Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change To Amend FINRA Rules 1210 (Registration Requirements) and 1240 (Continuing Education Requirements), 53358-53365 [2021-20818]
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Federal Register / Vol. 86, No. 184 / Monday, September 27, 2021 / Notices
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–20817 Filed 9–24–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93097; File No. SR–FINRA–
2021–015]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Order Approving a
Proposed Rule Change To Amend
FINRA Rules 1210 (Registration
Requirements) and 1240 (Continuing
Education Requirements)
September 21, 2021.
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I. Introduction
On June 3, 2021, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (‘‘SEC’’ or
‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend FINRA Rules 1240
(Continuing Education Requirements)
and 1210 (Registration Requirements)
to, among other things, (1) require that
the Regulatory Element of FINRA’s
continuing education program for
registered persons of FINRA members
(‘‘CE Program’’) be tailored to each
registration category and completed
annually rather than every three years
and (2) provide a way for individuals to
maintain their qualifications following
the termination of registration through
continuing education. The proposed
rule change was published for comment
in the Federal Register on June 24,
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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2021.3 On July 23, 2021, FINRA
consented to extend until September 22,
2021, the time period in which the
Commission must approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to approve or
disapprove the proposed rule change.4
On August 12, 2021, FINRA responded
to the comment letters received in
response to the Notice.5 This order
approves the proposed rule change.
II. Description of the Proposed Rule
Change
A. Background
As discussed in the Notice, FINRA’s
CE Program is codified under Rule 1240.
The CE Program currently requires
registered persons to complete
continuing education consisting of a
Regulatory Element and a Firm
Element.6 The Regulatory Element,
which is administered by FINRA,
focuses on regulatory requirements and
industry standards,7 while the Firm
Element is provided by each firm and
focuses on, among other things,
securities products, services and
strategies the firm offers, firm policies,
and industry trends.8 FINRA is
proposing to amend Rule 1240 and
make conforming amendments to Rule
1210 to modify aspects of both the
Regulatory Element and the Firm
Element.9
3 See Exchange Act Release No. 92183 (Jun. 15,
2021), 86 FR 33427 (Jun. 24, 2021) (File No. SR–
FINRA–2021–015) (‘‘Notice’’).
4 See letter from Afshin Atabaki, Special Advisor
and Associate General Counsel, FINRA, to Edward
Schellhorn, Special Counsel, Division of Trading
and Markets, Commission, dated July 23, 2021. This
letter is available at https://www.finra.org/sites/
default/files/2021-07/SR-FINRA-2021-015Extension1.pdf.
5 See letter from Afshin Atabaki, Special Advisor
and Associate General Counsel, FINRA, to Vanessa
Countryman, Secretary, Commission, dated August
12, 2021, 2021 (‘‘FINRA Letter’’). The FINRA Letter
is available at https://www.sec.gov/comments/srfinra-2021-015/srfinra2021015-9135950247347.pdf.
6 See FINRA Rule 1240. See also FINRA Rule
1210.07 (All Registered Persons Must Satisfy the
Regulatory Element of Continuing Education).
7 FINRA’s website describes the Regulatory
Element as being focused on compliance,
regulatory, ethical and sales practice standards.
According to FINRA, its content is derived from
industry rules and regulations, and accepted
standards and practices in the industry. Moreover,
participants must demonstrate proficiency in order
to satisfy the continuing education requirements.
See https://www.finra.org/registration-exams-ce/
continuing-education#regulatory.
8 See Notice, 86 FR at 33428.
9 FINRA stated that the proposed rule change was
developed in close consultation with the Securities
Industry/Regulatory Council (‘‘CE Council’’) and
discussions with stakeholders, including the North
American Securities Administrators Association
(‘‘NASAA’’). Specifically, FINRA stated that the
proposed changes to the CE Program are based in
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In addition, FINRA stated in the
Notice that it and the CE Council also
plan to enhance the CE Program in other
ways that do not require changes to
FINRA’s rules.10 Among other things,
FINRA and the CE Council will work
together to incorporate a variety of
instructional formats (including a
mobile-compatible format) and provide
firms with advance notice of Regulatory
Element topics as well as additional
resources and guidance to help firms
develop effective Firm Element training
programs.11
B. Transition to an Annual Regulatory
Element for Each Registration Category
Currently, FINRA Rule 1240(a)
initially requires a registered person to
complete the applicable Regulatory
Element within 120 days after the
person’s second registration anniversary
date and, thereafter, within 120 days
after every third registration anniversary
date.12 FINRA’s proposed rule change
would amend FINRA Rule 1240(a) and
Rule 1210.07 to require registered
persons to complete the Regulatory
Element of the CE Program annually by
December 31. Firms, however, would
have the flexibility to require their
registered persons to complete the
Regulatory Element sooner than
December 31, which would allow firms
to coordinate the timing of the
Regulatory Element with other training
requirements, including the Firm
Element.13 Similarly, the proposed rule
change would preserve FINRA’s ability
to extend the time by which a registered
person must complete the Regulatory
Element for good cause shown if
requested in writing and with
supporting documentation.14 Consistent
part on the CE Council’s September 2019
recommendations to enhance the CE Program. See
Notice, 86 FR at 33429.
10 See Notice, 86 FR at 33428.
11 See id.
12 See FINRA Rule 1240(a)(1).
13 See Notice, 86 FR at 33429. FINRA also stated
that individuals who would be registering as a
representative or principal for the first time on or
after the implementation date of the proposed rule
change would be required to complete their initial
Regulatory Element for that registration category in
the next calendar year following their registration.
In addition, subject to specified conditions,
individuals who would be reregistering as a
representative or principal on or after the
implementation date of the proposed rule change
would also be required to complete their initial
Regulatory Element for that registration category in
the next calendar year following their reregistration.
See id. at 33429.
14 See proposed Rule 1240(a)(2). See also Notice,
86 FR at 33429. FINRA may also grant conditional
examination waivers requiring individuals to
complete the Regulatory Element by a specified
date. Non-registered individuals who are
participating in the Financial Services Affiliate
Waiver Program (‘‘FSAWP’’) under Rule 1210.09
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with current requirements, individuals
who fail to complete their Regulatory
Element within the prescribed period
would be automatically designated as
‘‘CE inactive’’ 15 in the Central
Registration Depository (‘‘CRD’’)
system 16 until the requirements of the
Regulatory Element have been
satisfied.17
FINRA stated that the current content
of the Regulatory Element is broad in
nature, applying to both representatives
and principals in a single format that
leads individuals through a story
depicting scenarios that they may
encounter in the course of their work.18
The proposed rule change would
instead tailor the content of the
Regulatory Element to each registration
category. Thus, registered persons
would be required to complete content
specifically designed for each
representative or principal registration
category that they hold.19
FINRA’s proposed rule change also
proposes to amend Rule 1240(a) to
include five additional elements such
that: (1) Individuals who are designated
as CE inactive would be required to
complete all of their pending and
upcoming annual Regulatory Element,
including any annual Regulatory
(‘‘FSAWP Participants’’) are also subject to the
Regulatory Element. See Notice, 86 FR at 33428.
15 See proposed Rule 1240(a)(2). A CE inactive
person is prohibited from performing, or being
compensated for, any activities requiring FINRA
registration, including supervision. Additionally, if
registered persons remain CE inactive for two
consecutive years, they must requalify by retaking
required examinations (or obtain a waiver of the
applicable qualification examinations). See Notice,
86 FR at 33428.
16 See https://www.finra.org/registration-examsce/classic-crd. As stated on the website, FINRA
integrated the registration filing functionality that
supports the CRD Program into FINRA Gateway,
available at https://www.finra.org/filing-reporting/
finra-gateway. The standalone CRD features were
retired August 21, 2021.
17 See Notice, 86 FR at 33428.
18 See id. FINRA stated that the Regulatory
Element currently consists of a subprogram for
registered persons generally, and a subprogram for
principals and supervisors. According to FINRA,
while some of the current Regulatory Element
content is unique to particular registration
categories, most of the content has broad
application to both representatives and principals.
FINRA also stated that the Regulatory Element was
originally designed at a time when most individuals
had to complete the Regulatory Element at a test
center, and its design was shaped by the limitations
of the test center-based delivery model. Since 2015,
FINRA has transitioned the delivery of the
Regulatory Element to an online platform (‘‘CE
Online’’), which allows individuals to complete the
content online at a location of their choosing,
including their private residence. According to
FINRA, the transition to CE Online has enhanced
FINRA’s ability to update continuing education
content in a timelier fashion and to develop content
that is tailored to each registration category as well
as to present the materials in an optimal learning
format. See id.
19 See proposed Rules 1240(a)(1) and (a)(4).
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Element that becomes due during their
CE inactive period, to return to active
status; 20 (2) the two-year CE inactive
period would be calculated from the
date individuals become CE inactive,
and would continue to run regardless of
whether individuals terminate their
registrations; 21 (3) individuals who
become subject to a significant
disciplinary action may be required to
complete assigned continuing education
content as prescribed by FINRA; 22 (4)
individuals who have not completed
any Regulatory Element content for a
registration category in the calendar
year(s) prior to reregistering would not
be approved for registration for that
category until they complete that
Regulatory Element content, pass an
examination for that registration
category, or obtain an unconditional
examination waiver for that registration
category, whichever is applicable; 23 and
(5) the Regulatory Element requirements
would apply to individuals who are
registered, or are in the process of
registering as a representative or
principal.24
FINRA stated that moving to an
annual Regulatory Element requirement
that is tailored to each registration
category would further the goals of the
Regulatory Element by helping ensure
that registered persons are better trained
in more recent regulatory issues,
allowing them to perform their work in
a more compliant and effective
manner.25 For instance, FINRA stated
that transitioning to an annual
Regulatory Element cycle would help
ensure that registered persons receive
more frequent assessments on current
issues and better understand recent
regulatory changes.26 Specifically,
FINRA stated that registered persons
would be current on issues and
regulatory changes that would enable
them to perform their work in a more
compliant and effective manner than
would otherwise be possible with
Regulatory Element training taking
place only once every three years under
the current CE Program.27 According to
FINRA, this enhanced timeliness and
relevance of the Regulatory Element
would reduce firms’ regulatory risk as
well as enhancing compliance and
reducing compliance-related costs.28
20 See
Notice, 86 FR at 33429–30.
Notice, 86 FR at 33430.
22 See id.
23 See Notice, 86 FR at 33430.
24 See id.
25 See Notice, 86 FR at 33434.
26 See id.
27 See id.
28 See id.
21 See
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53359
C. Recognition of Other Training
Requirements for Firm Element and
Extension of Firm Element to All
Registered Persons
Currently, Rule 1240(b) requires a
firm to develop and administer an
annual Firm Element training program
for its covered registered persons.29 The
Firm Element must, at a minimum,
include training in ethics and
professional responsibility, as well as
training in the following items
concerning securities products, services,
and strategies offered by the member: (1)
General investment features and
associated risk factors; (2) suitability
and sales practice considerations; and
(3) applicable regulatory
requirements.30 Firms are required to
conduct an annual needs analysis to, at
minimum, determine the appropriate
Firm Element training for covered
registered persons at the firm based on
the specific business of the member, and
then provide the Firm Element training
annually.31 The current rule does not
expressly recognize other required
training, such as training relating to the
anti-money laundering (‘‘AML’’)
compliance program and training
relating to the annual compliance
meeting, for purposes of satisfying the
Firm Element training.32
FINRA’s proposed rule change would
amend Rule 1240(b) to allow for
recognition of the successful completion
of existing firm training programs
relating to the AML compliance
program and the annual compliance
meeting toward satisfying an
individual’s annual Firm Element
requirement.33 The proposed rule
change would also amend the rule to
extend the Firm Element requirement to
all registered persons, including
individuals who maintain solely a
permissive registration consistent with
Rule 1210.02, thereby further aligning
the Firm Element requirement with
other broadly-based training
requirements.34 FINRA also is
29 See Rule 1240(b). See also Notice, 86 FR at
33428. The rule defines ‘‘covered registered
persons’’ as any registered person who has direct
contact with customers in the conduct of a
member’s securities sales, trading and investment
banking activities, any individual who is registered
as an Operations Professional or a Research
Analyst, and the immediate supervisors of any such
persons. See Rule 1240(b)(1).
