the Series 25 examination twice, however, he or she
must complete classroom training before retaking the examination. The
NYSE intends to publish the new interpretation as an Interpretation
Memorandum for inclusion in the Exchange's Interpretation Handbook.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(c)(3)(B) of the Act.\4\ Under that
Section, it is the Exchange's responsibility to prescribe standards of
training, experience and
[[Page 67970]]
competence for persons associated with Exchange members and member
organizations.
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\4\ 15 U.S.C. 78f(c)(3)(B)
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In addition, under Section 6(c)(3)(B) of the Act, \5\ the Exchange
may bar a natural person from becoming a member or person associated
with a member, if such natural person does not meet such standards of
training, experience and competence as are prescribed by the rules of
the Exchange. Pursuant to this statutory obligation, the Exchange has
developed an examination that will be administered to establish that
Trading Assistants have attained specified levels of competence and
knowledge.
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\5\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposal 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
Comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve the proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street N.W., Washington, D.C. 20549.
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 the filing will also be
available for inspection and copying at the principal office of the
NYSE. All submissions should refer to the File No. SR-NYSE-98-36 and
should be submitted by December 30, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to the delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margater H. McFarland,
Deputy Secretary.
[FR Doc. 98-32605 Filed 12-8-98; 8:45 am]
BILLING CODE 8010-01-M
