-------------------- BEGINNING OF PAGE #1 -------------------

SECURITIES AND EXCHANGE COMMISSION
(Release No. 34-35341; File Nos. SR-AMEX-94-59; SR-CBOE-94-49;
SR-CHX-94-27; SR-MSRB-94-17; SR-NASD-94-72; SR-NYSE-94-43;
SR-PSE-94-35; and SR-PHLX-94-52)

February 8, 1995

Self-Regulatory Organizations; Order Approving Proposed Rule
Changes by the American Stock Exchange, Inc., Chicago Board
Options Exchange, Incorporated, Chicago Stock Exchange,
Incorporated, Municipal Securities Rulemaking Board, National
Association of Securities Dealers, Inc., New York Stock Exchange,
Inc., Pacific Stock Exchange Incorporated, and Philadelphia Stock
Exchange, Inc. Relating to a Continuing Education Requirement for
Registered Persons.

I.   Introduction

     Pursuant to Section 19(b)(1) of the Securities Exchange Act
of 1934 ("Act"), -[1]- and Rule 19b-4 thereunder, -[2]- on
November 30 and December 1, 5, 7, 12, 13, and 14, 1994, the
Chicago Stock Exchange, Incorporated ("CHX"), the Chicago Board
Options Exchange, Incorporated ("CBOE"), the New York Stock
Exchange, Inc. ("NYSE"), the National Association of Securities
Dealers, Inc. ("NASD"), the Municipal Securities Rulemaking Board
("MSRB") and the Pacific Stock Exchange Incorporated ("PSE"), the
American Stock Exchange, Inc. ("AMEX"), and the Philadelphia
Stock Exchange, Inc. ("PHLX"), respectively ("Self-Regulatory
Organizations" or "SROs"), submitted to the Securities and
Exchange Commission ("Commission" or "SEC") proposed rule changes
to establish a formal, two-part continuing education program for
securities industry professionals.  This program includes a
Regulatory Element requiring uniform, periodic training in
regulatory matters, and a Firm Element requiring members -[3]- to
















                                                                 

-[1]-     15 U.S.C.   78s(b)(1) (1988).

-[2]-     17 CFR 240.19b-4 (1994).

-[3]-     As used herein, the term "members" refers to: members
          and member organizations when used with reference to
          the AMEX, CBOE, CHX, NYSE, and PSE; members, member
          organizations, participants, and participant
          organizations when used with reference to the PHLX;
          brokers, dealers, and municipal securities dealers when
          used with reference to the MSRB; and members when used
          with reference to the NASD.
 
-------------------- BEGINNING OF PAGE #2 -------------------

maintain ongoing programs to keep their registered persons -[4]-
up-to-date on job and product related subjects.
     The SROs' proposals were published for comment in the
Federal Register on December 20, 1994. -[5]-  Two comments were
received, and are discussed below.  On January 30, and 31 and
February 1, and 2, 1995, the NASD, CHX, CBOE, MSRB, PSE, AMEX,
NYSE, and PHLX each filed Amendment No. 1 to their respective
proposals. -[6]-  These amendments made a variety of non-
substantive, clarifying changes to the proposals and are
incorporated into the discussion below. -[7]-  This order
approves the SROs' proposals, including all amendments made
thereto.

                                                                 

-[4]-     For purposes of the proposed rules, the term
          "registered person" means any person required to be
          registered under the rules of the applicable SRO,
          including members and registered representatives, but
          does not include any person whose activities are
          limited solely to the transaction of business on the
          floor of a national securities exchange with members or
          registered broker-dealers.  When used with reference to
          the MSRB, however, the term "registered person" means
          any person registered with the appropriate enforcement
          authority as a municipal securities representative,
          municipal securities principal, municipal securities
          sales principal, or financial and operations principal
          pursuant to MSRB Rule G-3.

