March 18, 2005
To Whom It May Concern:
The NASDs proposal makes emminent sense. Technical analysis is every bit as valid as fundmental analysis, but draws on very different training and skills. A technical analyst should not be required to posess the skills of a fundamental analyst in order to perform his/her function any more than an accountant should be required to pass the bar exam. The proper exam to test the proficiency of the accountant is the CPA exam.
The Market Technicians Associations CMT program thoroughly tests the candidates knowledge, skills and proficiency in technical analysis, just as the CFA Institutes CFA program tests the skills of the fundamental analyst. Having passed Levels I and II of the CMT program should be deemed prima facie evidence that the individual posesses professional knowledge and skills fully adequate to perform the role of a technical analyst.
We all recognize that some of the recent regulations, put in place in the wake of debilitating corporate and investment banking/research analyst scandals, were promulgated in haste, in order to shore up faltering confidence in the financial markets. The impact of the new rules could not always be completely anticipated. It is precisely this sort of correction that is needed to make the rules work properly.
Under the NASDs proposal, the requirement to past the S-87 portion of the Research Analyst Qualification Examination would still be in place even for those granted requested exemption. It is this portion of the examination series that addresses regulatory administration and best practices; the governing laws, and SEC and SRO rules. Thus, ALL analysts would still be required to demonstrate knowledge of the rules and regulations so important to regain and maintain investor confidence in the markets.
I believe the SEC would be well-advised to approve the NASDs request.