Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend References to FINRA Continuing Education Fees, 4688-4691 [2022-01713]

Download as PDF 4688 Federal Register / Vol. 87, No. 19 / Friday, January 28, 2022 / Notices the Regulatory Element of the Continuing Education Requirements pursuant to Exchange General 4, Section 1240. Likewise, with respect to the $100 MQP Fee, the Exchange does not believe that this proposal creates an unnecessary or inappropriate intramarket burden on competition because the fee will be assessed by FINRA to all individuals electing to participate in the continuing education program under FINRA Rule 1240(c) for each year that such individual is participating in the program. Finally, eliminating the outdated $100 fee for continuing education does not create an unnecessary or inappropriate intramarket burden on competition as test center delivery of the Regulatory Element was phased out and the continuing education programs are no longer offered at testing centers.13 Further, the proposal does not impose an undue burden on competition because the Exchange will not be collecting or retaining these fees, therefore, the Exchange will not be in a position to apply them in an inequitable or unfairly discriminatory manner. Technical Amendment The Exchange’s proposal to make a technical amendment within the FINRA Web CRD Fees does not impose an undue burden on competition as it is a non-substantive amendment. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. jspears on DSK121TN23PROD with NOTICES1 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.14 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– ISE–2022–01 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–ISE–2022–01. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE–2022–01 and should be submitted on or before February 18, 2022. note 8 above. U.S.C. 78s(b)(3)(A)(ii). VerDate Sep<11>2014 18:03 Jan 27, 2022 Jkt 256001 PO 00000 Frm 00137 Fmt 4703 [FR Doc. 2022–01704 Filed 1–27–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments 13 See 14 15 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 J. Matthew DeLesDernier, Assistant Secretary. Sfmt 4703 [Release No. 34–94036; File No. SR– NASDAQ–2022–003] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend References to FINRA Continuing Education Fees January 24, 2022. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 12, 2022, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Nasdaq’s Pricing Schedule at Equity 7, Section 30, Regulatory, Registration and Processing Fees, to reflect adjustments to FINRA Continuing Education Fees. The Exchange also proposes technical amendments to The Nasdaq Stock Market LLC’s (‘‘NOM’’) Options 7, Section 1, General Provisions. While the changes proposed herein are effective upon filing, the Exchange has designated the new Maintaining Qualifications Program (‘‘MQP’’) Fee, elimination of the $100 Continuing Education Session Fee, and technical amendments to become operative on January 31, 2022. Additionally, the Exchange designates an $18 Continuing Education Regulatory Element Session Fee to become operative on January 1, 2023.3 The text of the proposed rule change is available on the Exchange’s website at 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 93928 (January 7, 2022) (SR–FINRA–2021–034). 1 15 E:\FR\FM\28JAN1.SGM 28JAN1 Federal Register / Vol. 87, No. 19 / Friday, January 28, 2022 / Notices https://listingcenter.nasdaq.com/ rulebook/nasdaq/rules, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose jspears on DSK121TN23PROD with NOTICES1 This proposal amends Nasdaq’s Pricing Schedule at Equity 7, Section 30, Regulatory, Registration and Processing Fees, to reflect adjustments to FINRA Continuing Education Fees.4 The FINRA fees are collected and retained by FINRA via Web CRD for the registration of employees of Nasdaq members that are not FINRA members (‘‘Non-FINRA members’’). The Exchange is merely listing these fees on its Pricing Schedule. The Exchange does not collect or retain these fees. Today, Nasdaq Equity 7, Section 30, provides a list of FINRA Web CRD Fees, Fingerprint Processing Fees, and Continuing Education Fees. The Exchange proposes to amend the Continuing Education Fees within Equity 7, Section 30 on behalf of the Exchange. The fees listed within Equity 7, Section 30 reflect fees set by FINRA. Specifically, the Exchange proposes to decrease the $55 Continuing Education Web-based Fee to $18. This amendment is made in accordance with a recent FINRA rule change to adjust to its fees.5 4 FINRA operates Web CRD, the central licensing and registration system for the U.S. securities industry. FINRA uses Web CRD to maintain the qualification, employment and disciplinary histories of registered associated persons of brokerdealers. 5 See note 3 above. On September 21, 2021, the SEC approved amendments to FINRA Rules 1210 (Registration Requirements) and 1240 (Continuing Education Requirements) to, among other things, require registered persons to complete the Regulatory Element of CE annually by December 31 of each year, rather than every three years, and to complete Regulatory Element content for each representative or principal registration category that they hold. See Securities Exchange Act Release No. VerDate Sep<11>2014 18:03 Jan 27, 2022 Jkt 256001 FINRA currently charges a fee of $55 to each individual who completes the Regulatory Element of the Continuing Education Requirements pursuant to Exchange General 4, Section 1240. In conjunction with the amendments to transition to an annual Regulatory Element requirement, FINRA amended the Continuing Education Regulatory Element Session Fee from $55 to $18.6 FINRA indicated in the Continuing Education Fee Filing that it would begin assessing the $18 Continuing Education