-[5]-     Securities Exchange Act Release No. 35102 (December 15,
          1994), 59 FR 65563 (December 20, 1994).

-[6]-     See letters from Craig L. Landauer, Associate General
          Counsel, NASD, to Mark P. Barraccca, Branch Chief,
          Division of Market Regulation ("Division"), SEC, dated
          January 19, 1995, and Francois Mazur, Attorney,
          Division, SEC, dated January 30, 1995 ("NASD Amendment
          No. 1"); letter from David T. Rusoff, Foley & Lardner,
          to Francois Mazur, Attorney, Division, SEC, dated
          January 30, 1995 ("CHX Amendment No. 1"); letter from
          Arthur B. Reinstein, Senior Attorney, CBOE, to Holly
          Smith, Associate Director, Division, SEC, dated January
          31, 1995 ("CBOE Amendment No. 1"); letter from Ronald
          W. Smith, Legal Associate, MSRB, to Francois Mazur,
          Attorney, Division, SEC, dated February 1, 1995 ("MSRB
          Amendment No. 1"); letter from Michael D. Pierson,
          Senior Attorney, PSE, to Francois Mazur, Attorney,
          Division, SEC, dated February 1, 1995 ("PSE Amendment
          No. 1"); letter from Claire P. McGrath, Managing
          Director and Special Counsel, Derivative Securities,
          AMEX, to Glen Barrentine, Team Leader, Division, SEC,
          dated February 1, 1995 ("AMEX Amendment No. 1"); letter
          from James E. Buck, Senior Vice President and
          Secretary, NYSE, to Francois Mazur, Attorney, Division,
          SEC, dated February 1, 1995 ("NYSE Amendment No. 1");
          and letter from Gerald D. O'Connell, First Vice
          President, Market Regulation and Trading Operations,
          PHLX, to Glen Barrentine, Team Leader, Division, SEC,
          dated February 2, 1995 ("PHLX Amendment No. 1").

-[7]-     Among other things, the SROs' Amendments No. 1 made
          conforming changes to clarify the wording of the re-
          entry provisions of the rule proposals.
 
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II.  Description of Proposals

     The proposed rule changes adopt uniform enabling rules for
the implementation of a continuing education program for the
securities industry.

     A.   Background

     In May 1993, a self-regulatory organization task force
("Task Force") was formed by the AMEX, CBOE, MSRB, NASD, NYSE,
and PHLX, which also included 12 representatives from a wide
range of broker-dealer firms, to study the continuing education
needs of the securities industry.  In September 1993, the Task
Force issued a report recommending a formal two-part continuing
education program that would require uniform, industry-wide,
periodic training for registered persons in regulatory matters
and ongoing training programs conducted by firms to keep their
employees updated on job and product-related subjects.  The Task
Force also recommended that a permanent Council on Continuing
Education, composed of broker-dealer and SRO representatives, be
formed to develop the content and provide ongoing maintenance of
the continuing education program.  Pursuant to this
recommendation, the Securities Industry/Regulatory Council on
Continuing Education ("Council") was formed in September 1993,
with representatives from six SROs and thirteen broker-dealers. 
     After studying the recommendations of the Council, the SROs
participating in the Council submitted proposed rule changes with
the Commission to adopt continuing education requirements.  The
proposed rule changes would codify the Task Force's
recommendations, allow uniform implementation of the continuing
education program, and provide a means for the SROs to monitor
and enforce the program's requirements.

