Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of a Proposed Rule Change Relating to Revisions to the General Securities Registered Representative (Series 7) Examination, and the Corresponding Specifications and Content Outline

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34843; File No. SR-Phlx-94-50]

Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;

Notice of Filing of a Proposed Rule Change Relating to Revisions to the

General Securities Registered Representative (Series 7) Examination,

and the Corresponding Specifications and Content Outline

October 14, 1994.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''),\1\ notice is hereby given that on October 3, 1994, the

Philadelphia Stock Exchange, Inc. (``Phlx'' or ``Exchange'') filed with

the Securities and Exchange Commission (``Commission'') the proposed

rule change as described in Items I, II, and III below, which Items

have been prepared primarily by the Phlx. 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) (1988).

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I. Self-Regulatory Organization's Statement of the Terms of Substance

or the Proposed Rule Change

The Phlx proposes, in conjunction with the other self-regulatory

organizations (``SROs''), to use a revised version of the General

Securities Registered Representative (``Series 7'') Examination, the

corresponding specifications and content outline.\2\ The Phlx would

adopt the amended Series 7, as well as the corresponding specifications

and content outline.

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\2\For a detailed description of the revised Series 7

examination, see Securities Exchange Act Release Nos. 34340 (July 8,

1994), 59 FR 35959 [File No. SR-NYSE-94-27] (notice of filing of

proposed rule change relating to the revision of the content outline

for the Series 7 Examination); 34341 (July 8, 1994), 59 FR 35960

[File No. SR-NYSE-94-26] (notice of proposed rule change relating to

the revision of examination specifications for the Series 7

Examination).

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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, the Phlx included statements

concerning the purpose of and basis for the proposed rule change. The

text of these statements may be examined at the places specified in

Item IV below. The Phlx 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

The Phlx proposes to use the Series 7 as amended, as the

appropriate qualification examination for persons seeking registration

as general securities representatives. The Series 7 examination is

generally required under rules of the self-regulatory organizations

(``SROs'') for persons who are engaged in the solicitation, purchase

and/or sale of securities for the accounts of customers. The purpose of

the Series 7 examination is to ensure that registered representatives

have the basic knowledge necessary to preform their functions and

responsibilities. The Series 7 examination specifications detail the

areas covered by the examination and break down the number of

examination questions culled from each area.

Revision of the Series 7 examination, specifications and content

outline was initiated in April 1993 by an industry committee of SROs

and representatives from broker-dealers in order to update the

examination in view of changes in the securities industry, including

changes in relevant rules and regulations, the development of new

securities products, and changes in the job of registered

representatives as firms offer an increasingly wide range of financial

services.\3\ The examination specifications for the Series 7 have not

been revised since 1986.

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\3\SROs on the committee include the New York Stock Exchange,

American Stock Exchange, Chicago Board Options Exchange, Municipal

Securities Rulemaking Board, National Association of Securities

Dealers and Philadelphia Stock Exchange. Broker-dealer

representatives include branch office managers, compliance officers,

training personnel and registered representatives.

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The industry committee updated the existing statements of the

critical functions of registered representatives to ensure current

relevance and appropriateness and drafted statements of tasks expected

to be performed by entry-level registered representatives, and

conformed the existing content outline to the task statements. Under

the proposed rule change, the total number of questions in the Series 7

examination will remain 250, and the revised examination will cover all

financial product areas covered on the present Series 7 examination as

well as several new products, including collateralized mortgage

obligations (``CMOs''), long term equity anticipation securities

(``LEAPS'') and CAPS, with reduced emphasis on direct participation

programs.

The other SRO participants will also file the revised

specifications for approval by the Commission. The Phlx intends to

commence use of the revised examination, specifications and content

outline jointly with the other SROs, upon approval of the proposed rule

changes of all of the other SRO participants.

The statutory basis for the Series 7 examination lies in Section

6(c)(3)(B) of the Act. 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. Pursuant to this statutory obligation, the Exchange has

developed examinations that are administered to establish that persons

associated with Exchange members and member organizations have attained

specified levels of competence and knowledge.

B. Self-Regulatory Organization's Statement on Burden on Competition

The Phlx 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 thirty-five 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 ninety 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. 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 Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such filing will also be available

for inspection and copying at the principal office of the Phlx. All

submissions should refer to File No. SR-Phlx-94-50 and should be

submitted by November 10, 1994.

For the Commission by the Division of Market Regulation,

pursuant to delegated authority.\4\

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\4\17 CFR 200.30-3(a)(12) (1994).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-26060 Filed 10-19-94; 8:45 am]

BILLING CODE 8010-01-M