[Federal Register: February 1, 2006 (Volume 71, Number 21)]
[Notices]
[Page 5391-5392]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01fe06-162]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53182; File No. SR-NASD-2005-135]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Order Approving a Proposed Rule Change Relating to the
Status of Former Registered Persons Serving in the Armed Forces of the
United States
January 26, 2006.
I. Introduction
On November 15, 2005, the National Association of Securities
Dealers, Inc. (``NASD'') 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 proposal to amend NASD IM-1000-2 to toll the two-year
expiration provisions for qualification examination requirements set
forth in NASD Rules 1021(c), 1031(c), and 1041(c) for certain former
registered persons serving in the Armed Forces of the United States,
including persons who commence their active military duty within two
years after they have ceased to be registered with a member and persons
who terminate their registration with a member while on active military
duty. The proposed rule change was published for comment in the Federal
Register on December 27, 2005.\3\ The Commission received one comment
letter on the proposal.\4\ 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\ See Securities Exchange Act Release No. 52979 (December 19,
2005), 70 FR 76483.
\4\ See e-mail from John C. Vallier dated January 18, 2006. The
comment narrowly addresses the commenter's personal situation as a
registered person serving in the Armed Forces of the United States
and does not directly address the subject of this proposal.
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II. Description of the Proposal
The filing proposes to amend NASD IM-1000-2 to toll the ``two-year
licensing expiration provisions'' for a person previously registered
with a member who commences his active military duty within two years
after he has ceased to be registered with the member. Under the
proposal, the tolling would start on the date such person enters active
military service and would terminate 90 days following the person's
completion of active service in the Armed Forces of the United States.
The proposal requires that NASD be properly notified of the person's
period of active military service within 90 days following his
completion of active service or upon his re-registration with a member,
whichever occurs first. The proposal also provides that if such person
does not re-register with a member within 90 days following his
completion of active service in the Armed Forces of the United States,
the amount of time in which the person must become re-registered with a
member without being subject to the ``two-year licensing expiration
provisions'' will consist of the standard two-year period reduced by
the period of time between the person's termination of registration and
beginning of active service in the Armed Forces of the United States.
In addition, NASD is proposing to amend NASD IM-1000-2 to toll the
``two-year licensing expiration provisions'' for a person placed upon
``inactive'' status pursuant to NASD IM-1000-2 who while serving in the
Armed Forces of the United States ceases to be registered with a
member.\5\ Under the proposal, the tolling would start on the date such
person ceases to be registered with the member and would terminate 90
days following the person's completion of active service in the Armed
Forces of the United States. The proposal requires that NASD be
properly notified of the person's period of active military service
within two years following his completion of active service or upon his
re-registration with a member, whichever occurs first. NASD is
proposing to toll the ``two-year licensing expiration provisions'' for
such persons based on available information in the Central Registration
Depository (CRD) regarding their active military status. The proposal
further provides that if such person does not re-
[[Page 5392]]
register with a member within 90 days following his completion of
active service in the Armed Forces of the United States, the person
would have 90 days plus two years following the end of the person's
active service in the Armed Forces of the United States to become re-
registered with a member.
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\5\ Persons on ``inactive'' status due to active military duty
who do not cease their registration with a member while serving in
the Armed Forces of the United States are not subject to the ``two-
year licensing expiration provisions'' because they are considered
registered for purposes of NASD Rules. See NASD IM-1000-2.
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III. Discussion
After careful consideration, the Commission finds that the proposed
rule change is consistent with the Act and the rules and regulations
thereunder applicable to a national securities association.\6\
Specifically, the Commission believes that the proposal is consistent
with Section 15A(b)(6) of the Act \7\ in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, and, in general, to protect investors
and the public interest. The Commission believes that the proposed rule
change provides appropriate tailored relief to persons actively serving
in the Armed Forces of the United States by tolling the ``two-year
licensing expiration provisions'' in a manner consistent with the goals
of investor protection and market integrity.
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\6\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
\7\ 15 U.S.C. 78o-3(b)(6).
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\8\ that the proposed rule change (SR-NASD-2005-135) is approved.
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\8\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-1307 Filed 1-31-06; 8:45 am]
BILLING CODE 8010-01-P