30 See Rule 1240(b). See also Notice, 86 FR at
33428.
31 See Rule 1240(b). See also Notice, 86 FR at
33428.
32 See Rule 3310(e) and Rule 3110(a)(7). See also
Notice, 86 FR at 33429.
33 See proposed Rule 1240(b)(2)(D). See also
Notice, 86 FR at 33430.
34 See proposed Rule 1240(b)(1). See also Notice,
86 FR at 33430.
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proposing to modify the current
minimum training criteria under Rule
1240(b) to provide that Firm Element
training must cover topics related to the
role, activities, or responsibilities of the
registered person, as well as
professional responsibility.35
FINRA stated that the proposed rule
change would further enhance and
streamline the Firm Element
requirement.36 Specifically, FINRA
stated that the inclusion of an express
recognition of existing firm training
programs, such as the annual
compliance meeting or AML training,
toward satisfying an individual’s Firm
Element requirement would help firms
conserve compliance resources
currently devoted to duplicative
training programs.37 Additionally,
FINRA stated that the extension of the
Firm Element requirement to all
registered persons would help ensure
that firms enhance the securities
knowledge, skill, and professionalism of
all registered persons.38 FINRA stated
that it would also ensure that registered
persons are provided more specific
learning materials relevant to their dayto-day activities.39
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D. Maintenance of Qualification After
Termination of Registration
Currently, individuals whose
registrations as representatives or
principals have been terminated for two
or more years may reregister as
representatives or principals only if they
requalify by retaking and passing the
applicable representative- or principallevel examination or if they obtain a
waiver of such examination(s) (the
‘‘two-year qualification period’’).40 The
proposed rule change would not
eliminate the two-year qualification
period. Instead, the proposed rule
change would amend the rules
governing requalification of registered
representatives who have terminated
their registration to provide individuals
an alternative means of maintaining
their qualifications and staying current
on their regulatory and securities
knowledge following the termination of
a registration, subject to conditions and
35 See proposed Rule 1240(b)(2)(B). See also
Notice, 86 FR at 33430.
36 See Notice, 86 FR at 33434.
37 See id.
38 See Notice, 86 FR at 33438.
39 See id.
40 See Rule 1210.08 (Lapse of Registration and
Expiration of SIE). FINRA also stated that the
current two-year qualification period before an
individual would need to retest and pass their
examinations was adopted prior to the creation of
the CE Program and was intended to ensure that
individuals who reregister are relatively current on
their regulatory and securities knowledge. See
Notice, 86 FR at 33429.
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limitations outlined in further detail
below.41
Specifically, the proposed rule change
would adopt paragraph (c) under Rule
1240, and Supplementary Material .01
and .02 to Rule 1240, to provide eligible
individuals who terminate any of their
representative or principal registrations
the option of maintaining their
qualification for any of the terminated
registrations for up to five years by
completing continuing education.42
This optional program would be limited
by the following conditions: (1)
Individuals would be required to be
registered in the terminated category for
at least one year immediately prior to
the termination of the category; 43 (2)
individuals could elect to participate
when they terminate a registration or
within two years from the termination
of a registration; 44 (3) individuals
would be required to complete annually
all prescribed continuing education; 45
(4) individuals would have a maximum
of five years in which to reregister; 46 (5)
individuals who have been CE inactive
for two consecutive years, or who
become CE inactive for two consecutive
years during their participation, would
not be eligible to participate or
continue; 47 and (6) individuals who are
subject to a statutory disqualification, or
who become subject to a statutory
disqualification following the
termination of their registration or
during their participation, would not be
eligible to participate in, or continue
with, the program.48
41 See Notice, 86 FR at 33430. Eligible individuals
who elect not to participate in the proposed
continuing education program to maintain their
qualifications would continue to be subject to the
two-year qualification period.
42 See proposed Rule 1240(c) and Supplementary
Material .01 and .02 to Rule 1240. See also Notice,
86 FR at 33430.
43 See Notice, 86 FR at 33430.
44 See id. FINRA stated that individuals who elect
to participate at the later date would be required to
complete, within two years from the termination of
their registration, any continuing education that
becomes due between the time of their Form U5
submission and the date that they commence their
participation. In addition, FINRA stated that it
plans to enhance its systems to notify individuals
of their eligibility to participate, enable them to
affirmatively opt in, and notify them of their annual
continuing education requirement if they opt in.
See id.
45 See Notice, 86 FR at 33431. FINRA’s proposed
rule change would also allow FINRA to grant an
extension of time for the participant to complete the
prescribed continuing education following a
participant’s request in writing with supporting
documentation and a showing of good cause. See
id.
46 See Notice, 86 FR at 33431.
47 See id.
48 See id. In addition, FINRA stated that any
continuing education content completed in
furtherance of this proposed program would be
retroactively nullified upon disclosure of the
statutory disqualification. See id.
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FINRA also is proposing two
additional provisions in the proposed
rule change. The first is a look-back
provision that would, subject to
specified conditions, extend the
application of the proposed five-year
option to individuals who have been
registered as a representative or
principal within two years immediately
prior to the implementation date of the
proposed rule change and individuals
who have been FSAWP Participants
immediately prior to the
implementation date of the proposed
rule change.49 The second is a reeligibility provision that would allow
individuals to regain eligibility to
participate in the proposed five-year
continuing education option each time
they reregister with a firm for a period
of at least one year and subsequently
terminate their registration, provided
that they satisfy the other participation
conditions and limitations.50
FINRA also is proposing conforming
amendments to Rule 1210, including
adding references to proposed Rule
1240(c) under Rule 1210.08.51
According to FINRA, the continuing
education content for participants of the
proposed five-year continuing education
option would consist of a combination
of Regulatory Element content and
content selected by FINRA and the CE
Council from the Firm Element content
catalog discussed further below.52 The
content would correspond to the
registration category for which
individuals wish to maintain their
qualifications.53 The proposed rule
change would also provide that the
continuing education content for
participants of the proposed five-year
continuing education option must be
completed annually by December 31
49 See Notice, 86 FR at 33431. Among other
things, proposed Supplementary Material .01 to
Rule 1240 and proposed Rule 1210.09 would
provide the requirements and limitations to
participation in this optional five-year continuing
education period for FSAWP Participants,
including when they would need to elect to
participate, when they would need to complete
their initial annual content, and adjustment of their
initial participation period based on the date that
their registration was terminated. Additionally,
FINRA stated that while the current waiver program
for FSAWP Participants would not be available to
new participants upon implementation of the
proposed rule change, individuals who are FSAWP
Participants immediately prior to the
implementation date of the proposed rule change
could elect to continue in that waiver program until
the program has been retired. The proposed rule
change would preserve FINRA’s ability to extend
the time by which FSAWP Participants must
complete the Regulatory Element for good cause
shown under proposed Rule 1240(a)(2). See Notice,
86 FR at 33431.
50 See Notice, 86 FR at 33431.
51 See id.
52 See id.
53 See id.
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each year, consistent with the proposed
annual Regulatory Element provision.54
In addition, FINRA stated that
participants who are maintaining their
qualification status for a principal
registration category that includes one
or more corequisite representative
registrations would also need to
complete required annual continuing
education for the corequisite
registrations in order to maintain their
qualification status for the principal
registration category.55
FINRA stated that the proposed rule
change would: (1) Incentivize
individuals to stay current on their
respective securities industry
knowledge following the termination of
any of their registrations; (2) promote
investor protection given that the
individuals availing themselves of this
optional program would be subjected to
continuing education that is as rigorous
as the continuing education of
registered persons, while providing an
opportunity for the securities industry
to retain skilled and experienced
workers; (3) increase flexibility for
individuals to address life and career
events and necessary absences from
registered functions without having to
requalify each time; and (4) enhance
diversity and inclusion in the securities
industry by attracting and retaining a
broader and diverse group of
professionals.56 FINRA has also stated
that it plans to evaluate the efficacy of
the proposed rule change following its
implementation to ensure that it is
meeting its goals.57
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E. Other Enhancements to the CE
Program
FINRA stated in the Notice that it
intends to make additional
enhancements to the CE Program that
will not require changes to FINRA
rules.58 FINRA stated that it would work
with the CE Council to incorporate a
variety of instructional formats to
present the Regulatory Element content,
including via a mobile compatible
54 See id. See also supra note 11 and
accompanying text.
55 See Notice, 86 FR at 33431.
56 See Notice, 86 FR at 33431, 33435. According
to FINRA, the proposed rule change may be of
particular value to women and older workers.
FINRA stated that women continue to be the
primary caregivers for children and aging family
members and, as a result, are likely to be absent
from the industry for longer periods of time than
men. Additionally, FINRA stated that the proposed
rule change would provide longer-term relief for
older workers, who are at a higher risk of a job loss
during certain economic downturns and who are
likely to remain unemployed for longer periods of
time than younger workers. See Notice, 86 FR at
33431.
57 See Notice, 86 FR at 33431.
58 See Notice, 86 FR at 33432.
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application.59 In addition, FINRA stated
that it would work with the CE Council
to publish in advance the Regulatory
Element learning topics for the next year
so that firms may review those topics
when developing their Firm Element
training plan to avoid unnecessary
duplication of topics if desired.60 Given
that the proposed rule change would
transition to an annual Regulatory
Element requirement, FINRA stated that
it would assist firms with compliance
with that requirement by enhancing its
systems to provide firms and registered
persons with additional notification,
management, and tracking
functionality.61
FINRA also stated that it would
improve the guidance and resources
available to firms to develop effective
Firm Element training programs, such as
updated guidance for developing and
documenting training plans and specific
principles.62 Further, FINRA stated that
it would work with the CE Council to
develop a catalog of continuing
education content that would serve as
an optional resource for firms to select
relevant Firm Element content and
create learning plans for their registered
persons.63 According to FINRA, the
catalog would include content
developed by third-party training
providers, FINRA, and the other SelfRegulatory Organizations participating
in the CE Program.64
F. Effective Date
If the Commission approves the
proposed rule change, FINRA will
announce the implementation dates of
the proposed rule change in a
Regulatory Notice to be published no
later than 90 days following
Commission approval.65
59 See id. In response to a Regulatory Notice that
FINRA issued concerning proposed changes to the
CE Program, it received a comment letter
encouraging FINRA to make continuing education
available via a mobile application. FINRA stated
that it intends to take that suggestion and plans to
make the Regulatory Element content available via
a mobile application. See FINRA Letter at 2–3.
60 See Notice, 86 FR at 33432.
61 See id. FINRA stated that the transition to an
annual Regulatory Element requirement would have
the effect of increasing the number of registered
persons who would be required to complete the
Regulatory Element on an annual basis. As such,
FINRA stated that the enhancement of notification,
modification, and tracking functionality in its
systems will be helpful for firms and individuals.
See Notice, 86 FR at 33432.
62 See Notice, 86 FR at 33432.
63 See Notice, 86 FR at 33432, 33434. FINRA
stated that firms would have the option of using the
content in this catalog for purposes of their Firm
Element training and would not be obligated to
select content from the catalog.
64 See Notice, 86 FR at 33432.
65 See id.
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53361
III. Discussion and Commission
Findings
After careful review of the proposed
rule change, the comment letters, and
FINRA’s response to the comments, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Exchange Act and
the rules and regulations thereunder
that are applicable to a national
securities association.66 Specifically, the
Commission finds that the proposed
rule change is consistent with Section
15A(b)(6) of the Exchange Act, which
requires, among other things, that
FINRA rules 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.67
A. Transition to Annual Regulatory
Element for Each Registration Category
As stated above, FINRA is proposing
to amend Rule 1240(a) and Rule 1210.07
to require registered persons to
complete the Regulatory Element of the
CE Program annually by December 31
and to require registered persons to
complete the Regulatory Element
content that is tailored for each
representative or principal registration
category that they hold.