     B.  The Regulatory Element

     The Regulatory Element requires uniform, periodic training
in a variety of regulatory subjects.  It provides that registered
persons, unless exempt, must complete a prescribed training
program after their second, fifth, and tenth registration
anniversary dates. -[8]-  The Regulatory Element will not apply
to registered persons whose activities are limited solely to the
transaction of business on the floor of a national securities
exchange with members or registered broker-dealers. -[9]-  The
Regulatory Element also will not apply to persons registered for
more than ten years as of the effective date of the rule, unless
such persons become subject to the re-entry provisions described
                                                                 

-[8]-     Any registered person who has terminated his or her
          association with a member and who, within two years of
          the date of termination, becomes reassociated in a
          registered capacity with a member, would be required to
          complete the training program at such intervals (two,
          five, and ten years) as would apply based upon the
          individual's initial registration anniversary date
          rather than the date of reassociation in a registered
          capacity.  In the event a non-associated person's
          second, fifth, or tenth anniversary date passes without
          such individual completing the appropriate phase of the
          training program on a timely basis, that person would
          be required to complete such phase prior to becoming
          reassociated in a registered capacity.

-[9]-     Amendments No. 1 as filed by the NYSE, AMEX, CBOE, CHX,
          PSE, and PHLX revised the language of the proposal to
          clarify that the foregoing exemption covers non-member
          registered persons as well as registered persons who
          are members.  See supra note 6.
 
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below.  Persons registered for ten years or less as of the
effective date of the rule will be required to satisfy the
Regulatory Element and complete the computer-based training
program after the occurrence of the next relevant registration
anniversary date and on any applicable registration anniversary
date(s) thereafter. -[10]-
     The Regulatory Element will be administered using computer-
based interactive training techniques and will consist of
standardized subject matters covering compliance, ethics, and
sales practice issues, among other subjects.  Failure to complete
the program within prescribed time-frames (i.e., within 120 days
after the occurrence of the applicable registration anniversary
date, or as otherwise determined by the SROs) will result in a
person's registration being deemed inactive and that person being
prohibited from performing the functions of a registered person
until such time as the person has completed the program.  The
applicable SRO will terminate administratively the registration
of anyone who is inactive for two years, provided that upon
application and a showing of good cause, the SRO may allow a
registered person additional time to satisfy the program
requirements. -[11]-
     Unless otherwise determined by a self-regulatory
organization, a registered person, including anyone who has
completed all or part of the Regulatory Element of the program or
who meets the exemption for persons registered more than ten
years, will be required to re-enter the Regulatory Element and
satisfy all of its requirements in the event such person:
 
     1.   becomes subject to any statutory disqualification as
          defined in Section 3(a)(39) of the Act; -[12]-
 
    2.   becomes subject to suspension or to the imposition of a
          fine of $5,000 or more for violation of any provision
          of any securities law or regulation; or any agreement
          with, or rule or standard of conduct of, any securities
          governmental agency, securities self-regulatory
          organization, or as imposed by any such regulatory or
          self-regulatory organization in connection with a
          disciplinary proceeding; or

     3.   is ordered as a sanction in a disciplinary action to
          re-enter the continuing education program by any


                                                                 

-[10]-    As a result, a person whose tenth year anniversary date
          falls on the implementation date of the continuing
          education requirement would have to participate in the
          Regulatory Element within 120 days of that date. 
          Alternatively, a person registered more than ten years
          on the implementation date, and not subject to a
          disciplinary action within the last ten years, would
          not have to participate in the Regulatory Element.

-[11]-    Anyone administratively terminated must requalify by
          taking the appropriate exam (e.g., the General
          Securities Registered Representative Examination or
          "Series 7") before such person's registration could be
          reactivated.   The Commission recently approved the use
          of a revised Series 7 examination.  See Securities
          Exchange Act Release Nos. 35021 (November 29, 1994), 59
          FR 62768 (December 6, 1994) (approving PHLX proposal),
          and 34853 (October 18, 1994), 59 FR 53694 (October 25,
          1994) (approving NYSE proposal).

-[12]-    15 U.S.C.   78c(a)(39) (1988 & Supp. 1993).
 
