Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Temporarily Adopt (1) Supplementary Material .12 (Temporary Extension of the Limited Period for Registered Persons To Function as Principals) Under FINRA Rule 1210 and (2) Supplementary Material .07 (Temporary Extension of the Limited Period for Persons To Function as Operations Professionals) Under FINRA Rule 1220, 55535-55539 [2020-19719]

Download as PDF Federal Register / Vol. 85, No. 174 / Tuesday, September 8, 2020 / Notices Law 94–409, that the Securities and Exchange Commission Asset Management Advisory Committee (‘‘AMAC’’) will hold a public meeting on Wednesday, September 16, 2020 at 9:00 a.m. PLACE: The meeting will be conducted by remote means. Members of the public may watch the webcast of the meeting on the Commission’s website at www.sec.gov. STATUS: The meeting will begin at 9:00 a.m. and will be open to the public by webcast on the Commission’s website at www.sec.gov. MATTER TO BE CONSIDERED: On August 27, 2020, the Commission issued notice of the meeting (Release No. 34–89693), indicating that the meeting is open to the public and inviting the public to submit written comments to AMAC. This Sunshine Act notice is being issued because a majority of the Commission may attend the meeting. The meeting will include a discussion of matters in the asset management industry relating to the ESG and Private Investments Subcommittees; and improving diversity and inclusion. It will also include a follow-up discussion on COVID–19 matters relating to AMAC’s meeting of May 27, 2020. CONTACT PERSON FOR MORE INFORMATION: For further information, please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551–5400. Dated: September 3, 2020. Vanessa A. Countryman, Secretary. [FR Doc. 2020–19904 Filed 9–3–20; 4:15 pm] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89724; File No. SR– NYSEArca–2020–59] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change To Amend NYSE Arca Rule 8.201–E (CommodityBased Trust Shares) and To Permit the Listing and Trading of Shares of the United States Gold and Treasury Investment Trust Under NYSE Arca Rule 8.201–E jbell on DSKJLSW7X2PROD with NOTICES September 1, 2020. On June 30, 2020, NYSE Arca, Inc. (‘‘NYSE Arca’’) 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 1 15 U.S.C. 78s(b)(1). VerDate Sep<11>2014 16:32 Sep 04, 2020 Jkt 250001 thereunder,2 a proposed rule change to amend NYSE Arca Rule 8.201–E (Commodity-Based Trust Shares) to permit a trust to hold a specified commodity deposited with the trust, and, in addition to such specified commodity, U.S. Department of Treasury securities and/or cash, and to list and trade shares of the United States Gold and Treasury Investment Trust under NYSE Arca Rule 8.201–E, as proposed to be amended. The proposed rule change was published for comment in the Federal Register on July 20, 2020.3 On August 17, 2020, NYSE Arca filed Amendment No. 1 to the proposed rule change, and on August 18, 2020, NYSE Arca withdrew Amendment No. 1 to the proposed rule change. The Commission has received no comments on the proposed rule change. Section 19(b)(2) of the Act 4 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding, or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day after publication of the notice for this proposed rule change is September 3, 2020. The Commission is extending this 45-day time period. The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,5 designates October 18, 2020 as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR–NYSEArca–2020–59). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–19715 Filed 9–4–20; 8:45 am] BILLING CODE 8011–01–P 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 89310 (July 14, 2020), 85 FR 43932. 4 15 U.S.C. 78s(b)(2). 5 Id. 6 17 CFR 200.30–3(a)(31). PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 55535 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89732; File No. SR–FINRA– 2020–026] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Temporarily Adopt (1) Supplementary Material .12 (Temporary Extension of the Limited Period for Registered Persons To Function as Principals) Under FINRA Rule 1210 and (2) Supplementary Material .07 (Temporary Extension of the Limited Period for Persons To Function as Operations Professionals) Under FINRA Rule 1220 September 1, 2020. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on August 28, 2020, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to adopt: (1) Temporary Supplementary Material .12 (Temporary Extension of the Limited Period for Registered Persons to Function as Principals) under FINRA Rule 1210 (Registration Requirements); and (2) temporary Supplementary Material .07 (Temporary Extension of the Limited Period for Persons to Function as Operations Professionals) under FINRA Rule 1220 (Registration Categories). The proposed rule change would extend the 120-day period that certain individuals can function as a principal or Operations Professional without having successfully passed an appropriate qualification examination through December 31, 2020.3 The text of the proposed rule change is available on FINRA’s website at https://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 If FINRA seeks to provide additional temporary relief from the rule requirements identified in this proposed rule change beyond December 31, 2020, FINRA will submit a separate rule filing to further extend the temporary extension of time. 2 17 E:\FR\FM\08SEN1.SGM 08SEN1 55536 Federal Register / Vol. 85, No. 174 / Tuesday, September 8, 2020 / Notices 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 self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization 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 jbell on DSKJLSW7X2PROD with NOTICES 1. Purpose The COVID–19 pandemic is an unpredictable, exogenous event that has resulted in unavoidable disruptions to the securities industry and impacted member firms, regulators, investors and other stakeholders. In response to COVID–19, earlier this year FINRA began providing temporary relief to member firms from FINRA rules and requirements via frequently asked questions (‘‘FAQs’’) on its website.4 Two of these FAQs 5 provide temporary relief to address disruptions to the administration of FINRA qualification examinations caused by the pandemic that have significantly limited the ability of individuals to sit for these examinations due to Prometric test center capacity issues.6 FINRA published the first FAQ on March 20, 2020, providing that individuals whom were designated to function as principals under FINRA Rule 1210.04 prior to February 2, 2020, would be given until May 31, 2020, to pass the appropriate principal qualification examination.7 On May 19, 4 See Frequently Asked Questions Related to Regulatory Relief Due to the Coronavirus Pandemic, available at https://www.finra.org/rules-guidance/ key-topics/covid-19/faq. 5 See https://www.finra.org/rules-guidance/keytopics/covid-19/faq#qe. 6 At the outset of the COVID–19 pandemic, all FINRA qualification examinations were administered at test centers operated by Prometric. Based on the health and welfare concerns resulting from COVID–19, in March Prometric closed all of its test centers in the United States and Canada and began to slowly reopen some of them at limited capacity in May. At this time, not all of these Prometric test centers have reopened at full capacity. 