Most commenters were supportive of
FINRA’s proposed rule change.68 One
such commenter stated that it
appreciated that member firms would be
allowed greater flexibility to administer
the Regulatory Element in conjunction
with other training requirements.69
Another cited: (1) The flexibility it
would afford in allowing firms to
complete training prior to December 31;
(2) its availability to individuals via
mobile application; and (3) that the
proposed Regulatory Element would
still require a comparable amount of
overall continuing education as it did
prior to the proposed rule change.70
66 In approving this rule change, the Commission
has considered the rule’s impact on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
67 15 U.S.C. 78o–3(b)(6).
68 See letter from James Rabenstine, Vice
President and Chief Compliance Officer,
Nationwide Office of the Chief Legal Officer,
Nationwide Financial Services, Inc. (‘‘NFS’’), dated
July 13, 2021 (‘‘NFS Letter’’); letter from Lisa
Hopkins, NASAA President, General Counsel, and
Senior Deputy Commissioner of Securities, West
Virginia, NASAA, dated July 14, 2021 (‘‘NASAA
Letter’’); letter from Kevin Zambrowicz, Managing
Director and Associate General Counsel, Securities
Industry and Financial Markets Association
(‘‘SIFMA’’), dated July 14, 2021 (‘‘SIFMA Letter’’).
69 See SIFMA Letter at 2.
70 See NFS Letter at 1. The NFS Letter also
suggested that it would be helpful for the
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One commenter, although generally
supportive of the proposed rule change,
expressed concern that moving to an
annual Regulatory Element may
increase overall costs and burdens, both
for firms and registered persons,
associated with an annual increase in
required training.71 The commenter also
suggested that the proposed transition
from the current three-year cycle to an
annual requirement may not be
necessary.72 Alternatively, the
commenter suggested that any transition
be done in two phases: (1) From three
years to two years to determine if its
objectives were met; and then (2) from
two years to one year.73
In response, FINRA stated that the
overall amount of training in a threeyear period would remain
approximately the same as the amount
of training currently undertaken by
completing the Regulatory Element once
every three years.74 Additionally,
FINRA explained that the impact on
individuals from increased training
requirements, such as the time
commitment associated with those
trainings, would be limited in that the
overwhelming majority of registered
persons only hold a single registration
category.75
With respect to the commenter’s
proposed transition period, FINRA
responded that it believes that a phased
implementation with different timing
requirements for any of the proposed
components would be overly complex
and cause confusion. Additionally,
FINRA stated that a phased approach
would require more resources and could
result in greater costs to keep multiple
varying Regulatory Element systems and
programs running, including potential
additional costs to firms to track and
manage differing requirements.76 For
these reasons, FINRA declined to amend
the proposed rule change in response to
the commenter’s concerns.
In addition, one commenter opposed
the proposed change to increase the
frequency of the Regulatory Element,
believing that it would have a disparate
impact on members of underrepresented
populations who may have more limited
access to a broadband or high-speed
internet connection.77 The commenter
also stated that a mobile compatible
format may not be adequate for
continuing education given that mobile
devices may not meet all learning needs,
and that potential access and
connectivity challenges will also make
this an insufficient solution.78 By
contrast, a separate commenter was
fully supportive of FINRA making the
Regulatory Element available via a
mobile-compatible format on the
grounds that it would simplify the
process for individuals that have
terminated their registration and wanted
to reenter the industry at some point in
their career.79
In response, FINRA stated that it
specifically tailored the proposed rule
change to help meet the individual
needs of registered persons and firms.80
Accordingly, FINRA stated that the
Regulatory Element would be designed
to deliver content in a manner that is
broadly accessible and compatible with
the diverse needs of individuals and
their learning needs.81 In developing the
mobile-compatible format, which
includes a mobile responsive design,
FINRA intends mobile device users to
be able to easily, quickly, and
intuitively navigate the Regulatory
Regulatory Element topics to be published by
October 1 of each year. FINRA stated that it would
publish the topics by no later than October 1 of
each year in order to provide firms with sufficient
time to review the Regulatory Element topics for
each upcoming year. See FINRA Letter at 2 n.4.
71 See letter from Brian Egwele, dated July 2, 2021
(‘‘Egwele Letter’’). FINRA also identified that the
cost of changing to an annual Regulatory Element
generally would increase with the number of
representatives at a firm and thus would be higher
in aggregate at a larger firm. However, FINRA stated
that economies of scale likely exist in the
application of the proposed requirements such that
the average additional cost of implementing this
proposal per representative at larger firms would
likely be lower than at smaller firms. See Notice,
86 FR at 33435.
72 See Egwele Letter (expressing support for the
proposed rule change by stating that, even though
the proposed rule change may increase
administrative workload and costs, the ‘‘price is
worth it to remain compliant.’’).
73 See Egwele Letter.
74 See Notice, 86 FR at 33430.
75 See Notice, 86 FR at 33435. According to
FINRA, individuals with more than one registration
category account for approximately 35 percent of all
registered persons.
76 See FINRA Letter at 3. FINRA also stated that
the proposed rule change includes several
interrelated annual Regulatory Element
components: (1) Annual Regulatory Element
content for registered persons; (2) annual
Regulatory Element content for non-registered
individuals who are participating in the waiver
program under FINRA Rule 1210.09; and (3) annual
Regulatory Element content for individuals who
elect to maintain their qualification status for a
terminated registration category. See id.
77 See letter from John Watts, Senior Vice
President and Chief Counsel, PFS Investments, Inc.
(‘‘PFS’’), dated July 15, 2021 (‘‘PFS Letter’’). As
noted above, the delivery of the Regulatory Element
is available through CE Online, which allows
individuals to complete the content online at a
location of their choosing, including their private
residence. See supra note 19. Additionally, FINRA
and the CE Council have committed to making the
annual Regulatory Element content available to
users via a mobile application. See supra note 60.
78 See id.
79 See NFS Letter at 2 (also expressing support for
FINRA’s intention to publish learning topics in
advance on the grounds that it would be helpful for
securities industry professionals).
80 See FINRA Letter at 3.
81 See id.
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Element content.82 FINRA has
committed to developing the mobile
application so that access to the training
material and the overall learning
experience is engaging and intuitive for
users such that it would be a
comparable to those taking the training
on a desktop.83 FINRA believes that
these enhancements and the availability
of mobile compatibility would address
the potential access and diversity
concerns that the commenter raised.84
Furthermore, FINRA explained that it
has made available in the past, and will
continue to do so in the future,
additional options for individuals who
may need or prefer other solutions to
fulfill their Regulatory Element content
obligations.85 For instance, FINRA
stated that the Regulatory Element
training would also be accessible in
other convenient ways, including
through a computer or other device at a
firm location or on various widely
available public and community
locations where computer and
broadband internet access is available
for free.86 For these reasons, FINRA
declined to amend the proposed rule
change in response to the commenter’s
concerns.
The Commission finds that the
proposed rule change to move to an
annual Regulatory Element training
with content tailored to an individual’s
representative or principal registration
categories is designed to protect
investors and is in the public interest.
The Commission finds that the rule is
reasonably designed to minimize the
potential adverse impact on firms and
their registered persons. Furthermore,
increasing the timeliness of registered
persons’ training, as well as the
relevance of the training’s content by
tailoring it to each registration category
that they hold, would enhance their
education and compliance with their
regulatory obligations.
The Commission further finds that a
shift to an annual Regulatory Element
training is more advantageous when
compared to the current CE Program in
which some existing registered persons
may not receive consistent updated
82 See FINRA Letter at 4 (FINRA committed to
structuring and formatting the Regulatory Element
content to ensure that mobile device users have a
comparable experience to that of a desktop user
even in low bandwidth conditions).
83 See FINRA Letter at 4.
84 See FINRA Letter at 3–4. Additionally, FINRA
stated that it remains committed to understanding
specific technology or access needs and to provide
potential solutions. See FINRA Letter at 4.
85 See FINRA Letter at 4.
86 See id. FINRA offers individuals the option of
completing their Regulatory Element session at test
centers in various locations of every state as well
as internationally. Id.
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training from regulators on regulatory
developments for up to three years.
More specifically, transitioning to an
annual Regulatory Element requirement,
rather than taking a phased approach,
should enhance a firm’s regulatory
compliance, and reduce a firm’s overall
regulatory risk because of the increased
timeliness and relevance of the more
tailored content provided through an
annual Regulatory Element training.
Additionally, the Commission also finds
that the proposed rule change would
allow firms to maintain some flexibility
for administering the annual Regulatory
Element given that firms may require
their registered persons to complete the
annual requirement earlier than
December 31 each year so as to coincide
with other training requirements. The
Commission also finds that FINRA has
reasonably determined that its proposed
mobile accessibility would provide a
flexible, accessible, and effective
learning experience for users who
choose to access the Regulatory Element
through mobile technology. The
proposed mobile application
compatibility would also likely allow
for a more diverse candidate pool by
allowing individuals to reenter or
remain in the workforce if they have
previously completed the required
examinations and have already proven
themselves worthy, as suggested by a
commenter.87 Moreover, to the extent
registered persons need or prefer an
alternative to mobile compatibility to
fulfill their Regulatory Element
obligations, FINRA is committed to
making alternative options available. As
outlined above, these additional options
include widely-available test centers as
well as public and community locations
where computer and broadband access
is available for free. The Commission
finds that FINRA has provided
reasonable solutions to address
commenter concerns on accessibility.
Accordingly, for the reasons set forth
above, the Commission finds that the
proposed rule change is designed to
protect investors and is in the public
interest.
B. Recognition of Other Training
Requirements for Firm Element and
Extension of Firm Element Training to
All Registered Persons
As stated above, FINRA’s proposed
rule change would amend Rule 1240(b)
to allow for recognition of the successful
completion of existing firm training
programs relating to the AML
compliance program and the annual
compliance meeting toward satisfying
an individual’s annual Firm Element
87 See
NFS Letter at 2.
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requirement. The proposed rule change
would also amend the rule to extend the
Firm Element training requirement to all
registered persons, including
individuals who maintain solely a
permissive registration consistent with
Rule 1210.02, thereby further aligning
the Firm Element requirement with
other broadly-based training
requirements.
A number of commenters addressed
the Firm Element training component of
FINRA’s proposed rule change. Most
commenters supported allowing the
Firm Element to recognize a firm’s AML
compliance training and annual
compliance meeting as fulfilling that
requirement.88 One commenter stated
that it appreciated that the Firm
Element would recognize other trainings
that members provide to their registered
persons.89 Another commenter
supported this proposal because (1)
requiring training to cover ‘‘topics
related to the role, activities or
responsibilities of the registered
person’’ 90 and (2) requiring members to
develop written training plans that are
evaluated annually 91 should mitigate
any concerns that AML compliance and
annual compliance meeting trainings
would simply be substituted for more
tailored training requirements.92
One commenter stated, however, that
a firm’s annual needs analysis and
written training plan should not need to
be recompleted every year if the firm
has not changed business models.93
Additionally, the commenter
recommended that FINRA consider
making the Regulatory Element training
the primary, if not the sole means, by
which securities industry personnel are
made aware of important rules and
issues.94
In response, FINRA stated that the
Firm Element, which is firm-specific
and may vary from firm-to-firm, is a
necessary component of the CE
Program, complementing the Regulatory
Element, which ensures that registered
persons receive uniform and
comprehensive training from regulators
on regulatory developments.95
Similarly, FINRA stated that even if a
firm’s business model has not changed,
the regulatory or industry developments
that may have taken place still
necessitate an annual needs analysis to
88 See NFS Letter at 1; SIFMA Letter at 2; NASAA
Letter at 1–2.
89 See SIFMA Letter at 2.
90 Proposed Rule 1240(b)(2)(B).
91 See proposed Rule 1240(b)(2)(A).
92 See NASAA Letter at 1–2.
93 See Letter from Anonymous, dated July 1, 2021
(‘‘Anonymous Letter’’).
94 See Anonymous Letter.
95 See FINRA Letter at 5.
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53363
account for changes in addressing
products, services, or strategies offered
by the firm.96 For these reasons, FINRA
declined to amend the proposed rule
change to eliminate the Firm Element
component of its CE Program in
response to the commenter’s concerns.