-------------------- BEGINNING OF PAGE #5 -------------------

          securities governmental agency or securities self-
          regulatory organization. -[13]-
     Re-entry begins with initial participation within 120 days
of the registered person becoming subject to the statutory
disqualification, or the disciplinary action becoming final, and
on three additional occasions thereafter, at intervals of two,
five, and ten years after re-entry. -[14]-  Although the re-
entry provision applies notwithstanding that a registered person
has completed all or part of the program requirements based on
length of time as a registered person or completion of ten years
of participation in the program, it does not apply to any
registered person whose activities are limited solely to the
transaction of business on the floor with other registered
persons. -[15]-

     C.  The Firm Element

     To satisfy the Firm Element of the program, SRO members are
required to develop and administer training programs to enhance
the knowledge, skills, and professionalism of their registered
sales, trading, and investment banking personnel who have direct
contact with customers, and for the immediate supervisors of such
persons.  Members must prepare training plans that take into
consideration the organization's size, organizational structure,
scope of business activities, and regulatory developments.  In
addition, training plans should take advantage of the feedback
that will be generated from the Regulatory Element regarding the
performance of covered persons.  At a minimum, programs used to
implement a member's training plan must be appropriate for the
business of the member and must cover the general investment
features and associated risk factors, suitability and sales
practice considerations, and applicable regulatory requirements,
of the securities products offered by the member.
     Members will be required to review and, if necessary, update
their training plans annually.  The SROs may require their
members, either individually or as part of a group, to provide
specific training in any areas the SROs deem necessary.  Persons
subject to the training plan will have an affirmative obligation
to participate in the programs identified by the member. 
Accordingly, members will be required to maintain records
documenting the content of their training programs and the
completion of the program by registered persons covered under the
plan.
     The SROs will not pre-approve training materials and
programs developed by members or providers.  The SROs will,
however, communicate regularly with members regarding their
                                                                 

-[13]-    Amendments No. 1 as filed by the SROs revised the
          language of the proposal to provide that an order to
          re-enter the continuing education program may be made
          by any securities governmental agency or securities
          self-regulatory organization.  Previously, the proposal
          provided that such an order was to be made only by the
          "Commission, any securities self-regulatory
          organization or any state securities agency."  See
          supra note 6.

-[14]-    Amendments No. 1 as filed by the SROs revised the
          language of the proposal to clarify that the 120 day
          period would start to run upon a registered person
          becoming subject to a statutory disqualification as
          well as within 120 days of a disciplinary action being
          final.  Id.

-[15]-    Id.
 
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expectations for the content of training programs.  As the
program evolves, it is expected that educational standards will
be defined by the SROs for products and services where heightened
regulatory concerns exist.

     D.  Effective Date

     The effective date for the Regulatory Element portion of the
program is July 1, 1995.  Any person registered ten years or less
as of the effective date shall participate initially within 120
days after the occurrence of such person's second, fifth, or
tenth registration anniversary date, whichever anniversary date
first applies.  The SROs intend that the requirements of the Firm
Element be implemented in two steps under which members will be
required to have completed their Firm Element plans by July 1995,
with actual implementation of the plans no later than January,
1996.

III. Comments Received by the Commission

     The Commission received two comment letters regarding the
SROs' proposals, one from the Boston Stock Exchange ("BSE"),
-[16]- and the other from the Certified Financial Planner Board
of Standards, Inc. ("CFPBS"). -[17]-  The BSE supports the SROs'
proposals and believes that implementation of the continuing
education program will elevate the quality of the securities
markets and increase the level of service and protection afforded
investors.
     The CFPBS is concerned that certain requirements of the Firm
Element could impose continuing education requirements beyond
those currently imposed by the CFPBS upon its licensees.  The
CFPBS would like the continuing education requirements proposed
by the SROs to be completely reciprocal with those of the CFPBS. 
While the Commission is sympathetic to the concerns of the CFPBS,
it believes that the specialized knowledge expected of
individuals who are licensed to sell securities warrant the
imposition by the SROs of educational requirements that exceed
those required by the CFPBS of its licensees.