7 FINRA Rule 1210.04 (Requirements for Registered Persons Functioning as Principals for a Limited Period) allows a member firm to designate certain individuals to function in a principal capacity for 120 calendar days before having to pass an appropriate principal qualification examination. VerDate Sep<11>2014 16:32 Sep 04, 2020 Jkt 250001 2020, FINRA extended the relief to pass the appropriate examination until June 30, 2020. Most recently, on June 29, 2020, FINRA again extended the temporary relief providing that individuals who were designated to function as principals under FINRA Rule 1210.04 prior to May 4, 2020, would be given until August 31, 2020, to pass the appropriate principal qualification examination.8 FINRA published the second FAQ on May 15, 2020, providing that individuals whom were designated to function as Operations Professionals under FINRA Rule 1220(b)(3)(B) prior to February 2, 2020, would be given until June 30, 2020, to pass the applicable qualification examination.9 On June 29, 2020, FINRA extended the temporary relief providing that individuals who were designated to function as Operations Professionals under FINRA Rule 1220(b)(3)(B) prior to May 4, 2020, would be given until August 31, 2020, to pass the appropriate qualification examination.10 FINRA continues to closely monitor the impact of the COVID–19 pandemic on member firms, investors, and other stakeholders. One of the impacts of COVID–19 continues to be serious interruptions in the administration of FINRA qualification examinations at Prometric test centers and the limited ability of individuals to sit for the examinations.11 Although Prometric has begun reopening test centers, Prometric’s safety practices mean that currently not all test centers are open, some of the open test centers are at limited capacity, and some open test centers are delivering only certain examinations that have been deemed essential by the local government.12 Furthermore, Prometric has had to close some reopened test centers due to incidents of COVID–19 cases. The initial nationwide closure in March along with the inability to fully reopen all Prometric test centers due to COVID–19 have led to a significant backlog of 8 See supra note 5. to FINRA Rule 1220(b)(3)(B) (Qualifications), a person registering as an Operations Professional may function in that capacity for 120 days before having to pass an applicable qualification examination. 10 See supra note 5. 11 Information about the continued impact of COVID–19 on FINRA-administered examinations is available at https://www.finra.org/rules-guidance/ key-topics/covid-19/exams. 12 Information from Prometric about its safety practices and the impact of COVID–19 on it operations is available at https:// www.prometric.com/corona-virus-update. See also supra note 11. 9 Pursuant PO 00000 Frm 00129 Fmt 4703 Sfmt 4703 individuals who are waiting to sit for FINRA examinations.13 In addition, firms are continuing to experience operational challenges with much of their personnel working from home due to shelter-in-place orders, restrictions on businesses and social activity imposed in various states, and adherence to other social distancing guidelines consistent with the recommendations of public health officials.14 As a result, firms continue to face potentially significant disruptions to their normal business operations that may include a limitation of in-person activities and staff absenteeism as a result of the health and welfare concerns stemming from COVID–19. Such potential disruptions may be further exacerbated and may even affect client services if firms cannot continue to keep principal or Operations Professional positions filled as they may have difficulty finding other qualified individuals to transition into these roles or may need to reallocate employee time and resources away from other critical responsibilities at the firm. These ongoing, extenuating circumstances make it impracticable for member firms to ensure that the individuals whom they have designated to function in a principal or Operations Professional capacity, as set forth in FINRA Rules 1210.04 and 1220(b)(3)(B), are able to successfully sit for and pass an appropriate qualification examination within the 120-calendar day period required under the rules, or to find other qualified staff to fill these positions. The ongoing circumstances also require individuals to be exposed to the health risks associated with taking an in-person examination, because the General Securities Principal and Operations Professional examinations are not available online. Therefore, FINRA is proposing to continue the temporary relief provided through the FAQs by adopting Rules 1210.12 and 1220.07 to extend the 120-day period during which an individual can function as a principal or Operations Professional before having to pass an applicable qualification examination until December 31, 2020.15 The proposed rule change would apply only to those individuals who were designated to function as a principal or 13 Although an online test delivery service has been launched to help address the backlog, the General Securities Principal Exam (Series 24) and the Operations Professional Exam (Series 99) are not available online. See supra note 11. 14 See, e.g., Centers for Disease Control and Prevention, How to Protect Yourself & Others, https://www.cdc.gov/coronavirus/2019-ncov/ prevent-getting-sick/prevention.html. 15 See supra note 3. E:\FR\FM\08SEN1.SGM 08SEN1 Federal Register / Vol. 85, No. 174 / Tuesday, September 8, 2020 / Notices jbell on DSKJLSW7X2PROD with NOTICES Operations Professional prior to September 3, 2020. Any individuals designated to function as a principal or Operations Professional on or after September 3, 2020, would need to successfully pass an appropriate qualification examination within 120 days.16 FINRA believes that this proposed continued extension of time is tailored to address the needs and constraints on a firm’s operations during the COVID– 19 pandemic, without significantly compromising critical investor protection. The proposed extension of time will help to minimize the impact of COVID–19 on firms by providing continued flexibility so that firms can ensure that principal and Operations Professional positions remain filled. The potential risks from the proposed extension of the 120-day period are mitigated by the firm’s continued requirement to supervise the activities of these designated individuals and ensure compliance with federal securities laws and regulations, as well as FINRA rules. FINRA has filed the proposed rule change for immediate effectiveness and has requested that the SEC waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing, so FINRA can implement the proposed rule change immediately. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,17 which requires, among other things, that FINRA rules must be 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 proposed rule change is intended to minimize the impact of COVID–19 on firm operations by further extending the 120-day period certain individuals may function as a principal or Operations Professional without having successfully passed an appropriate qualification examination under FINRA Rules 1210.04 and 1220(b)(3)(B) until December 31, 2020. The proposed rule change does not relieve firms from maintaining, under the circumstances, a reasonably designed system to supervise the activities of their associated persons to achieve compliance with applicable 16 FINRA notes that the proposed rule change would impact members that have elected to be treated as capital acquisition brokers (‘‘CABs’’), given that the CAB rule set incorporates the impacted FINRA rules by reference. 17 15 U.S.C. 78o–3(b)(6). VerDate Sep<11>2014 16:32 Sep 04, 2020 Jkt 250001 securities laws and regulations, and with applicable FINRA rules that directly serve investor protection. In a time when faced with unique challenges resulting from the COVID–19 pandemic, FINRA believes that the proposed rule change is a sensible accommodation that will continue to afford firms the ability to ensure that critical positions are filled and client services maintained, while continuing to serve and promote the protection of investors and the public interest in this unique environment. B. Self-Regulatory Organization’s Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is intended solely to provide temporary relief given the impacts of the COVID–19 pandemic crisis.18 As a result of the temporary nature of the proposed relief, an abbreviated economic impact assessment is appropriate. 1. Economic Impact Assessment (a) Regulatory Objective FINRA is proposing this temporary relief to address the public health risks and corresponding challenges during the COVID–19 pandemic. Social distancing, quarantining and other similar requirements to promote the health and safety of citizens have resulted in serious interruptions in the administration of FINRA qualification examinations at Prometric test centers and the limited ability of individuals to sit for the examinations. In recognition of these extraordinary times, the proposed rule change would temporarily extend the time that individuals can function as a principal or Operations Professional without having successfully passed an appropriate qualification examination. (b) Economic Baseline As described above, FINRA Rules 1210.04 and 1220(b)(3)(B) allow firms to designate certain individuals to function in a principal or Operations Professional capacity for 120 calendar days before having to pass an appropriate principal qualification examination. As also described above, FINRA has provided temporary extensions to the 120-day period through FAQs, most recently in June 2020. Currently, approximately 157,000 individuals are registered as principals and approximately 36,000 are registered 18 See PO 00000 also Regulatory Notice 20–08 (March 2020). Frm 00130 Fmt 4703 Sfmt 4703 55537 as Operations Professionals. Additionally, FINRA estimates that approximately 6,000 individuals pass the General Securities Principal (Series 24) exam each year.19 (c) Economic Impact The proposed rule change is intended solely to provide a temporary mechanism for firms to address the difficulty of ensuring that the individuals whom they have designated to function in a principal or Operations Professional capacity are able to successfully sit for and pass an appropriate qualification examination within the 120-calendar day period required under the rules while the COVID–19 pandemic continues to pose health and safety risks. The proposed rule change is necessary to temporarily rebalance the attendant benefits and costs of the obligations under FINRA Rules 1210 and 1220 in response to the impacts of the COVID–19 pandemic. (1) Anticipated Benefits The benefits of the proposed temporary rule change will mainly accrue to those individuals who are operating as principals or Operations Professionals without having yet passed the appropriate qualification examinations, as permitted under FINRA rules, as these individuals will have additional time to pass their qualification examinations. The additional time provided to those individuals to pass the appropriate examinations will likely prevent any disruption to their employment associated with not meeting the examination requirement. Further, neither the principal examination nor the Operations Professional (Series 99) examination are available via remote testing. Therefore, the proposed temporary rule change will also allow those individuals to avoid any health risks (and resulting costs) associated with taking an in-person examination. Firms employing principals and Operations Professionals who have not yet passed their qualifying examinations will also benefit from continuity in their business operations. If those firms were required to prevent those individuals from functioning as principals or Operations Professionals, this would likely have spillover effects on firm procedures and services. Relatedly, investors at those firms will benefit from the resulting business continuity. 19 Statistic is based on average examination volume from 2017–2019. E:\FR\FM\08SEN1.SGM 08SEN1 55538 Federal Register / Vol. 85, No. 174 / Tuesday, September 8, 2020 / Notices (2) Anticipated Costs As previously stated, the public health risks stemming from the COVID– 19 pandemic have increased the costs associated with sitting for in-person qualification examinations. FINRA carefully considered the implications of extending the 120-calendar day period provided in FINRA Rules 1210.04 and 1220(b)(3)(B) and the potential for any downstream effects on retail investors and believes that there are potential negative spillover effects on investors if firms’ processes are interrupted, as noted above. Further, FINRA believes that any risk associated with the extension of time is mitigated by the fact that the extension is temporary and by members’ ongoing obligations to supervise the activities of associated persons. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 20 and Rule 19b– 4(f)(6) 21 thereunder. A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative for 30 days after the date of filing. However, pursuant to Rule 19b–4(f)(6)(iii), the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. FINRA has asked the Commission to waive the 30-day operative delay so that the proposed rule change may become operative immediately upon filing. As noted above, FINRA stated that the temporary proposed rule change will help minimize the impact of the COVID–19 outbreak on FINRA member 20 15 jbell on DSKJLSW7X2PROD with NOTICES U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. FINRA has satisfied this requirement. firms’ operations by allowing them to keep principal and Operations Professional positions filled and minimizing disruptions to client services and other critical responsibilities. The ongoing extenuating circumstances of the COVID–19 pandemic make it impractical to ensure that individuals designated to act in these capacities are able to take and pass the appropriate qualification examination during the 120-calendar day period required under the rules. Shelter-in-place orders, quarantining, restrictions on business and social activity and adherence to other social distancing guidelines consistent with the recommendation of public officials remain in place in various states.22 Further, FINRA states that Prometric test centers have experienced serious interruptions in the administration of FINRA qualification examinations, resulting in a backlog of individuals waiting to take these examinations. Following a nationwide closure of all test centers earlier in the year, some test centers have re-opened, but are operating at limited capacity or are only delivering certain examinations that have been deemed essential by the local government.23 FINRA has launched an online test delivery service to help address this backlog. However, the General Securities Principal (Series 24) and the Operations Professional (Series 99) Examinations are not available online. FINRA states that the temporary proposed rule change will provide needed flexibility to ensure that these positions remain filled and is tailored to address the constraints on member firms’ operations during the COVID–19 pandemic without significantly compromising critical investor protection.24 The Commission also notes that the proposal provides only temporary relief from the requirement to pass certain qualification examinations in within the 120-day period in the rules. As proposed, this relief would extend the 120-day period that certain individuals can function as principals or Operations Professionals through December 31, 2020. FINRA also noted that if it requires temporary relief from the rule requirements identified in this proposal beyond December 31, 2020, it may submit a separate rule filing to extend 21 17 VerDate Sep<11>2014 16:32 Sep 04, 2020 Jkt 250001 22 See supra note 14. supra notes 11 and 12. FINRA states that Prometric has also had to close some reopened test centers due to incidents of COVID–19 cases. 24 FINRA states that member firms remain subject to the continued requirement to supervise the activities of these designated individuals and ensure compliance with federal securities laws and regulations, as well as FINRA rules. 23 See PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 the effectiveness of the temporary relief under these rules.25 For these reasons, the Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.26 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– FINRA–2020–026 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–FINRA–2020–026. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). 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 25 See supra note 3. purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule change’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 26 For E:\FR\FM\08SEN1.SGM 08SEN1 Federal Register / Vol. 85, No. 174 / Tuesday, September 8, 2020 / Notices those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, on business days between the hours of 10:00 a.m. and 3:00 p.m., located at 100 F Street NE, Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of FINRA. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–FINRA–2020–026 and should be submitted on or before September 29, 2020. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 J. Matthew DeLesDernier, Assistant Secretary. In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. [FR Doc. 2020–19719 Filed 9–4–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89752; File No. SR– CboeBZX–2020–067] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update Rule 11.26(a), Stating It Will Utilize MEMX Market Data From the CQS/UQDF for Purposes of Order Handling, Routing, Execution, and Related Compliance Processes jbell on DSKJLSW7X2PROD with NOTICES September 2, 2020. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on August 19, 2020, Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. Cboe BZX Exchange, Inc. (‘‘BZX’’ or the ‘‘Exchange’’) proposes to update Rule 11.26(a), stating it will utilize MEMX market data from the CQS/UQDF for purposes of order handling, routing, execution, and related compliance processes. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://markets.cboe.com/us/ equities/regulation/rule_filings/bzx/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to update Rule 11.26(a) regarding the public disclosure of the sources of data that the Exchange utilizes when performing: (i) Order handling; (ii) order routing; (iii) order execution; and (iv) related compliance processes to reflect the operation of the MEMX as a registered national securities exchange. On May 4, 2020, the Commission approved MEMX’s application to register as a national securities exchange.4 MEMX announced that it plans to launch trading on September 4, 2020.5 The Exchange, therefore, proposes to update Rule 11.26(a) regarding the public disclosure of the sources of data that the Exchange utilizes when performing: (i) Order handling; (ii) order routing; (iii) order execution; and (iv) related compliance processes to reflect the operation of MEMX as a registered national securities exchange beginning on September 4, 2020. Specifically, the Exchange proposes to amend Rule 11.26(a) to include MEMX by stating it will utilize MEMX market data from the Consolidated Quotation System (‘‘CQS’’)/UTP Quotation Data Feed (‘‘UQDF’’) for purposes of order handling, routing, execution, and related compliance processes. The Exchange will not have a secondary source for data from MEMX. The Exchange proposes that this proposed rule change would be operative on the day that MEMX launches operations as an equities exchange, which is currently expected on September 4, 2020.6 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,7 in general, and furthers the objectives of Section 6(b)(5) of the Act,8 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange believes that its proposal to update Exchange Rule 11.26(a) to include MEMX will ensure that the Rule correctly identifies and publicly states on a market-by-market basis all of the specific network processor and proprietary data feeds that the Exchange utilizes for the handling, routing, and execution of orders, and for performing the regulatory compliance checks related to each of those functions. The proposed rule changes also remove impediments to and perfects the mechanism of a free and open market and protects investors and the public interest because it provides additional specificity, clarity and transparency. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes its proposed rule change would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes the 27 17 1 15 VerDate Sep<11>2014 16:32 Sep 04, 2020 4 See Securities Exchange Act No. 88806 (May 4, 2020) 85 FR 27451 (May 8, 2020). 5 See supra note 3 [sic]. Jkt 250001 PO 00000 Frm 00132 Fmt 4703 Sfmt 4703 55539 6 Id. 7 15 8 15 E:\FR\FM\08SEN1.SGM U.S.C. 78f. U.S.C. 78f(b)(5). 08SEN1