The Commission finds that proposed
Rule 1240(b), which expressly allows
firms to consider training relating to
their AML compliance program and the
annual compliance meeting toward
satisfying an individual’s annual Firm
Element requirement, combined with
the proposed rule’s provision to extend
the Firm Element requirement to all
registered persons, reasonably aligns the
Firm Element requirement with other
required training.
The proposed rule change would
allow firms to satisfy the Firm Element
requirement with important, preexisting AML compliance training and
annual compliance meetings, which
should reduce otherwise duplicative
training programs for firms. In addition,
extending the Firm Element
requirement to all registered persons at
the firm, including those with
permissive registrations, would also
help to ensure a better trained and more
compliant securities workforce, which
is to the advantage of the investing
public. Furthermore, the Commission
finds that FINRA’s determination to
retain the Firm Element of its CE
program and the obligation that firms
conduct an annual needs analysis and
written training plan, even in the
absence of any new regulatory or
industry developments year-to-year, is
reasonable.97 For these reasons, the
Commission finds that the proposed
rule change is designed to protect
investors and is in the public interest.
C. Maintenance of Qualification After
Termination of Registration
As stated above, subject to certain
conditions, proposed Rule 1240(c), and
Supplementary Material .01 and .02 to
Rule 1240, would provide eligible
individuals who terminate any of their
representative or principal registrations
the option of maintaining their
qualification for any of their terminated
registrations for up to five years without
having to requalify by examination or
having to obtain an examination waiver
by completing continuing education.98
Most commenters expressed overall
support for FINRA’s proposal to allow
registered persons to maintain their
96 See
id.
id.
98 See proposed Rule 1240(c) and Supplementary
Material .01 and .02 to Rule 1240. See also Notice,
86 FR at 33430.
97 See
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qualifications for up to five years
through continuing education without
the need for reexamination after
termination of a registration.99 One
commenter stated that the proposed
change is one step in the process to
achieving greater diversity and
inclusion in the securities industry by
reducing unnecessary barriers to
reentry.100
Several commenters, however,
expressed a preference for a longer
period of time that an individual could
maintain their qualifications following
termination of a registration, instead of
the five-year period that FINRA
proposed.101 One of those commenters
strongly supported this aspect of the
proposal as a welcome and necessary
improvement to continuing education,
but preferred a seven-year period of
time to maintain qualifications so as to
more closely align with the existing
seven-year period in the FSAWP
program.102 Other commenters
suggested that a seven-year period
would be ideal in order to further
enhance the diversity benefits of this
proposed rule change.103 Another
commenter supported a longer period to
maintain qualifications, especially for
individuals who are active within the
securities industry in a non-registered
99 See SIFMA Letter at 2; NASAA Letter at 2; NFS
Letter at 2; letter from Frederick Greene, Executive
Vice President, Woodforest Wealth Strategies, dated
July 11, 2021 (‘‘Woodforest Letter’’); letter from
Carrie Chelko, Chief Compliance Officer, Fidelity
Investments, dated July 14, 2021 (‘‘Fidelity Letter’’);
and letter from Howard Spindel, Senior Managing
Director, Integrated Solutions, dated July 14, 2021
(‘‘Integrated Letter’’).
100 See SIFMA Letter at 2.
101 See Fidelity Letter at 2; Integrated Letter at 2–
3; NFS Letter at 2; and Woodforest Letter at 1.
102 See Fidelity Letter at 2.
103 See NFS Letter at 2; Woodforest Letter at 1–
2. Additionally, the Woodforest Letter suggested
that individuals availing themselves of this program
should be required to complete at least the
minimum Firm Element requirement, including
training on ethics, AML, regulations, and products
and, if applicable, additional continuing education
relating to supervisory functions. In response,
FINRA stated that the continuing education content
for individuals who elect the proposed option
would consist of a combination of Regulatory
Element content and content selected by FINRA
and the CE Council from the Firm Element content
catalog. According to FINRA, that content would
correspond to the registration category, including
any supervisory or principal registration category,
for which individuals wish to maintain their
qualifications. In addition, FINRA stated that the
content selected from the Firm Element content
catalog would be based on the minimum standards
for Firm Element training, including training in
professional responsibility. See FINRA Letter at 6.
Commenters were supportive of the content catalog,
stating that it would enable more timely and
increased awareness that would enhance customer
protection, for example, by providing relevant
information regarding, among other things, trends
in retail investor trading, regulatory rule changes,
and cybersecurity. See NASAA Letter at 1. See also
Fidelity Letter at 1.
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capacity who could be ‘‘grandfathered
in’’ rather than needing to go through a
waiver process that the commenter
described as ‘‘onerous’’ and
‘‘subjective.’’ 104
In response, FINRA stated that it
believes the proposed participation
period of up to five years would serve
the diversity and inclusion goals of the
proposed rule change while still
providing the appropriate level of
training for registered persons and
protection for investors.105 In particular,
FINRA believes that this proposal
would help attract and retain a broader,
more diverse population of individuals
to the securities industry by offering a
program that is sufficiently flexible to
meet the individual needs of registered
persons and firms.106 Moreover, FINRA
believes that limiting this option to five
years would help ensure that
individuals’ knowledge of the industry
does not become outdated.107
FINRA also stated, however, that the
proposed five-year maintenance option
is not intended to address every
situation in which an individual
terminates a registration and
subsequently decides to reregister.108
FINRA explained it has always provided
an individual who continues to work in
the securities industry or a field
ancillary to the securities industry the
ability to request an examination waiver
following a significant absence from a
registered role or function.109 For the
above reasons, FINRA believes that the
proposed new five-year maintenance
period is appropriate.110
Although FINRA declined to amend
the participation period at this time,
FINRA stated that it would continue to
monitor the efficacy of the proposed CE
Program, which will include a review of
the participation period.111
One commenter, although supporting
the proposed rule change, also
104 See
Integrated Letter at 2–3.
FINRA Letter at 6. See also Notice, 86 FR
at 33435 (explaining that FINRA believes a length
of five years could achieve the main goals and
anticipated benefits of the proposed changes to the
CE Program. FINRA further stated that a seven-year
period may not best protect investors and that a
five-year period may better mitigate the impact of
differences with state licensing requirements.).
106 See FINRA Letter at 3.
107 See Notice, 86 FR at 33435–36.
108 See FINRA Letter at 6.
109 See id. FINRA further stated that in
determining whether to grant a waiver in such
cases, FINRA expressly considers whether the
individual was previously registered, and for how
long relative to the duration of time that the
individual has been unregistered. FINRA also
explained that it considers whether the individual
worked in a field ancillary to the securities
industry, and for how long, while unregistered. See
id.
110 See FINRA Letter at 6.
111 See Notice, 86 FR at 33431.
105 See
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suggested that, if the rule change is
adopted, FINRA should enhance CRD to
allow states that have not revised
existing regulations to efficiently
process registration applications of
persons who maintain their
qualifications beyond two years.112 In
response, FINRA recognized the benefits
to the industry of having further
alignment between FINRA qualification
requirements and state licensing
requirements.113 Thus, FINRA stated
that it would work with NASAA and
state regulators to provide for an
appropriate process and system to allow
states to track and process registration
requests for individuals operating under
the two- or five-year examination
provisions.114
The Commission finds that FINRA’s
proposed Rule 1240(c), and proposed
Supplementary Material .01 and .02 to
Rule 1240, is in the public interest and
would protect investors because it
would, among other things, help
enhance the education of registered
persons and their compliance with their
regulatory obligations, thus reducing
regulatory risk. In particular, by
providing a means for individuals to
maintain their qualifications after
termination of a registration for a longer
period of time, the proposed rule change
would aid the securities industry in
attracting and retaining a more diverse
workforce. Additionally, this proposed
rule change would provide registered
persons with increased flexibility to
manage significant life events, including
professional changes and development
(such as pursuing educational goals, a
career change to a role in the firm that
is not part of the broker-dealer, working
overseas for an extended period due to
a career change or an attempt at a
different career path) or personal life
events (such as birth or adoption of a
child, unexpected loss in the family or
relocation due to family needs). In
addition, the Commission finds that
FINRA’s decision to choose five years as
the time period for maintaining
qualifications after termination of a
registration, while also continuing to
monitor the efficacy of the proposed CE
Program, is reasonable.
The proposed rule change would also
increase opportunities for reentry to the
securities industry for individuals who
may not have otherwise been able to do
so without retaking their qualification
examinations. As a result, this proposed
rule change would provide firms with a
more diverse pool of applicants from
under-represented populations in the
112 See
NASAA Letter at 2.
FINRA Letter at 6.
114 See FINRA Letter at 5–6.
113 See
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securities industry, such as female and
older registrants. In turn, this proposed
rule change would allow the industry to
retain expertise from skilled
individuals, providing investors with
the advantage of greater experience
among the individuals working in the
industry. For these reasons, the
Commission finds the proposed rule
change is designed to protect investors
and is in the public interest.
IV. Conclusion
It is therefore ordered pursuant to
Section 19(b)(2) of the Exchange Act 115
that the proposed rule change (SR–
FINRA–2021–015), be, and hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.116
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–20818 Filed 9–24–21; 8:45 am]
BILLING CODE 8011–01–P
hours per response is prepared by the
company for a total annual burden of
612 hours (4.25 hours per response ×
144 responses).
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to (i) www.reginfo.gov/public/do/
PRAMain and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission, c/
o Cynthia Roscoe, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: PRA_Mailbox@sec.gov.
Dated: September 22, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–660, OMB Control No.
3235–0722]
[FR Doc. 2021–20904 Filed 9–24–21; 8:45 am]
BILLING CODE 8011–01–P
Submission for OMB Review;
Comment Request
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
lotter on DSK11XQN23PROD with NOTICES1
Extension:
Form 1–U
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget this
request for extension of the previously
approved collection of information
discussed below.
Form 1–U (17 CFR 239.93) is used to
file current event reports by Tier 2
issuers under Regulation A, an
exemption from registration under the
Securities Act of 1933 (15 U.S.C. 77a et
seq.). Form 1–U provides information to
the public within four business days of
fundamental changes in the nature of
the issuer’s business and other
significant events. We estimate that
approximately144 issuers file Form 1–U
annually. We estimate that Form 1–U
takes approximately 5.0 hours to
prepare. We estimate that 85% of the 5.0
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93094; File No. SR–BOX–
2021–14]
Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Filing of
Amendment No. 1 and Order Instituting
Proceedings To Determine Whether To
Approve or Disapprove a Proposed
Rule Change, as Modified by
Amendment No. 1, in Connection With
the Proposed Establishment of BSTX
as a Facility of the Exchange
September 21, 2021.
On June 7, 2021, BOX Exchange LLC
(‘‘Exchange’’ or ‘‘BOX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
adopt rules in connection with the
establishment of the Boston Security
Token Exchange LLC (‘‘BSTX’’) as a
facility of the Exchange. The proposed
rule change was published for comment
in the Federal Register on June 24,
2021.3 On August 3, 2021, pursuant to
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 92206
(June 17, 2021), 86 FR 33402 (‘‘Notice’’).
2 17
115 15
116 17
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
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18:08 Sep 24, 2021
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PO 00000
Frm 00104
Fmt 4703
Sfmt 4703
53365
Section 19(b)(2) of the Act,4 the
Commission designated a longer period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to disapprove the
proposed rule change.5 On September
16, 2021, the Exchange filed
Amendment No. 1 to the proposed rule
change, which replaced and superseded
the proposed rule change as originally
filed.6 The Commission has received no
comments on the proposed rule change.
The Commission is publishing this
notice and order to solicit comments on
the proposed rule change, as modified
by Amendment No. 1, from interested
persons, and to institute proceedings
pursuant to Section 19(b)(2)(B) of the
Act 7 to determine whether to approve
or disapprove the proposed rule change,
as modified by Amendment No. 1.
4 15
U.S.C. 78s(b)(2).
Securities Exchange Act Release No. 92556,
86 FR 43572 (August 9, 2021). The Commission
designated September 22, 2021, as the date by
which the Commission shall approve or disapprove,
or institute proceedings to determine whether to
approve or disapprove, the proposed rule change.