IV.  Comments Solicited By the SROs

     On August 15, 1994, the NASD published Special Notice to
Members ("NTM") 94-59 to request comment regarding the NASD's
draft rules to create a mandated continuing education program for
the securities industry.  Thirty-three comment letters were
received in response, of which five opposed the proposal, and the
remaining commenters either expressed support for, or were not
opposed to, the proposal.  In addition, on August 15, 1994, the
MSRB published its proposed Continuing Education Requirement,
Rule G-3, and subsequently received five comment letters. -[18]- 
The NYSE received one comment letter.
                                                                 

-[16]-    See letter from John I. Fitzgerald, Executive Vice
          President, Legal Affairs and Trading Services, BSE, to
          Jonathan G. Katz, Secretary, SEC, dated January 25,
          1995.

-[17]-    See letter from Robert P. Goss, CFP, Executive
          Director, CFPBS, to Secretary, SEC, dated January 4,
          1995.  The CFPBS establishes qualifications for initial
          professional certification that include education,
          examination, experience, and ethics requirements.  In
          addition, it develops and administers continuing post-
          certification requirements and disciplinary procedures
          for its licensees.  The CFPBS licenses nearly 30,000
          persons in the United States, of whom approximately
          18,000 are licensed to sell securities.

-[18]-    MSRB Reports, Vol. 14, No. 4 (August 15, 1994).
 
-------------------- BEGINNING OF PAGE #7 -------------------

     A.   Comments Regarding the Regulatory Element

     Several commenters expressed concern about certain
provisions of the draft rules.  These concerns include a
perceived ambiguity regarding when registered persons must
participate in the Regulatory Element; the effects of inactive
status and how to reactivate registration; and the apparent
ability of the SEC and the SROs arbitrarily to mandate re-entry
into the Regulatory Element.  The SROs subsequently addressed
these concerns in the proposals they filed with the
Commission. -[19]-
     Other concerns were raised with respect to the Regulatory
Element, including its cost and focus (some found its scope too
broad, others too narrow).  Concern also was expressed that the
re-entry provision's disciplinary fine threshold was ambiguous as
written and could be unfair in application.  Other commenters
focused on the statistics to be generated by the Regulatory
Element.  Specifically, they were concerned about the types of
statistics that would be available, and the intended and
acceptable uses of such statistics. 
     Several commenters were concerned that the Regulatory
Element would only be administered at NASD operated testing
centers.  Suggested alternatives included administering the
Regulatory Element at firms, subject to appropriate controls, and
reliance on third party interactive programs similar to those
provided to the futures industry.
     One commenter suggested that the securities industry model
the Regulatory Element after state insurance continuing education
programs, in which the licensing authority imposes the regulatory
requirement directly on the individual, rather than on the firm. 
Another suggestion was that the Central Registration Depository
("CRD") -[20]- help firms comply with the Regulatory Element. 
Specifically, CRD could be used by firms to determine the length
of service of their registered persons and to identify those that
would be subject to the Regulatory Element in each of the next
few years.

     B.   Comments Regarding the Firm Element

     A concern expressed by several commenters regarding the Firm
Element was the cost it will impose on smaller firms.  To
mitigate this effect, it was suggested that the SROs prepare and
administer training programs; provide subsidies to smaller firms
to help them comply with the Firm Element; or that a video
satellite program be created that would enable firms to secure
qualified speakers, and include material that would comply with
the Firm Element.
     Several commenters stated that the standards for the Firm
Element are too vague to allow firms to ensure proper compliance.

Some commenters suggested that the Firm Element focus on
suitability, and that some form of pre-approval be provided
regarding the contents of a firm's program. Another commenter
questioned the usefulness of feedback from the Regulatory Element
in developing an appropriate Firm Element.  Concern also was
expressed regarding the apparent authority of an SRO arbitrarily
to prescribe specific training for a member firm.  Finally, there
was uncertainty regarding those who would be deemed "covered
persons."
                                                                 

-[19]-    See infra, Part IV, Section C.