Agencies

[Federal Register Volume 85, Number 174 (Tuesday, September 8, 2020)]
[Notices]
[Pages 55535-55539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19719]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89732; File No. SR-FINRA-2020-026]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Temporarily Adopt (1) Supplementary Material 
.12 (Temporary Extension of the Limited Period for Registered Persons 
To Function as Principals) Under FINRA Rule 1210 and (2) Supplementary 
Material .07 (Temporary Extension of the Limited Period for Persons To 
Function as Operations Professionals) Under FINRA Rule 1220

September 1, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on August 28, 2020, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the self-regulatory 
organization. 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).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to adopt: (1) Temporary Supplementary Material 
.12 (Temporary Extension of the Limited Period for Registered Persons 
to Function as Principals) under FINRA Rule 1210 (Registration 
Requirements); and (2) temporary Supplementary Material .07 (Temporary 
Extension of the Limited Period for Persons to Function as Operations 
Professionals) under FINRA Rule 1220 (Registration Categories). The 
proposed rule change would extend the 120-day period that certain 
individuals can function as a principal or Operations Professional 
without having successfully passed an appropriate qualification 
examination through December 31, 2020.\3\
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    \3\ If FINRA seeks to provide additional temporary relief from 
the rule requirements identified in this proposed rule change beyond 
December 31, 2020, FINRA will submit a separate rule filing to 
further extend the temporary extension of time.
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    The text of the proposed rule change is available on FINRA's 
website at https://www.finra.org, at the principal office of FINRA and 
at the Commission's Public Reference Room.