6 In Amendment No. 1, the Exchange revised the
proposal to: (1) Adopt the BSTX LLC Third
Amended and Restated Limited Liability Company
Agreement (‘‘BSTX LLC Agreement’’) prior to the
commencement of operations of BSTX as a facility
of the Exchange, which, among other things, (a)
changes the legal name of the facility from ‘‘Boston
Security Token Exchange LLC’’ to ‘‘BSTX LLC,’’ (b)
modifies certain defined terms, including ‘‘BSTX
Product’’ and ‘‘Competing Business,’’ (c) defines the
term ‘‘Governmental Authority’’ and modifies
certain provisions to permit access to certain
confidential information by any such authority, and
(d) adds a provision that would, among other
things, require an effective rule filing pursuant to
Section 19 of the Exchange Act prior to any
Member, or Related Person of such Member,
becoming a BSTX Participant if such Member, alone
or together with any Related Persons of such
Member, has the right to appoint more than 20%
of the BSTX Directors entitled to vote; (2) provide
additional information about ownership of nonvoting Class B Units; (3) clarify how limitations on
voting of interests in BOX Holdings are
implemented by reallocating voting rights to other
BOX Holdings owners, and how a similar provision
in the BSTX LLC Agreement would operate; (4)
discuss certain provisions and associated
definitions in the BSTX LLC Agreement that are the
same or different from those that currently apply to
BOX Holdings and BOX Options, particularly with
respect to the board structure, intellectual property,
and automatic admission of Class B Units as
Members; (5) provide additional description of
limitations on voting and ownership of interests in
the Exchange; (6) provide additional description of
the roles, obligations, and authorities of BOX
Digital, tZERO, and the Exchange with respect to
BSTX; (7) describe the funding of operations of
BSTX; (8) clarify representation of BSTX
Participants on the Exchange’s Board and
committees, and how those representatives would
be appointed at the commencement of operations;
and (9) make other technical, clarifying and
conforming changes. Amendment No. 1 is available
on the Commission’s website at: https://
www.sec.gov/comments/sr-box-2021-14/
srbox202114-9251558-250847.pdf.
7 15 U.S.C. 78s(b)(2)(B).
5 See
E:\FR\FM\27SEN1.SGM
27SEN1
]]>Agencies
[Federal Register Volume 86, Number 184 (Monday, September 27, 2021)]
[Notices]
[Pages 53358-53365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20818]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93097; File No. SR-FINRA-2021-015]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Approving a Proposed Rule Change To Amend FINRA
Rules 1210 (Registration Requirements) and 1240 (Continuing Education
Requirements)
September 21, 2021.
I. Introduction
On June 3, 2021, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend FINRA Rules 1240
(Continuing Education Requirements) and 1210 (Registration
Requirements) to, among other things, (1) require that the Regulatory
Element of FINRA's continuing education program for registered persons
of FINRA members (``CE Program'') be tailored to each registration
category and completed annually rather than every three years and (2)
provide a way for individuals to maintain their qualifications
following the termination of registration through continuing education.
The proposed rule change was published for comment in the Federal
Register on June 24, 2021.\3\ On July 23, 2021, FINRA consented to
extend until September 22, 2021, the time period in which the
Commission must approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
approve or disapprove the proposed rule change.\4\ On August 12, 2021,
FINRA responded to the comment letters received in response to the
Notice.\5\ This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Exchange Act Release No. 92183 (Jun. 15, 2021), 86 FR
33427 (Jun. 24, 2021) (File No. SR-FINRA-2021-015) (``Notice'').
\4\ See letter from Afshin Atabaki, Special Advisor and
Associate General Counsel, FINRA, to Edward Schellhorn, Special
Counsel, Division of Trading and Markets, Commission, dated July 23,
2021. This letter is available at https://www.finra.org/sites/default/files/2021-07/SR-FINRA-2021-015-Extension1.pdf.
\5\ See letter from Afshin Atabaki, Special Advisor and
Associate General Counsel, FINRA, to Vanessa Countryman, Secretary,
Commission, dated August 12, 2021, 2021 (``FINRA Letter''). The
FINRA Letter is available at https://www.sec.gov/comments/sr-finra-2021-015/srfinra2021015-9135950-247347.pdf.
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
A. Background
As discussed in the Notice, FINRA's CE Program is codified under
Rule 1240. The CE Program currently requires registered persons to
complete continuing education consisting of a Regulatory Element and a
Firm Element.\6\ The Regulatory Element, which is administered by
FINRA, focuses on regulatory requirements and industry standards,\7\
while the Firm Element is provided by each firm and focuses on, among
other things, securities products, services and strategies the firm
offers, firm policies, and industry trends.\8\ FINRA is proposing to
amend Rule 1240 and make conforming amendments to Rule 1210 to modify
aspects of both the Regulatory Element and the Firm Element.\9\
---------------------------------------------------------------------------
\6\ See FINRA Rule 1240. See also FINRA Rule 1210.07 (All
Registered Persons Must Satisfy the Regulatory Element of Continuing
Education).
\7\ FINRA's website describes the Regulatory Element as being
focused on compliance, regulatory, ethical and sales practice
standards. According to FINRA, its content is derived from industry
rules and regulations, and accepted standards and practices in the
industry. Moreover, participants must demonstrate proficiency in
order to satisfy the continuing education requirements. See https://www.finra.org/registration-exams-ce/continuing-education#regulatory.
\8\ See Notice, 86 FR at 33428.
\9\ FINRA stated that the proposed rule change was developed in
close consultation with the Securities Industry/Regulatory Council
(``CE Council'') and discussions with stakeholders, including the
North American Securities Administrators Association (``NASAA'').
Specifically, FINRA stated that the proposed changes to the CE
Program are based in part on the CE Council's September 2019
recommendations to enhance the CE Program. See Notice, 86 FR at
33429.
---------------------------------------------------------------------------
In addition, FINRA stated in the Notice that it and the CE Council
also plan to enhance the CE Program in other ways that do not require
changes to FINRA's rules.\10\ Among other things, FINRA and the CE
Council will work together to incorporate a variety of instructional
formats (including a mobile-compatible format) and provide firms with
advance notice of Regulatory Element topics as well as additional
resources and guidance to help firms develop effective Firm Element
training programs.\11\
---------------------------------------------------------------------------
\10\ See Notice, 86 FR at 33428.
\11\ See id.
---------------------------------------------------------------------------
B. Transition to an Annual Regulatory Element for Each Registration
Category
Currently, FINRA Rule 1240(a) initially requires a registered
person to complete the applicable Regulatory Element within 120 days
after the person's second registration anniversary date and,
thereafter, within 120 days after every third registration anniversary
date.\12\ FINRA's proposed rule change would amend FINRA Rule 1240(a)
and Rule 1210.07 to require registered persons to complete the
Regulatory Element of the CE Program annually by December 31. Firms,
however, would have the flexibility to require their registered persons
to complete the Regulatory Element sooner than December 31, which would
allow firms to coordinate the timing of the Regulatory Element with
other training requirements, including the Firm Element.\13\ Similarly,
the proposed rule change would preserve FINRA's ability to extend the
time by which a registered person must complete the Regulatory Element
for good cause shown if requested in writing and with supporting
documentation.\14\ Consistent
[[Page 53359]]
with current requirements, individuals who fail to complete their
Regulatory Element within the prescribed period would be automatically
designated as ``CE inactive'' \15\ in the Central Registration
Depository (``CRD'') system \16\ until the requirements of the
Regulatory Element have been satisfied.\17\
---------------------------------------------------------------------------
\12\ See FINRA Rule 1240(a)(1).
\13\ See Notice, 86 FR at 33429. FINRA also stated that
individuals who would be registering as a representative or
principal for the first time on or after the implementation date of
the proposed rule change would be required to complete their initial
Regulatory Element for that registration category in the next
calendar year following their registration. In addition, subject to
specified conditions, individuals who would be reregistering as a
representative or principal on or after the implementation date of
the proposed rule change would also be required to complete their
initial Regulatory Element for that registration category in the
next calendar year following their reregistration. See id. at 33429.
\14\ See proposed Rule 1240(a)(2). See also Notice, 86 FR at
33429. FINRA may also grant conditional examination waivers
requiring individuals to complete the Regulatory Element by a
specified date. Non-registered individuals who are participating in
the Financial Services Affiliate Waiver Program (``FSAWP'') under
Rule 1210.09 (``FSAWP Participants'') are also subject to the
Regulatory Element. See Notice, 86 FR at 33428.
\15\ See proposed Rule 1240(a)(2). A CE inactive person is
prohibited from performing, or being compensated for, any activities
requiring FINRA registration, including supervision. Additionally,
if registered persons remain CE inactive for two consecutive years,
they must requalify by retaking required examinations (or obtain a
waiver of the applicable qualification examinations). See Notice, 86
FR at 33428.
\16\ See https://www.finra.org/registration-exams-ce/classic-crd. As stated on the website, FINRA integrated the registration
filing functionality that supports the CRD Program into FINRA
Gateway, available at https://www.finra.org/filing-reporting/finra-gateway. The standalone CRD features were retired August 21, 2021.
\17\ See Notice, 86 FR at 33428.
---------------------------------------------------------------------------
FINRA stated that the current content of the Regulatory Element is
broad in nature, applying to both representatives and principals in a
single format that leads individuals through a story depicting
scenarios that they may encounter in the course of their work.\18\ The
proposed rule change would instead tailor the content of the Regulatory
Element to each registration category. Thus, registered persons would
be required to complete content specifically designed for each
representative or principal registration category that they hold.\19\
---------------------------------------------------------------------------
\18\ See id. FINRA stated that the Regulatory Element currently
consists of a subprogram for registered persons generally, and a
subprogram for principals and supervisors. According to FINRA, while
some of the current Regulatory Element content is unique to
particular registration categories, most of the content has broad
application to both representatives and principals. FINRA also
stated that the Regulatory Element was originally designed at a time
when most individuals had to complete the Regulatory Element at a
test center, and its design was shaped by the limitations of the
test center-based delivery model. Since 2015, FINRA has transitioned
the delivery of the Regulatory Element to an online platform (``CE
Online''), which allows individuals to complete the content online
at a location of their choosing, including their private residence.
According to FINRA, the transition to CE Online has enhanced FINRA's
ability to update continuing education content in a timelier fashion
and to develop content that is tailored to each registration
category as well as to present the materials in an optimal learning
format. See id.
\19\ See proposed Rules 1240(a)(1) and (a)(4).
---------------------------------------------------------------------------
FINRA's proposed rule change also proposes to amend Rule 1240(a) to
include five additional elements such that: (1) Individuals who are
designated as CE inactive would be required to complete all of their
pending and upcoming annual Regulatory Element, including any annual
Regulatory Element that becomes due during their CE inactive period, to
return to active status; \20\ (2) the two-year CE inactive period would
be calculated from the date individuals become CE inactive, and would
continue to run regardless of whether individuals terminate their
registrations; \21\ (3) individuals who become subject to a significant
disciplinary action may be required to complete assigned continuing
education content as prescribed by FINRA; \22\ (4) individuals who have
not completed any Regulatory Element content for a registration
category in the calendar year(s) prior to reregistering would not be
approved for registration for that category until they complete that
Regulatory Element content, pass an examination for that registration
category, or obtain an unconditional examination waiver for that
registration category, whichever is applicable; \23\ and (5) the
Regulatory Element requirements would apply to individuals who are
registered, or are in the process of registering as a representative or
principal.\24\
---------------------------------------------------------------------------
\20\ See Notice, 86 FR at 33429-30.
\21\ See Notice, 86 FR at 33430.
\22\ See id.
\23\ See Notice, 86 FR at 33430.
\24\ See id.
