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FINRA

 

For Release:
Contact:
Monday, December 16, 1996
Nancy A. Condon - (202) 728-8379

NASD Board Approves Creation of Two New Exams

Washington, D.C.--The Board of Governors of the National Association of Securities Dealers, Inc. (NASD) has approved the creation of two new exams for government securities brokers and corporate securities traders.

 

Under the new plan, which now goes to the Securities and Exchange Commission (SEC) for public comment and approval, every trader of corporate equity securities must take the new Series 55 exam, in addition to the Series 7 (which qualifies brokers as general securities representatives) or Series 62 (the Corporate Securities Exam). The new Equity Trader Exam would be required for every new and existing trader, market maker, proprietary trader, and agency trader. Existing traders will have up to two years to pass the Series 55 exam.

 

The proposal also requires that any broker, who is either new to the securities industry or who has been in the business for less than two years, and sells government securities must take either the new Series 72 (Government Securities Representative Exam) or the existing Series 7 exam.

 

Creation of these two new exams, which were approved by the Board of Directors of NASD Regulation, Inc. last month, significantly upgrade the qualification standards necessary for brokers who focus on sales or trading in these areas.

 

"Adding these exams will help educate the thousands of brokers who specialize in trading corporate equities and selling government securities at a time when the market for them, and their complexity, is growing," said NASD Regulation President Mary L. Schapiro. "Simultaneously, investors will now have access to securities professionals who can provide guidance and offer recommendations based on an even broader range of knowledge."

 

The multi-hour tests, each of which will have about 100 questions, will be offered at 150 NASD-approved testing centers across the country.

 

The new exams join the existing battery of tests that NASD Regulation administers for the securities industry to qualify registered representatives and principals. In 1996, NASD Regulation will administer more than 250,000 exams.

 

The Series 55 exam was developed to assure that traders have a more consistent understanding of securities industry's rules and practices, especially in light of the rapid regulatory and structural changes in the marketplace.

 

The development of the Series 72 exam comes on the heels of recent congressionally enacted amendments to the Securities Exchange Act of 1934. Before that jurisdictional enlargement, NASD Regulation lacked the authority to require a qualification examination for brokers solely engaged in solicitation and sale of government securities.