[[Page 55536]]

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 self-regulatory organization 
included statements concerning the purpose of and basis for the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
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

1. Purpose
    The COVID-19 pandemic is an unpredictable, exogenous event that has 
resulted in unavoidable disruptions to the securities industry and 
impacted member firms, regulators, investors and other stakeholders. In 
response to COVID-19, earlier this year FINRA began providing temporary 
relief to member firms from FINRA rules and requirements via frequently 
asked questions (``FAQs'') on its website.\4\ Two of these FAQs \5\ 
provide temporary relief to address disruptions to the administration 
of FINRA qualification examinations caused by the pandemic that have 
significantly limited the ability of individuals to sit for these 
examinations due to Prometric test center capacity issues.\6\
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    \4\ See Frequently Asked Questions Related to Regulatory Relief 
Due to the Coronavirus Pandemic, available at https://www.finra.org/rules-guidance/key-topics/covid-19/faq.
    \5\ See https://www.finra.org/rules-guidance/key-topics/covid-19/faq#qe.
    \6\ At the outset of the COVID-19 pandemic, all FINRA 
qualification examinations were administered at test centers 
operated by Prometric. Based on the health and welfare concerns 
resulting from COVID-19, in March Prometric closed all of its test 
centers in the United States and Canada and began to slowly reopen 
some of them at limited capacity in May. At this time, not all of 
these Prometric test centers have reopened at full capacity.
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    FINRA published the first FAQ on March 20, 2020, providing that 
individuals whom were designated to function as principals under FINRA 
Rule 1210.04 prior to February 2, 2020, would be given until May 31, 
2020, to pass the appropriate principal qualification examination.\7\ 
On May 19, 2020, FINRA extended the relief to pass the appropriate 
examination until June 30, 2020. Most recently, on June 29, 2020, FINRA 
again extended the temporary relief providing that individuals who were 
designated to function as principals under FINRA Rule 1210.04 prior to 
May 4, 2020, would be given until August 31, 2020, to pass the 
appropriate principal qualification examination.\8\
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    \7\ FINRA Rule 1210.04 (Requirements for Registered Persons 
Functioning as Principals for a Limited Period) allows a member firm 
to designate certain individuals to function in a principal capacity 
for 120 calendar days before having to pass an appropriate principal 
qualification examination.
    \8\ See supra note 5.
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    FINRA published the second FAQ on May 15, 2020, providing that 
individuals whom were designated to function as Operations 
Professionals under FINRA Rule 1220(b)(3)(B) prior to February 2, 2020, 
would be given until June 30, 2020, to pass the applicable 
qualification examination.\9\ On June 29, 2020, FINRA extended the 
temporary relief providing that individuals who were designated to 
function as Operations Professionals under FINRA Rule 1220(b)(3)(B) 
prior to May 4, 2020, would be given until August 31, 2020, to pass the 
appropriate qualification examination.\10\
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    \9\ Pursuant to FINRA Rule 1220(b)(3)(B) (Qualifications), a 
person registering as an Operations Professional may function in 
that capacity for 120 days before having to pass an applicable 
qualification examination.
    \10\ See supra note 5.
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    FINRA continues to closely monitor the impact of the COVID-19 
pandemic on member firms, investors, and other stakeholders. One of the 
impacts of COVID-19 continues to be serious interruptions in the 
administration of FINRA qualification examinations at Prometric test 
centers and the limited ability of individuals to sit for the 
examinations.\11\ Although Prometric has begun reopening test centers, 
Prometric's safety practices mean that currently not all test centers 
are open, some of the open test centers are at limited capacity, and 
some open test centers are delivering only certain examinations that 
have been deemed essential by the local government.\12\ Furthermore, 
Prometric has had to close some reopened test centers due to incidents 
of COVID-19 cases. The initial nationwide closure in March along with 
the inability to fully reopen all Prometric test centers due to COVID-
19 have led to a significant backlog of individuals who are waiting to 
sit for FINRA examinations.\13\
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    \11\ Information about the continued impact of COVID-19 on 
FINRA-administered examinations is available at https://www.finra.org/rules-guidance/key-topics/covid-19/exams.
    \12\ Information from Prometric about its safety practices and 
the impact of COVID-19 on it operations is available at https://www.prometric.com/corona-virus-update. See also supra note 11.
    \13\ Although an online test delivery service has been launched 
to help address the backlog, the General Securities Principal Exam 
(Series 24) and the Operations Professional Exam (Series 99) are not 
available online. See supra note 11.
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    In addition, firms are continuing to experience operational 
challenges with much of their personnel working from home due to 
shelter-in-place orders, restrictions on businesses and social activity 
imposed in various states, and adherence to other social distancing 
guidelines consistent with the recommendations of public health 
officials.\14\ As a result, firms continue to face potentially 
significant disruptions to their normal business operations that may 
include a limitation of in-person activities and staff absenteeism as a 
result of the health and welfare concerns stemming from COVID-19. Such 
potential disruptions may be further exacerbated and may even affect 
client services if firms cannot continue to keep principal or 
Operations Professional positions filled as they may have difficulty 
finding other qualified individuals to transition into these roles or 
may need to reallocate employee time and resources away from other 
critical responsibilities at the firm.
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    \14\ See, e.g., Centers for Disease Control and Prevention, How 
to Protect Yourself & Others, https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/prevention.html.
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    These ongoing, extenuating circumstances make it impracticable for 
member firms to ensure that the individuals whom they have designated 
to function in a principal or Operations Professional capacity, as set 
forth in FINRA Rules 1210.04 and 1220(b)(3)(B), are able to 
successfully sit for and pass an appropriate qualification examination 
within the 120-calendar day period required under the rules, or to find 
other qualified staff to fill these positions. The ongoing 
circumstances also require individuals to be exposed to the health 
risks associated with taking an in-person examination, because the 
General Securities Principal and Operations Professional examinations 
are not available online. Therefore, FINRA is proposing to continue the 
temporary relief provided through the FAQs by adopting Rules 1210.12 
and 1220.07 to extend the 120-day period during which an individual can 
function as a principal or Operations Professional before having to 
pass an applicable qualification examination until December 31, 
2020.\15\ The proposed rule change would apply only to those 
individuals who were designated to function as a principal or