---------------------------------------------------------------------------
FINRA stated that moving to an annual Regulatory Element
requirement that is tailored to each registration category would
further the goals of the Regulatory Element by helping ensure that
registered persons are better trained in more recent regulatory issues,
allowing them to perform their work in a more compliant and effective
manner.\25\ For instance, FINRA stated that transitioning to an annual
Regulatory Element cycle would help ensure that registered persons
receive more frequent assessments on current issues and better
understand recent regulatory changes.\26\ Specifically, FINRA stated
that registered persons would be current on issues and regulatory
changes that would enable them to perform their work in a more
compliant and effective manner than would otherwise be possible with
Regulatory Element training taking place only once every three years
under the current CE Program.\27\ According to FINRA, this enhanced
timeliness and relevance of the Regulatory Element would reduce firms'
regulatory risk as well as enhancing compliance and reducing
compliance-related costs.\28\
---------------------------------------------------------------------------
\25\ See Notice, 86 FR at 33434.
\26\ See id.
\27\ See id.
\28\ See id.
---------------------------------------------------------------------------
C. Recognition of Other Training Requirements for Firm Element and
Extension of Firm Element to All Registered Persons
Currently, Rule 1240(b) requires a firm to develop and administer
an annual Firm Element training program for its covered registered
persons.\29\ The Firm Element must, at a minimum, include training in
ethics and professional responsibility, as well as training in the
following items concerning securities products, services, and
strategies offered by the member: (1) General investment features and
associated risk factors; (2) suitability and sales practice
considerations; and (3) applicable regulatory requirements.\30\ Firms
are required to conduct an annual needs analysis to, at minimum,
determine the appropriate Firm Element training for covered registered
persons at the firm based on the specific business of the member, and
then provide the Firm Element training annually.\31\ The current rule
does not expressly recognize other required training, such as training
relating to the anti-money laundering (``AML'') compliance program and
training relating to the annual compliance meeting, for purposes of
satisfying the Firm Element training.\32\
---------------------------------------------------------------------------
\29\ See Rule 1240(b). See also Notice, 86 FR at 33428. The rule
defines ``covered registered persons'' as any registered person who
has direct contact with customers in the conduct of a member's
securities sales, trading and investment banking activities, any
individual who is registered as an Operations Professional or a
Research Analyst, and the immediate supervisors of any such persons.
See Rule 1240(b)(1).
\30\ See Rule 1240(b). See also Notice, 86 FR at 33428.
\31\ See Rule 1240(b). See also Notice, 86 FR at 33428.
\32\ See Rule 3310(e) and Rule 3110(a)(7). See also Notice, 86
FR at 33429.
---------------------------------------------------------------------------
FINRA's proposed rule change would amend Rule 1240(b) to allow for
recognition of the successful completion of existing firm training
programs relating to the AML compliance program and the annual
compliance meeting toward satisfying an individual's annual Firm
Element requirement.\33\ The proposed rule change would also amend the
rule to extend the Firm Element requirement to all registered persons,
including individuals who maintain solely a permissive registration
consistent with Rule 1210.02, thereby further aligning the Firm Element
requirement with other broadly-based training requirements.\34\ FINRA
also is
[[Page 53360]]
proposing to modify the current minimum training criteria under Rule
1240(b) to provide that Firm Element training must cover topics related
to the role, activities, or responsibilities of the registered person,
as well as professional responsibility.\35\
---------------------------------------------------------------------------
\33\ See proposed Rule 1240(b)(2)(D). See also Notice, 86 FR at
33430.
\34\ See proposed Rule 1240(b)(1). See also Notice, 86 FR at
33430.
\35\ See proposed Rule 1240(b)(2)(B). See also Notice, 86 FR at
33430.
---------------------------------------------------------------------------
FINRA stated that the proposed rule change would further enhance
and streamline the Firm Element requirement.\36\ Specifically, FINRA
stated that the inclusion of an express recognition of existing firm
training programs, such as the annual compliance meeting or AML
training, toward satisfying an individual's Firm Element requirement
would help firms conserve compliance resources currently devoted to
duplicative training programs.\37\ Additionally, FINRA stated that the
extension of the Firm Element requirement to all registered persons
would help ensure that firms enhance the securities knowledge, skill,
and professionalism of all registered persons.\38\ FINRA stated that it
would also ensure that registered persons are provided more specific
learning materials relevant to their day-to-day activities.\39\
---------------------------------------------------------------------------
\36\ See Notice, 86 FR at 33434.
\37\ See id.
\38\ See Notice, 86 FR at 33438.
\39\ See id.
---------------------------------------------------------------------------
D. Maintenance of Qualification After Termination of Registration
Currently, individuals whose registrations as representatives or
principals have been terminated for two or more years may reregister as
representatives or principals only if they requalify by retaking and
passing the applicable representative- or principal-level examination
or if they obtain a waiver of such examination(s) (the ``two-year
qualification period'').\40\ The proposed rule change would not
eliminate the two-year qualification period. Instead, the proposed rule
change would amend the rules governing requalification of registered
representatives who have terminated their registration to provide
individuals an alternative means of maintaining their qualifications
and staying current on their regulatory and securities knowledge
following the termination of a registration, subject to conditions and
limitations outlined in further detail below.\41\
---------------------------------------------------------------------------
\40\ See Rule 1210.08 (Lapse of Registration and Expiration of
SIE). FINRA also stated that the current two-year qualification
period before an individual would need to retest and pass their
examinations was adopted prior to the creation of the CE Program and
was intended to ensure that individuals who reregister are
relatively current on their regulatory and securities knowledge. See
Notice, 86 FR at 33429.
\41\ See Notice, 86 FR at 33430. Eligible individuals who elect
not to participate in the proposed continuing education program to
maintain their qualifications would continue to be subject to the
two-year qualification period.
---------------------------------------------------------------------------
Specifically, the proposed rule change would adopt paragraph (c)
under Rule 1240, and Supplementary Material .01 and .02 to Rule 1240,
to provide eligible individuals who terminate any of their
representative or principal registrations the option of maintaining
their qualification for any of the terminated registrations for up to
five years by completing continuing education.\42\ This optional
program would be limited by the following conditions: (1) Individuals
would be required to be registered in the terminated category for at
least one year immediately prior to the termination of the category;
\43\ (2) individuals could elect to participate when they terminate a
registration or within two years from the termination of a
registration; \44\ (3) individuals would be required to complete
annually all prescribed continuing education; \45\ (4) individuals
would have a maximum of five years in which to reregister; \46\ (5)
individuals who have been CE inactive for two consecutive years, or who
become CE inactive for two consecutive years during their
participation, would not be eligible to participate or continue; \47\
and (6) individuals who are subject to a statutory disqualification, or
who become subject to a statutory disqualification following the
termination of their registration or during their participation, would
not be eligible to participate in, or continue with, the program.\48\
---------------------------------------------------------------------------
\42\ See proposed Rule 1240(c) and Supplementary Material .01
and .02 to Rule 1240. See also Notice, 86 FR at 33430.
\43\ See Notice, 86 FR at 33430.
\44\ See id. FINRA stated that individuals who elect to
participate at the later date would be required to complete, within
two years from the termination of their registration, any continuing
education that becomes due between the time of their Form U5
submission and the date that they commence their participation. In
addition, FINRA stated that it plans to enhance its systems to
notify individuals of their eligibility to participate, enable them
to affirmatively opt in, and notify them of their annual continuing
education requirement if they opt in. See id.
\45\ See Notice, 86 FR at 33431. FINRA's proposed rule change
would also allow FINRA to grant an extension of time for the
participant to complete the prescribed continuing education
following a participant's request in writing with supporting
documentation and a showing of good cause. See id.
\46\ See Notice, 86 FR at 33431.
\47\ See id.
\48\ See id. In addition, FINRA stated that any continuing
education content completed in furtherance of this proposed program
would be retroactively nullified upon disclosure of the statutory
disqualification. See id.
---------------------------------------------------------------------------
FINRA also is proposing two additional provisions in the proposed
rule change. The first is a look-back provision that would, subject to
specified conditions, extend the application of the proposed five-year
option to individuals who have been registered as a representative or
principal within two years immediately prior to the implementation date
of the proposed rule change and individuals who have been FSAWP
Participants immediately prior to the implementation date of the
proposed rule change.\49\ The second is a re-eligibility provision that
would allow individuals to regain eligibility to participate in the
proposed five-year continuing education option each time they
reregister with a firm for a period of at least one year and
subsequently terminate their registration, provided that they satisfy
the other participation conditions and limitations.\50\
---------------------------------------------------------------------------
\49\ See Notice, 86 FR at 33431. Among other things, proposed
Supplementary Material .01 to Rule 1240 and proposed Rule 1210.09
would provide the requirements and limitations to participation in
this optional five-year continuing education period for FSAWP
Participants, including when they would need to elect to
participate, when they would need to complete their initial annual
content, and adjustment of their initial participation period based
on the date that their registration was terminated. Additionally,
FINRA stated that while the current waiver program for FSAWP
Participants would not be available to new participants upon
implementation of the proposed rule change, individuals who are
FSAWP Participants immediately prior to the implementation date of
the proposed rule change could elect to continue in that waiver
program until the program has been retired. The proposed rule change
would preserve FINRA's ability to extend the time by which FSAWP
Participants must complete the Regulatory Element for good cause
shown under proposed Rule 1240(a)(2). See Notice, 86 FR at 33431.
\50\ See Notice, 86 FR at 33431.
---------------------------------------------------------------------------
FINRA also is proposing conforming amendments to Rule 1210,
including adding references to proposed Rule 1240(c) under Rule
1210.08.\51\
---------------------------------------------------------------------------
\51\ See id.
---------------------------------------------------------------------------
According to FINRA, the continuing education content for
participants of the proposed five-year continuing education option
would consist of a combination of Regulatory Element content and
content selected by FINRA and the CE Council from the Firm Element
content catalog discussed further below.\52\ The content would
correspond to the registration category for which individuals wish to
maintain their qualifications.\53\ The proposed rule change would also
provide that the continuing education content for participants of the
proposed five-year continuing education option must be completed
annually by December 31
[[Page 53361]]
each year, consistent with the proposed annual Regulatory Element
provision.\54\ In addition, FINRA stated that participants who are
maintaining their qualification status for a principal registration
category that includes one or more corequisite representative
registrations would also need to complete required annual continuing
education for the corequisite registrations in order to maintain their
qualification status for the principal registration category.\55\
---------------------------------------------------------------------------
\52\ See id.
\53\ See id.
\54\ See id. See also supra note 11 and accompanying text.
\55\ See Notice, 86 FR at 33431.
---------------------------------------------------------------------------
FINRA stated that the proposed rule change would: (1) Incentivize
individuals to stay current on their respective securities industry
knowledge following the termination of any of their registrations; (2)
promote investor protection given that the individuals availing
themselves of this optional program would be subjected to continuing
education that is as rigorous as the continuing education of registered
persons, while providing an opportunity for the securities industry to
retain skilled and experienced workers; (3) increase flexibility for
individuals to address life and career events and necessary absences
from registered functions without having to requalify each time; and
(4) enhance diversity and inclusion in the securities industry by
attracting and retaining a broader and diverse group of
professionals.\56\ FINRA has also stated that it plans to evaluate the
efficacy of the proposed rule change following its implementation to
ensure that it is meeting its goals.\57\
---------------------------------------------------------------------------
\56\ See Notice, 86 FR at 33431, 33435. According to FINRA, the
proposed rule change may be of particular value to women and older
workers. FINRA stated that women continue to be the primary
caregivers for children and aging family members and, as a result,
are likely to be absent from the industry for longer periods of time
than men. Additionally, FINRA stated that the proposed rule change
would provide longer-term relief for older workers, who are at a
higher risk of a job loss during certain economic downturns and who
are likely to remain unemployed for longer periods of time than
younger workers. See Notice, 86 FR at 33431.
\57\ See Notice, 86 FR at 33431.