-[20]-    CRD is a computerized filing and data processing system
          operated by the NASD that maintains registration
          information regarding registered broker-dealers and
          their registered personnel for access by state
          regulators, SROs, and the Commission.
 
-------------------- BEGINNING OF PAGE #8 -------------------

     C.   Response to Comments

     In their filings with the Commission, the SROs addressed
certain of the commenters' concerns by making three technical
changes to the Regulatory Element portion of the rules as
originally drafted.  First, the SROs revised the rules to state
clearly that registered persons must participate in the
Regulatory Element on three occasions: after the occurrence of
their second, fifth, and tenth registration anniversary dates. 
Second, the SROs expanded the provision concerning failure to
complete the Regulatory Element to state that a registration that
is inactive for a period of two calendar years would be
terminated administratively, and that a person whose registration
is so terminated must requalify by taking the appropriate
examination, before such person's registration could be
reactivated.  Third, the SROs revised the re-entry provision of
the Regulatory Element to clarify that a securities governmental
agency or securities SRO could only require re-entry into the
program in connection with a sanction in a disciplinary action. 
This change is meant to address the concerns of those commenting
on the due process issues that could arise if regulatory
authorities were able to mandate re-entry arbitrarily.
     In response to comments received, the Council has stated
that the CRD system will be used to track and communicate
anniversary dates and evidence of completion of the Regulatory
Element.  The Regulatory Element's computer based systems will
also capture, store, and analyze data that will indicate who took
the training, when, and where, as well as other information.
V.   Discussion
     The Commission believes that the SROs' proposed rule changes
are consistent with the requirements of the Act and the rules and
regulations thereunder applicable to national securities
exchanges, national securities associations, and the MSRB and, in
particular, the respective requirements of Sections 6(b)(5),
15A(b)(6), and 15B(b)(2)(C) of the Act. -[21]-  Sections 6(b)(5),
15A(b)(6), and 15B(b)(2)(C) require, among other things, that the
rules of an exchange, an association, or the MSRB, respectively,
be designed to promote just and equitable principles of trade,
remove impediments to and perfect the mechanism of a free and
open market and a national market system, and, in general,
protect investors and the public interest.  The Commission
further believes that the proposed rule changes also are
consistent with the respective provisions of Sections 6(c)(3)(B),
15A(g)(3)(A), and 15B(b)(2)(A) of the Act, -[22]- each of which
makes it the responsibility of an exchange, an association, or
the MSRB to prescribe standards of training, experience and
competence for persons associated with SRO members.
     The Commission also believes that the proposed rule change
is consistent with the purposes underlying Section 15(b)(7) of
the Act, -[23]- which generally prohibits a registered broker-
dealer from effecting any transaction in, or inducing the
purchase or sale of, any security unless such broker-dealer meets
the standards of training experience, competence, and other
qualifications as the Commission finds necessary or appropriate


                                                                 

-[21]-    15 U.S.C.   78f(b)(5), 78o-3(b)(6), and 78o-4(b)(2)(C)
          (1988).

-[22]-    15 U.S.C.    78f(c)(3)(B), 78o-3(g)(3)(A), and 78o-
          4(b)(2)(A) (1988).

-[23]-    15 U.S.C.   78o(b)(7) (1988).
 