[[Page 55537]]

Operations Professional prior to September 3, 2020. Any individuals 
designated to function as a principal or Operations Professional on or 
after September 3, 2020, would need to successfully pass an appropriate 
qualification examination within 120 days.\16\
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    \15\ See supra note 3.
    \16\ FINRA notes that the proposed rule change would impact 
members that have elected to be treated as capital acquisition 
brokers (``CABs''), given that the CAB rule set incorporates the 
impacted FINRA rules by reference.
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    FINRA believes that this proposed continued extension of time is 
tailored to address the needs and constraints on a firm's operations 
during the COVID-19 pandemic, without significantly compromising 
critical investor protection. The proposed extension of time will help 
to minimize the impact of COVID-19 on firms by providing continued 
flexibility so that firms can ensure that principal and Operations 
Professional positions remain filled. The potential risks from the 
proposed extension of the 120-day period are mitigated by the firm's 
continued requirement to supervise the activities of these designated 
individuals and ensure compliance with federal securities laws and 
regulations, as well as FINRA rules.
    FINRA has filed the proposed rule change for immediate 
effectiveness and has requested that the SEC waive the requirement that 
the proposed rule change not become operative for 30 days after the 
date of the filing, so FINRA can implement the proposed rule change 
immediately.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\17\ which requires, among 
other things, that FINRA rules must be 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.
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    \17\ 15 U.S.C. 78o-3(b)(6).
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    The proposed rule change is intended to minimize the impact of 
COVID-19 on firm operations by further extending the 120-day period 
certain individuals may function as a principal or Operations 
Professional without having successfully passed an appropriate 
qualification examination under FINRA Rules 1210.04 and 1220(b)(3)(B) 
until December 31, 2020. The proposed rule change does not relieve 
firms from maintaining, under the circumstances, a reasonably designed 
system to supervise the activities of their associated persons to 
achieve compliance with applicable securities laws and regulations, and 
with applicable FINRA rules that directly serve investor protection. In 
a time when faced with unique challenges resulting from the COVID-19 
pandemic, FINRA believes that the proposed rule change is a sensible 
accommodation that will continue to afford firms the ability to ensure 
that critical positions are filled and client services maintained, 
while continuing to serve and promote the protection of investors and 
the public interest in this unique environment.

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

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change is 
intended solely to provide temporary relief given the impacts of the 
COVID-19 pandemic crisis.\18\ As a result of the temporary nature of 
the proposed relief, an abbreviated economic impact assessment is 
appropriate.
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    \18\ See also Regulatory Notice 20-08 (March 2020).
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1. Economic Impact Assessment
(a) Regulatory Objective
    FINRA is proposing this temporary relief to address the public 
health risks and corresponding challenges during the COVID-19 pandemic. 
Social distancing, quarantining and other similar requirements to 
promote the health and safety of citizens have resulted in serious 
interruptions in the administration of FINRA qualification examinations 
at Prometric test centers and the limited ability of individuals to sit 
for the examinations. In recognition of these extraordinary times, the 
proposed rule change would temporarily extend the time that individuals 
can function as a principal or Operations Professional without having 
successfully passed an appropriate qualification examination.
(b) Economic Baseline
    As described above, FINRA Rules 1210.04 and 1220(b)(3)(B) allow 
firms to designate certain individuals to function in a principal or 
Operations Professional capacity for 120 calendar days before having to 
pass an appropriate principal qualification examination. As also 
described above, FINRA has provided temporary extensions to the 120-day 
period through FAQs, most recently in June 2020.
    Currently, approximately 157,000 individuals are registered as 
principals and approximately 36,000 are registered as Operations 
Professionals. Additionally, FINRA estimates that approximately 6,000 
individuals pass the General Securities Principal (Series 24) exam each 
year.\19\
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    \19\ Statistic is based on average examination volume from 2017-
2019.
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(c) Economic Impact
    The proposed rule change is intended solely to provide a temporary 
mechanism for firms to address the difficulty of ensuring that the 
individuals whom they have designated to function in a principal or 
Operations Professional capacity are able to successfully sit for and 
pass an appropriate qualification examination within the 120-calendar 
day period required under the rules while the COVID-19 pandemic 
continues to pose health and safety risks. The proposed rule change is 
necessary to temporarily rebalance the attendant benefits and costs of 
the obligations under FINRA Rules 1210 and 1220 in response to the 
impacts of the COVID-19 pandemic.
(1) Anticipated Benefits
    The benefits of the proposed temporary rule change will mainly 
accrue to those individuals who are operating as principals or 
Operations Professionals without having yet passed the appropriate 
qualification examinations, as permitted under FINRA rules, as these 
individuals will have additional time to pass their qualification 
examinations. The additional time provided to those individuals to pass 
the appropriate examinations will likely prevent any disruption to 
their employment associated with not meeting the examination 
requirement. Further, neither the principal examination nor the 
Operations Professional (Series 99) examination are available via 
remote testing. Therefore, the proposed temporary rule change will also 
allow those individuals to avoid any health risks (and resulting costs) 
associated with taking an in-person examination.
    Firms employing principals and Operations Professionals who have 
not yet passed their qualifying examinations will also benefit from 
continuity in their business operations. If those firms were required 
to prevent those individuals from functioning as principals or 
Operations Professionals, this would likely have spillover effects on 
firm procedures and services. Relatedly, investors at those firms will 
benefit from the resulting business continuity.

