[Federal Register Volume 64, Number 117 (Friday, June 18, 1999)]
[Notices]
[Pages 32912-32913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15486]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41514; File No. SR-NYSE-99-19]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the New York Stock Exchange, Inc. To Adopt a New
Interpretation to Rule 35 (``Floor Employees To Be Registered'')
June 10, 1999.
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 May 14, 1999, the New York Stock Exchange, Inc. (``Exchange'') filed
with the Securities and Exchange Commission (``Commission'' or ``SEC'')
the proposed rule change as described in Items I, II, and III below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The proposed rule change consists of a new interpretation with
respect to the administration of Exchange Rule 35 (``Floor Employees to
be Registered''). The new interpretation prescribes the requirements
for Front Line Specialist Clerks (``FLS Clerks''), which include a
qualifying examination (``Series 21'') for all current and prospective
FLS Clerk and a supervised training period requirement which will apply
only to prospective FLS Clerks.
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. The Exchange 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 purpose of the proposed new interpretation to Rule 35 is to
prescribe the qualification requirements (i.e., training and
examination) for Front Line Specialist Clerks. In addition to dictating
the terms under which employees of members or member organizations may
be admitted to the Exchange Trading Floor, Rule 35 mandates compliance
by both employer and employee with such requirements as the Exchange
may determine. The proposed interpretation to Rule 35 will require FLS
Clerks to pass a new examination, developed by the Exchange in
cooperation with a committee of Floor representatives (members,
Specialists, and FLS Clerks) called the Front Line Specialist Clerk
[[Page 32913]]
Qualification Examination (``Series 21''). The examination will ensure
that FLS Clerks have the basic knowledge and skills necessary to
perform their duties, which include assisting Floor Specialists. The
Series 21 examination is the second step in a program to ensure that
Floor employees are appropriately qualified. The first step was
implementation of the Series 25 Trading Assistant Qualification
Examination.\1\
---------------------------------------------------------------------------
\1\ See Securities Exchange Act Release No. 40943 (January 13,
1999), 64 FR 3330 (January 21, 1999) (SR-NYSE-98-36); Securities
Exchange Act Release No. 40944 (January 13, 1999), 64 FR 3329
(January 21, 1999) (SR-NYSE-98-35).
---------------------------------------------------------------------------
The Series 21 examination is a 90-minute test consisting of 65
questions. Implementation of the examination is scheduled to take place
90 days after its approval by the SEC. The examination specifications,
content and fee (i.e., $200 per exam administration) will be more
specifically addressed in separate filings. Though the requirements to
take and pass the proposed Series 21 examination will apply to all
prospective and current FLS Clerks, qualification requirements will
differ as follows:
Current FLS Clerks
Individuals who are currently functioning as FLS Clerks will be
required to pass the Series 21 examination within one year of its
implementation. The Series 25 qualification examination is a
prerequisite, but no training program will be required for these
individuals since they are already acting in the capacity of FLS
Clerks.
Prospective FLS Clerks
Individuals not currently functioning as FLS Clerks will also be
required to pass the Series 25 qualifying examination as a Series 21
prerequisite. Upon passing the Series 25, the prospective FLS Clerk
must complete a training program to become eligible for the Series 21
examination. The training program shall consist of a minimum of six
months ``on-the-job'' experience with a Specialist under a supervisory
program to be determined by the Specialist. All candidates must pass
the Series 21 examination before functioning as an ``unsupervised'' FLS
Clerk, i.e., functioning without the specialized supervision required
during the training period.
2. Statutory Basis
The proposed rule change is consistent with the requirements of
Section 6(c)(3)(B) of the Act.\3\ Under that Section, it is the
Exchange's responsibility to prescribe standards of training,
experience and competence for persons associated with Exchange members
and member organizations. In addition, under Section 6(c)(3)(B), 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 Front Line Specialist Clerks have attained specified
levels of competence and knowledge.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78f(c)(3)(B).
---------------------------------------------------------------------------
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 (1) 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 proposal 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. 20549-0609. 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
Exchange. All submissions should refer to File No. SR-NYSE-99-19 and
should be submitted by July 9, 1999.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
---------------------------------------------------------------------------
\4\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-15486 Filed 6-17-99; 8:45 am]
BILLING CODE 8010-01-M