---------------------------------------------------------------------------
E. Other Enhancements to the CE Program
FINRA stated in the Notice that it intends to make additional
enhancements to the CE Program that will not require changes to FINRA
rules.\58\ FINRA stated that it would work with the CE Council to
incorporate a variety of instructional formats to present the
Regulatory Element content, including via a mobile compatible
application.\59\ In addition, FINRA stated that it would work with the
CE Council to publish in advance the Regulatory Element learning topics
for the next year so that firms may review those topics when developing
their Firm Element training plan to avoid unnecessary duplication of
topics if desired.\60\ Given that the proposed rule change would
transition to an annual Regulatory Element requirement, FINRA stated
that it would assist firms with compliance with that requirement by
enhancing its systems to provide firms and registered persons with
additional notification, management, and tracking functionality.\61\
---------------------------------------------------------------------------
\58\ See Notice, 86 FR at 33432.
\59\ See id. In response to a Regulatory Notice that FINRA
issued concerning proposed changes to the CE Program, it received a
comment letter encouraging FINRA to make continuing education
available via a mobile application. FINRA stated that it intends to
take that suggestion and plans to make the Regulatory Element
content available via a mobile application. See FINRA Letter at 2-3.
\60\ See Notice, 86 FR at 33432.
\61\ See id. FINRA stated that the transition to an annual
Regulatory Element requirement would have the effect of increasing
the number of registered persons who would be required to complete
the Regulatory Element on an annual basis. As such, FINRA stated
that the enhancement of notification, modification, and tracking
functionality in its systems will be helpful for firms and
individuals. See Notice, 86 FR at 33432.
---------------------------------------------------------------------------
FINRA also stated that it would improve the guidance and resources
available to firms to develop effective Firm Element training programs,
such as updated guidance for developing and documenting training plans
and specific principles.\62\ Further, FINRA stated that it would work
with the CE Council to develop a catalog of continuing education
content that would serve as an optional resource for firms to select
relevant Firm Element content and create learning plans for their
registered persons.\63\ According to FINRA, the catalog would include
content developed by third-party training providers, FINRA, and the
other Self-Regulatory Organizations participating in the CE
Program.\64\
---------------------------------------------------------------------------
\62\ See Notice, 86 FR at 33432.
\63\ See Notice, 86 FR at 33432, 33434. FINRA stated that firms
would have the option of using the content in this catalog for
purposes of their Firm Element training and would not be obligated
to select content from the catalog.
\64\ See Notice, 86 FR at 33432.
---------------------------------------------------------------------------
F. Effective Date
If the Commission approves the proposed rule change, FINRA will
announce the implementation dates of the proposed rule change in a
Regulatory Notice to be published no later than 90 days following
Commission approval.\65\
---------------------------------------------------------------------------
\65\ See id.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review of the proposed rule change, the comment
letters, and FINRA's response to the comments, the Commission finds
that the proposed rule change is consistent with the requirements of
the Exchange Act and the rules and regulations thereunder that are
applicable to a national securities association.\66\ Specifically, the
Commission finds that the proposed rule change is consistent with
Section 15A(b)(6) of the Exchange Act, which requires, among other
things, that FINRA rules 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.\67\
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\66\ In approving this rule change, the Commission has
considered the rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\67\ 15 U.S.C. 78o-3(b)(6).
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A. Transition to Annual Regulatory Element for Each Registration
Category
As stated above, FINRA is proposing to amend Rule 1240(a) and Rule
1210.07 to require registered persons to complete the Regulatory
Element of the CE Program annually by December 31 and to require
registered persons to complete the Regulatory Element content that is
tailored for each representative or principal registration category
that they hold.
Most commenters were supportive of FINRA's proposed rule
change.\68\ One such commenter stated that it appreciated that member
firms would be allowed greater flexibility to administer the Regulatory
Element in conjunction with other training requirements.\69\ Another
cited: (1) The flexibility it would afford in allowing firms to
complete training prior to December 31; (2) its availability to
individuals via mobile application; and (3) that the proposed
Regulatory Element would still require a comparable amount of overall
continuing education as it did prior to the proposed rule change.\70\
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\68\ See letter from James Rabenstine, Vice President and Chief
Compliance Officer, Nationwide Office of the Chief Legal Officer,
Nationwide Financial Services, Inc. (``NFS''), dated July 13, 2021
(``NFS Letter''); letter from Lisa Hopkins, NASAA President, General
Counsel, and Senior Deputy Commissioner of Securities, West
Virginia, NASAA, dated July 14, 2021 (``NASAA Letter''); letter from
Kevin Zambrowicz, Managing Director and Associate General Counsel,
Securities Industry and Financial Markets Association (``SIFMA''),
dated July 14, 2021 (``SIFMA Letter'').
\69\ See SIFMA Letter at 2.
\70\ See NFS Letter at 1. The NFS Letter also suggested that it
would be helpful for the Regulatory Element topics to be published
by October 1 of each year. FINRA stated that it would publish the
topics by no later than October 1 of each year in order to provide
firms with sufficient time to review the Regulatory Element topics
for each upcoming year. See FINRA Letter at 2 n.4.
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[[Page 53362]]
One commenter, although generally supportive of the proposed rule
change, expressed concern that moving to an annual Regulatory Element
may increase overall costs and burdens, both for firms and registered
persons, associated with an annual increase in required training.\71\
The commenter also suggested that the proposed transition from the
current three-year cycle to an annual requirement may not be
necessary.\72\ Alternatively, the commenter suggested that any
transition be done in two phases: (1) From three years to two years to
determine if its objectives were met; and then (2) from two years to
one year.\73\
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\71\ See letter from Brian Egwele, dated July 2, 2021 (``Egwele
Letter''). FINRA also identified that the cost of changing to an
annual Regulatory Element generally would increase with the number
of representatives at a firm and thus would be higher in aggregate
at a larger firm. However, FINRA stated that economies of scale
likely exist in the application of the proposed requirements such
that the average additional cost of implementing this proposal per
representative at larger firms would likely be lower than at smaller
firms. See Notice, 86 FR at 33435.
\72\ See Egwele Letter (expressing support for the proposed rule
change by stating that, even though the proposed rule change may
increase administrative workload and costs, the ``price is worth it
to remain compliant.'').
\73\ See Egwele Letter.
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In response, FINRA stated that the overall amount of training in a
three-year period would remain approximately the same as the amount of
training currently undertaken by completing the Regulatory Element once
every three years.\74\ Additionally, FINRA explained that the impact on
individuals from increased training requirements, such as the time
commitment associated with those trainings, would be limited in that
the overwhelming majority of registered persons only hold a single
registration category.\75\
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\74\ See Notice, 86 FR at 33430.
\75\ See Notice, 86 FR at 33435. According to FINRA, individuals
with more than one registration category account for approximately
35 percent of all registered persons.
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With respect to the commenter's proposed transition period, FINRA
responded that it believes that a phased implementation with different
timing requirements for any of the proposed components would be overly
complex and cause confusion. Additionally, FINRA stated that a phased
approach would require more resources and could result in greater costs
to keep multiple varying Regulatory Element systems and programs
running, including potential additional costs to firms to track and
manage differing requirements.\76\ For these reasons, FINRA declined to
amend the proposed rule change in response to the commenter's concerns.
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\76\ See FINRA Letter at 3. FINRA also stated that the proposed
rule change includes several interrelated annual Regulatory Element
components: (1) Annual Regulatory Element content for registered
persons; (2) annual Regulatory Element content for non-registered
individuals who are participating in the waiver program under FINRA
Rule 1210.09; and (3) annual Regulatory Element content for
individuals who elect to maintain their qualification status for a
terminated registration category. See id.
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In addition, one commenter opposed the proposed change to increase
the frequency of the Regulatory Element, believing that it would have a
disparate impact on members of underrepresented populations who may
have more limited access to a broadband or high-speed internet
connection.\77\ The commenter also stated that a mobile compatible
format may not be adequate for continuing education given that mobile
devices may not meet all learning needs, and that potential access and
connectivity challenges will also make this an insufficient
solution.\78\ By contrast, a separate commenter was fully supportive of
FINRA making the Regulatory Element available via a mobile-compatible
format on the grounds that it would simplify the process for
individuals that have terminated their registration and wanted to
reenter the industry at some point in their career.\79\
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\77\ See letter from John Watts, Senior Vice President and Chief
Counsel, PFS Investments, Inc. (``PFS''), dated July 15, 2021 (``PFS
Letter''). As noted above, the delivery of the Regulatory Element is
available through CE Online, which allows individuals to complete
the content online at a location of their choosing, including their
private residence. See supra note 19. Additionally, FINRA and the CE
Council have committed to making the annual Regulatory Element
content available to users via a mobile application. See supra note
60.
\78\ See id.
\79\ See NFS Letter at 2 (also expressing support for FINRA's
intention to publish learning topics in advance on the grounds that
it would be helpful for securities industry professionals).
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In response, FINRA stated that it specifically tailored the
proposed rule change to help meet the individual needs of registered
persons and firms.\80\ Accordingly, FINRA stated that the Regulatory
Element would be designed to deliver content in a manner that is
broadly accessible and compatible with the diverse needs of individuals
and their learning needs.\81\ In developing the mobile-compatible
format, which includes a mobile responsive design, FINRA intends mobile
device users to be able to easily, quickly, and intuitively navigate
the Regulatory Element content.\82\ FINRA has committed to developing
the mobile application so that access to the training material and the
overall learning experience is engaging and intuitive for users such
that it would be a comparable to those taking the training on a
desktop.\83\ FINRA believes that these enhancements and the
availability of mobile compatibility would address the potential access
and diversity concerns that the commenter raised.\84\ Furthermore,
FINRA explained that it has made available in the past, and will
continue to do so in the future, additional options for individuals who
may need or prefer other solutions to fulfill their Regulatory Element
content obligations.\85\ For instance, FINRA stated that the Regulatory
Element training would also be accessible in other convenient ways,
including through a computer or other device at a firm location or on
various widely available public and community locations where computer
and broadband internet access is available for free.\86\ For these
reasons, FINRA declined to amend the proposed rule change in response
to the commenter's concerns.
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\80\ See FINRA Letter at 3.
\81\ See id.
\82\ See FINRA Letter at 4 (FINRA committed to structuring and
formatting the Regulatory Element content to ensure that mobile
device users have a comparable experience to that of a desktop user
even in low bandwidth conditions).
\83\ See FINRA Letter at 4.
\84\ See FINRA Letter at 3-4. Additionally, FINRA stated that it
remains committed to understanding specific technology or access
needs and to provide potential solutions. See FINRA Letter at 4.
\85\ See FINRA Letter at 4.
\86\ See id. FINRA offers individuals the option of completing
their Regulatory Element session at test centers in various
locations of every state as well as internationally. Id.
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The Commission finds that the proposed rule change to move to an
annual Regulatory Element training with content tailored to an
individual's representative or principal registration categories is
designed to protect investors and is in the public interest. The
Commission finds that the rule is reasonably designed to minimize the
potential adverse impact on firms and their registered persons.
Furthermore, increasing the timeliness of registered persons' training,
as well as the relevance of the training's content by tailoring it to
each registration category that they hold, would enhance their
education and compliance with their regulatory obligations.
The Commission further finds that a shift to an annual Regulatory
Element training is more advantageous when compared to the current CE
Program in which some existing registered persons may not receive
consistent updated
[[Page 53363]]
training from regulators on regulatory developments for up to three
years. More specifically, transitioning to an annual Regulatory Element
requirement, rather than taking a phased approach, should enhance a
firm's regulatory compliance, and reduce a firm's overall regulatory
risk because of the increased timeliness and relevance of the more
tailored content provided through an annual Regulatory Element
training. Additionally, the Commission also finds that the proposed
rule change would allow firms to maintain some flexibility for
administering the annual Regulatory Element given that firms may
require their registered persons to complete the annual requirement
earlier than December 31 each year so as to coincide with other
training requirements. The Commission also finds that FINRA has
reasonably determined that its proposed mobile accessibility would
provide a flexible, accessible, and effective learning experience for
users who choose to access the Regulatory Element through mobile
technology. The proposed mobile application compatibility would also
likely allow for a more diverse candidate pool by allowing individuals
to reenter or remain in the workforce if they have previously completed
the required examinations and have already proven themselves worthy, as
suggested by a commenter.\87\ Moreover, to the extent registered
persons need or prefer an alternative to mobile compatibility to
fulfill their Regulatory Element obligations, FINRA is committed to
making alternative options available. As outlined above, these
additional options include widely-available test centers as well as
public and community locations where computer and broadband access is
available for free. The Commission finds that FINRA has provided
reasonable solutions to address commenter concerns on accessibility.
