[Federal Register Volume 64, Number 144 (Wednesday, July 28, 1999)]
[Notices]
[Pages 40928-40929]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19266]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41626; File No. SR-NYSE-99-19]
Self-Regulatory Organization; Order Approving Proposed Rule
Change by the New York Stock Exchange, Inc. To Adopt a New
Interpretation of Rule 35 (``Floor Employees To Be Registered'')
July 20, 1999.
I. Introduction
On May 14, 1999, the New York Stock Exchange, Inc. (``Exchange'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
adopt a new interpretation of Exchange Rule 35 (``Floor Employees to be
Registered''). The proposed rule change was published for comment in
the Federal Register on June 18, 1999.\3\ The Commission did not
receive any comments on the proposal. This order approves the proposed
rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 41514 (June 10, 1999),
64 FR 32912 (June 18, 1999).
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II. Description of the Proposal
The purpose of the proposed new interpretation of Rule 35 is to
prescribe the qualification requirements (i.e., training and
examination) for Front Line Specialist Clerks (``FLS 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
of 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 Qualification Examination (``Series 21''). The
examination is intended to 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 a 90-minute test consisting of 65
questions. The examination covers such topics as preparing for the
market opening, opening the display book, preparing for the market
close, and generating trade reports. Though the requirement to take and
pass the proposed Series 21 examination will apply to all prospective
and current FLS Clerks, qualification requirements will differ as
follows:
Prospective FLS Clerks
Individuals not currently functioning as FLS Clerks will be
required to pass the Series 25 qualifying examination as a prerequisite
to taking the Series 21 examination. 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 of ``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 require during the training period.
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 examination (Trading Assistant
Qualification Examination) is a prerequisite to taking the Series 21
examination, but no training program will be required for these
individuals since they already are acting in the capacity of FLS
Clerks.
III. Discussion
The Commission finds that the require is consistent with the
requirements of the Act and the rules and required thereunder
applicable to a national securities exchange.\4\ In particular, the
Commission finds that the proposed rule change is consistent with the
requirements of Section
[[Page 40929]]
6(c)(3)(B) of the Act,\5\ which provides that 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. The Commission finds that requiring the FLS Clerks to
take the Series 21 examination and to under on-the-job training is
consistent with Section 6(c)(3)(B) because it provides the Exchange
with a means to measure an FLS Clerk's ability and qualifications and
to ensure that the Clerks are trained in an on-the-job setting. The
Series 21 Examination covers such topics as preparing for the market
opening, operating the display book, preparing for the market close,
and generating trade reports, all topics designed to measure the
Clerk's ability to perform his or her assigned tasks. Requiring all
current and future FLS Clerks to pass the Series 21 Examination will
help ensure that they are adequately trained and qualified to perform
their duties competently.
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\4\ In approving the proposed rule change, the Commission also
has considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
\5\ 15 U.S.C. 78f(c)(3)(B).
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\6\ that the proposed rule change (SR-NYSE-99-19) is approved.
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\6\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 99-19266 Filed 7-27-99; 8:45 am]
BILLING CODE 8010-01-M