[[Page 55538]]

(2) Anticipated Costs
    As previously stated, the public health risks stemming from the 
COVID-19 pandemic have increased the costs associated with sitting for 
in-person qualification examinations. FINRA carefully considered the 
implications of extending the 120-calendar day period provided in FINRA 
Rules 1210.04 and 1220(b)(3)(B) and the potential for any downstream 
effects on retail investors and believes that there are potential 
negative spillover effects on investors if firms' processes are 
interrupted, as noted above. Further, FINRA believes that any risk 
associated with the extension of time is mitigated by the fact that the 
extension is temporary and by members' ongoing obligations to supervise 
the activities of associated persons.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \20\ and Rule 19b-
4(f)(6) \21\ thereunder.
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    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
FINRA has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
pursuant to Rule 19b-4(f)(6)(iii), the Commission may designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. FINRA has asked the Commission to 
waive the 30-day operative delay so that the proposed rule change may 
become operative immediately upon filing. As noted above, FINRA stated 
that the temporary proposed rule change will help minimize the impact 
of the COVID-19 outbreak on FINRA member firms' operations by allowing 
them to keep principal and Operations Professional positions filled and 
minimizing disruptions to client services and other critical 
responsibilities. The ongoing extenuating circumstances of the COVID-19 
pandemic make it impractical to ensure that individuals designated to 
act in these capacities are able to take and pass the appropriate 
qualification examination during the 120-calendar day period required 
under the rules. Shelter-in-place orders, quarantining, restrictions on 
business and social activity and adherence to other social distancing 
guidelines consistent with the recommendation of public officials 
remain in place in various states.\22\ Further, FINRA states that 
Prometric test centers have experienced serious interruptions in the 
administration of FINRA qualification examinations, resulting in a 
backlog of individuals waiting to take these examinations. Following a 
nationwide closure of all test centers earlier in the year, some test 
centers have re-opened, but are operating at limited capacity or are 
only delivering certain examinations that have been deemed essential by 
the local government.\23\ FINRA has launched an online test delivery 
service to help address this backlog. However, the General Securities 
Principal (Series 24) and the Operations Professional (Series 99) 
Examinations are not available online. FINRA states that the temporary 
proposed rule change will provide needed flexibility to ensure that 
these positions remain filled and is tailored to address the 
constraints on member firms' operations during the COVID-19 pandemic 
without significantly compromising critical investor protection.\24\
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    \22\ See supra note 14.
    \23\ See supra notes 11 and 12. FINRA states that Prometric has 
also had to close some reopened test centers due to incidents of 
COVID-19 cases.
    \24\ FINRA states that member firms remain subject to the 
continued requirement to supervise the activities of these 
designated individuals and ensure compliance with federal securities 
laws and regulations, as well as FINRA rules.
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    The Commission also notes that the proposal provides only temporary 
relief from the requirement to pass certain qualification examinations 
in within the 120-day period in the rules. As proposed, this relief 
would extend the 120-day period that certain individuals can function 
as principals or Operations Professionals through December 31, 2020. 
FINRA also noted that if it requires temporary relief from the rule 
requirements identified in this proposal beyond December 31, 2020, it 
may submit a separate rule filing to extend the effectiveness of the 
temporary relief under these rules.\25\ For these reasons, the 
Commission believes that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Accordingly, the Commission hereby waives the 30-day operative delay 
and designates the proposal operative upon filing.\26\
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    \25\ See supra note 3.
    \26\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-FINRA-2020-026 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-FINRA-2020-026. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
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

[[Page 55539]]

those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, on business days 
between the hours of 10:00 a.m. and 3:00 p.m., located at 100 F Street 
NE, Washington, DC 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of FINRA. All 
comments received will be posted without change.
    Persons submitting comments are cautioned that we do not redact or 
edit personal identifying information from comment submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-FINRA-2020-026 
and should be submitted on or before September 29, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-19719 Filed 9-4-20; 8:45 am]
BILLING CODE 8011-01-P
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