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\87\ See NFS Letter at 2.
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Accordingly, for the reasons set forth above, the Commission finds
that the proposed rule change is designed to protect investors and is
in the public interest.
B. Recognition of Other Training Requirements for Firm Element and
Extension of Firm Element Training to All Registered Persons
As stated above, FINRA's proposed rule change would amend Rule
1240(b) to allow for recognition of the successful completion of
existing firm training programs relating to the AML compliance program
and the annual compliance meeting toward satisfying an individual's
annual Firm Element requirement. The proposed rule change would also
amend the rule to extend the Firm Element training requirement to all
registered persons, including individuals who maintain solely a
permissive registration consistent with Rule 1210.02, thereby further
aligning the Firm Element requirement with other broadly-based training
requirements.
A number of commenters addressed the Firm Element training
component of FINRA's proposed rule change. Most commenters supported
allowing the Firm Element to recognize a firm's AML compliance training
and annual compliance meeting as fulfilling that requirement.\88\ One
commenter stated that it appreciated that the Firm Element would
recognize other trainings that members provide to their registered
persons.\89\ Another commenter supported this proposal because (1)
requiring training to cover ``topics related to the role, activities or
responsibilities of the registered person'' \90\ and (2) requiring
members to develop written training plans that are evaluated annually
\91\ should mitigate any concerns that AML compliance and annual
compliance meeting trainings would simply be substituted for more
tailored training requirements.\92\
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\88\ See NFS Letter at 1; SIFMA Letter at 2; NASAA Letter at 1-
2.
\89\ See SIFMA Letter at 2.
\90\ Proposed Rule 1240(b)(2)(B).
\91\ See proposed Rule 1240(b)(2)(A).
\92\ See NASAA Letter at 1-2.
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One commenter stated, however, that a firm's annual needs analysis
and written training plan should not need to be recompleted every year
if the firm has not changed business models.\93\ Additionally, the
commenter recommended that FINRA consider making the Regulatory Element
training the primary, if not the sole means, by which securities
industry personnel are made aware of important rules and issues.\94\
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\93\ See Letter from Anonymous, dated July 1, 2021 (``Anonymous
Letter'').
\94\ See Anonymous Letter.
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In response, FINRA stated that the Firm Element, which is firm-
specific and may vary from firm-to-firm, is a necessary component of
the CE Program, complementing the Regulatory Element, which ensures
that registered persons receive uniform and comprehensive training from
regulators on regulatory developments.\95\ Similarly, FINRA stated that
even if a firm's business model has not changed, the regulatory or
industry developments that may have taken place still necessitate an
annual needs analysis to account for changes in addressing products,
services, or strategies offered by the firm.\96\ For these reasons,
FINRA declined to amend the proposed rule change to eliminate the Firm
Element component of its CE Program in response to the commenter's
concerns.
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\95\ See FINRA Letter at 5.
\96\ See id.
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The Commission finds that proposed Rule 1240(b), which expressly
allows firms to consider training relating to their AML compliance
program and the annual compliance meeting toward satisfying an
individual's annual Firm Element requirement, combined with the
proposed rule's provision to extend the Firm Element requirement to all
registered persons, reasonably aligns the Firm Element requirement with
other required training.
The proposed rule change would allow firms to satisfy the Firm
Element requirement with important, pre-existing AML compliance
training and annual compliance meetings, which should reduce otherwise
duplicative training programs for firms. In addition, extending the
Firm Element requirement to all registered persons at the firm,
including those with permissive registrations, would also help to
ensure a better trained and more compliant securities workforce, which
is to the advantage of the investing public. Furthermore, the
Commission finds that FINRA's determination to retain the Firm Element
of its CE program and the obligation that firms conduct an annual needs
analysis and written training plan, even in the absence of any new
regulatory or industry developments year-to-year, is reasonable.\97\
For these reasons, the Commission finds that the proposed rule change
is designed to protect investors and is in the public interest.
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\97\ See id.
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C. Maintenance of Qualification After Termination of Registration
As stated above, subject to certain conditions, proposed Rule
1240(c), and Supplementary Material .01 and .02 to Rule 1240, would
provide eligible individuals who terminate any of their representative
or principal registrations the option of maintaining their
qualification for any of their terminated registrations for up to five
years without having to requalify by examination or having to obtain an
examination waiver by completing continuing education.\98\
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\98\ See proposed Rule 1240(c) and Supplementary Material .01
and .02 to Rule 1240. See also Notice, 86 FR at 33430.
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Most commenters expressed overall support for FINRA's proposal to
allow registered persons to maintain their
[[Page 53364]]
qualifications for up to five years through continuing education
without the need for reexamination after termination of a
registration.\99\ One commenter stated that the proposed change is one
step in the process to achieving greater diversity and inclusion in the
securities industry by reducing unnecessary barriers to reentry.\100\
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\99\ See SIFMA Letter at 2; NASAA Letter at 2; NFS Letter at 2;
letter from Frederick Greene, Executive Vice President, Woodforest
Wealth Strategies, dated July 11, 2021 (``Woodforest Letter'');
letter from Carrie Chelko, Chief Compliance Officer, Fidelity
Investments, dated July 14, 2021 (``Fidelity Letter''); and letter
from Howard Spindel, Senior Managing Director, Integrated Solutions,
dated July 14, 2021 (``Integrated Letter'').
\100\ See SIFMA Letter at 2.
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Several commenters, however, expressed a preference for a longer
period of time that an individual could maintain their qualifications
following termination of a registration, instead of the five-year
period that FINRA proposed.\101\ One of those commenters strongly
supported this aspect of the proposal as a welcome and necessary
improvement to continuing education, but preferred a seven-year period
of time to maintain qualifications so as to more closely align with the
existing seven-year period in the FSAWP program.\102\ Other commenters
suggested that a seven-year period would be ideal in order to further
enhance the diversity benefits of this proposed rule change.\103\
Another commenter supported a longer period to maintain qualifications,
especially for individuals who are active within the securities
industry in a non-registered capacity who could be ``grandfathered in''
rather than needing to go through a waiver process that the commenter
described as ``onerous'' and ``subjective.'' \104\
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\101\ See Fidelity Letter at 2; Integrated Letter at 2-3; NFS
Letter at 2; and Woodforest Letter at 1.
\102\ See Fidelity Letter at 2.
\103\ See NFS Letter at 2; Woodforest Letter at 1-2.
Additionally, the Woodforest Letter suggested that individuals
availing themselves of this program should be required to complete
at least the minimum Firm Element requirement, including training on
ethics, AML, regulations, and products and, if applicable,
additional continuing education relating to supervisory functions.
In response, FINRA stated that the continuing education content for
individuals who elect the proposed option would consist of a
combination of Regulatory Element content and content selected by
FINRA and the CE Council from the Firm Element content catalog.
According to FINRA, that content would correspond to the
registration category, including any supervisory or principal
registration category, for which individuals wish to maintain their
qualifications. In addition, FINRA stated that the content selected
from the Firm Element content catalog would be based on the minimum
standards for Firm Element training, including training in
professional responsibility. See FINRA Letter at 6. Commenters were
supportive of the content catalog, stating that it would enable more
timely and increased awareness that would enhance customer
protection, for example, by providing relevant information
regarding, among other things, trends in retail investor trading,
regulatory rule changes, and cybersecurity. See NASAA Letter at 1.
See also Fidelity Letter at 1.
\104\ See Integrated Letter at 2-3.
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In response, FINRA stated that it believes the proposed
participation period of up to five years would serve the diversity and
inclusion goals of the proposed rule change while still providing the
appropriate level of training for registered persons and protection for
investors.\105\ In particular, FINRA believes that this proposal would
help attract and retain a broader, more diverse population of
individuals to the securities industry by offering a program that is
sufficiently flexible to meet the individual needs of registered
persons and firms.\106\ Moreover, FINRA believes that limiting this
option to five years would help ensure that individuals' knowledge of
the industry does not become outdated.\107\
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\105\ See FINRA Letter at 6. See also Notice, 86 FR at 33435
(explaining that FINRA believes a length of five years could achieve
the main goals and anticipated benefits of the proposed changes to
the CE Program. FINRA further stated that a seven-year period may
not best protect investors and that a five-year period may better
mitigate the impact of differences with state licensing
requirements.).
\106\ See FINRA Letter at 3.
\107\ See Notice, 86 FR at 33435-36.
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FINRA also stated, however, that the proposed five-year maintenance
option is not intended to address every situation in which an
individual terminates a registration and subsequently decides to
reregister.\108\ FINRA explained it has always provided an individual
who continues to work in the securities industry or a field ancillary
to the securities industry the ability to request an examination waiver
following a significant absence from a registered role or
function.\109\ For the above reasons, FINRA believes that the proposed
new five-year maintenance period is appropriate.\110\
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\108\ See FINRA Letter at 6.
\109\ See id. FINRA further stated that in determining whether
to grant a waiver in such cases, FINRA expressly considers whether
the individual was previously registered, and for how long relative
to the duration of time that the individual has been unregistered.
FINRA also explained that it considers whether the individual worked
in a field ancillary to the securities industry, and for how long,
while unregistered. See id.
\110\ See FINRA Letter at 6.
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Although FINRA declined to amend the participation period at this
time, FINRA stated that it would continue to monitor the efficacy of
the proposed CE Program, which will include a review of the
participation period.\111\
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\111\ See Notice, 86 FR at 33431.
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One commenter, although supporting the proposed rule change, also
suggested that, if the rule change is adopted, FINRA should enhance CRD
to allow states that have not revised existing regulations to
efficiently process registration applications of persons who maintain
their qualifications beyond two years.\112\ In response, FINRA
recognized the benefits to the industry of having further alignment
between FINRA qualification requirements and state licensing
requirements.\113\ Thus, FINRA stated that it would work with NASAA and
state regulators to provide for an appropriate process and system to
allow states to track and process registration requests for individuals
operating under the two- or five-year examination provisions.\114\
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\112\ See NASAA Letter at 2.
\113\ See FINRA Letter at 6.
\114\ See FINRA Letter at 5-6.
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The Commission finds that FINRA's proposed Rule 1240(c), and
proposed Supplementary Material .01 and .02 to Rule 1240, is in the
public interest and would protect investors because it would, among
other things, help enhance the education of registered persons and
their compliance with their regulatory obligations, thus reducing
regulatory risk. In particular, by providing a means for individuals to
maintain their qualifications after termination of a registration for a
longer period of time, the proposed rule change would aid the
securities industry in attracting and retaining a more diverse
workforce. Additionally, this proposed rule change would provide
registered persons with increased flexibility to manage significant
life events, including professional changes and development (such as
pursuing educational goals, a career change to a role in the firm that
is not part of the broker-dealer, working overseas for an extended
period due to a career change or an attempt at a different career path)
or personal life events (such as birth or adoption of a child,
unexpected loss in the family or relocation due to family needs). In
addition, the Commission finds that FINRA's decision to choose five
years as the time period for maintaining qualifications after
termination of a registration, while also continuing to monitor the
efficacy of the proposed CE Program, is reasonable.
The proposed rule change would also increase opportunities for
reentry to the securities industry for individuals who may not have
otherwise been able to do so without retaking their qualification
examinations. As a result, this proposed rule change would provide
firms with a more diverse pool of applicants from under-represented
populations in the
[[Page 53365]]
securities industry, such as female and older registrants. In turn,
this proposed rule change would allow the industry to retain expertise
from skilled individuals, providing investors with the advantage of
greater experience among the individuals working in the industry. For
these reasons, the Commission finds the proposed rule change is
designed to protect investors and is in the public interest.
IV. Conclusion
It is therefore ordered pursuant to Section 19(b)(2) of the
Exchange Act \115\ that the proposed rule change (SR-FINRA-2021-015),
be, and hereby is, approved.
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\115\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\116\
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\116\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20818 Filed 9-24-21; 8:45 am]
BILLING CODE 8011-01-P