-------------------- BEGINNING OF PAGE #9 -------------------

in the public interest or for the protection of investors. -[24]-

The Commission believes that the SROs' proposals to impose
affirmative obligations on registered persons on a continuing
basis are an appropriate means of maintaining and reinforcing the
qualification standards applicable when a person first is
registered.  Moreover, it is Commission policy to rely
principally on the SROs for the formulation and administration of
qualification standards, subject to Commission review and
oversight. -[25]-
     The SROs' proposals convey broadly applicable information
relating to compliance, regulatory, ethical, and general sales
practice standards, as well as job related material for specific
professional areas and products.  The SROs have divided the
continuing education program into two parts: the Regulatory
Element, which emphasizes subjects regarding legal and ethical
standards, and the Firm Element, which contemplates the timely
transmission of product related information to maintain and
expand individuals' professional knowledge.  Taken together, the
Elements form the basis for an educational program that should
ensure that registered persons have the training and knowledge
necessary to conduct themselves in an appropriate professional
manner, over the course of their careers.  The Commission also
notes that the re-entry provision of the Regulatory Element,
which is triggered by disciplinary action, will ensure that those
individuals who have not complied with all applicable regulatory
requirements, receive further training as a condition to their
re-entry into business.
     The Commission believes that a continuing education
requirement for persons in the securities industry, administered
pursuant to industry developed standards, will benefit public
investors as a result of the increased knowledge and enhanced
understanding of regulatory and ethical standards by industry
members.  SRO qualification of registered persons of broker-
dealers is of critical importance in promoting compliance with
the requirements of the federal securities laws.  Increasing the
sensitivity of registered persons to regulatory and ethical
matters also should enhance investor confidence in the securities
industry.  Moreover, the recent attention that has been devoted
to derivatives underscores the need for securities industry
personnel to receive thorough training in the products in which
they deal.
     The SROs have noted that the Regulatory Element of the
program initially will be administered only in the NASD's testing
centers, stating that this is necessary to allow the NASD to
manage the introduction of the program in a reasonable manner. 
Nevertheless, interest has been expressed in permitting member
firms either to administer the Regulatory Element in-house, or to
solicit the services of outside vendors.  While recognizing the
concerns of the Council and the SROs regarding the technological
and administrative issues that arise in connection with the in-
house administration of the Regulatory Element, the Commission
                                                                 

-[24]-    Id.

-[25]-    See Rule 15b7-1 under the Act, 17 CFR 240.15b7-1
          (1994), and Securities Exchange Act Release No. 32261
          (May 4, 1993), 58 FR 27656 (May 11, 1993) (in adopting
          Rule 15b7-1 to require broker-dealers to comply with
          SRO qualification standards, the Commission stated that
          it has been longstanding Commission policy to rely
          principally on the SROs in the formulation and
          administration of qualification standards, subject to
          Commission review and oversight).
 
-------------------- BEGINNING OF PAGE #10 -------------------

encourages the Council and the SROs to continue to study whether
practical and reasonable alternatives to the NASD's testing
centers can be developed. -[26]-
     The Commission notes with approval that the Firm Element
Committee of the Council is developing guidelines for dealers'
use in devising and carrying out training programs to meet the
requirements of the Firm Element, including providing guidance as
to how different firms might approach the requirements (e.g.,
firms that deal with one product, small firms, and firms with
large numbers of very small offices or solo representatives). 
These guidelines will offer suggestions intended to help firms
devise appropriate and reasonable programs consistent with their
own unique characteristics and businesses.  The Commission
believes that such guidance will particularly benefit smaller
firms and should lessen their costs of compliance with the Firm
Element.  The Commission encourages the SROs, as they gain
experience with the continuing education program, to continue
such efforts.

VI.  Conclusion
     IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the
Act, -[27]- that the proposed rule changes (File Nos. SR-AMEX-
94-59, SR-CBOE-94-49, SR-CHX-94-27, SR-MSRB-94-17, SR-NASD-
94-
72, SR-NYSE-94-43, SR-PSE-94-35, and SR-PHLX-94-52) are approved.
     By the Commission.

                              Jonathan G. Katz
                              Secretary














                                                          

-[26]-    Specifically, delivery of the Regulatory Element other
          than through the NASD's testing centers would require
          that appropriate safeguards be developed to ensure the
          integrity of the program and the ability to capture the
          necessary information for feedback.

-[27]-    15 U.S.C.   78s(b)(2) (1988).