Regulatory Element Session Fee as of January 1, 2023 to coincide with the effective date of the transition to an annual Regulatory Element requirement.7 The Exchange proposes to eliminate the $100.00 continuing education fee for each individual who is required to complete the S101 or S201. This fee applied to continuing education programs administered at test centers. In 2015, FINRA filed to end test center delivery of the Regulatory Element.8 Effective October 1, 2015, Web-based delivery has been available for the Regulatory Element. The revised fee of $18 is a Web-based delivery. The Exchange proposes to remove the outdated continuing education fee of $100 from its Pricing Schedule related to test center delivery. The Exchange also proposes to adopt a new Maintaining Qualifications Program (‘‘MQP’’) Fee of $100 fee for each individual electing to participate in the continuing education program, following the termination of a registration category, under FINRA Rule 93097 (September 21, 2021), 86 FR 53358 (September 27, 2021) (Order Approving File No. SR–FINRA–2021–015). The Regulatory Element is administered by FINRA and focuses on regulatory requirements and industry standards. The proposed rule change also included amendments to the Firm Element training, which is provided by each firm annually to its registered persons and focuses on securities products, services and strategies the firm offers, firm policies and industry trends. 6 FINRA notes that the proposed $18 annual fee is comparable to the current $55 fee over a threeyear period. Moreover, the proposed fee for the annual Regulatory Element would be the same for all registered persons, regardless of the amount of annual content that they would be required to complete (that is, an individual who holds multiple registrations would be subject to the same proposed $18 annual fee as an individual who holds a single registration). See note 3 above. 7 The Exchange would file to remove the rule text concerning the $55 fee once the $18 fee becomes operative. 8 See Securities Exchange Act Release No. 75581 (July 31, 2015), 80 FR 47018 (August 6, 2015) (SR– FINRA–2015–015) (Order Approving a Proposed Rule Change to Provide a Web-based Delivery Method for Completing the Regulatory Element of the Continuing Education Requirements). FINRA phased out the test center delivery as of July 1, 2016. See FINRA Information Notice dated May 16, 2016 (https://www.finra.org/rules-guidance/notices/ information-notice-051616). PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 4689 1240(c) for each year that such individual is participating in the program. Individuals who elect to participate in the MQP within two years from the termination of a registration would also be assessed any accrued annual fee. The proposed annual fee would be assessed at the time an eligible individual elects to participate in the continuing education program under FINRA Rule 1240(c) and thereafter annually each year that the individual continues in the program. This fee is paid directly to FINRA. FINRA indicated in the Continuing Education Fee Filing that it would begin assessing the $100 MQP fee as of January 31, 2022. With respect to the rule text, the current $55 Continuing Education Fee is being reworded to reflect the elimination of the $100 fee and renamed the ‘‘Continuing Education Regulatory Element Session Fee.’’ The $55 will remain in effect until January 1, 2023 so it is being retained in the Pricing Scheduled with a note that ‘‘This fee will be amended on January 1, 2023 as noted below.’’ The FINRA Fees are user-based and there is no distinction in the cost incurred by FINRA if the user is a FINRA member or a Non-FINRA member. Accordingly, the proposed fees mirror those currently assessed by FINRA. Technical Amendment The Exchange also proposes to make technical amendments to NOM Options 7, Section 1, General Provisions. The Exchange proposes to re-letter the entire section in order to easily cite to the various sections. Proposed ‘‘(a)’’ contains references that the Exchange proposes to alphabetize, without change to the rule text. The Exchange proposes to add a new ‘‘b’’ and header, ‘‘For Purposes of Common Ownership Aggregation of Activity of Affiliated Members and Member Organizations’’ to more clearly delineate the rule text associated with aggregation of the activity of affiliates. The Exchange would also re-letter and re-number that section. A ‘‘c’’ is proposed to be added to the adding and removing liquidity paragraph. A ‘‘d’’ is proposed to be added before the section discussing the determination of tier calculations any day that the market is not open for the entire trading day. Finally, an ‘‘e’’ is proposed before the Collection of Exchange Fees and Other Claims section. E:\FR\FM\28JAN1.SGM 28JAN1 4690 Federal Register / Vol. 87, No. 19 / Friday, January 28, 2022 / Notices jspears on DSK121TN23PROD with NOTICES1 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,9 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,10 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange believes it is reasonable to decrease the $55 Continuing Education Regulatory Element Session Fee for all Registrations to $18 in accordance with an adjustment to FINRA’s fees.11 The Exchange’s rule text will reflect the current rates for continuing education that will be assessed by FINRA as of January 1, 2023. The proposed fee is identical to a fee adopted by FINRA related to its continuing education. The costs are borne by FINRA when a Non-FINRA member engages in continuing education. The Exchange believes eliminating the outdated $100 fee for continuing education is reasonable as test center delivery of the Regulatory Element was phased out in 2016 and the continuing education programs are no longer offered at testing centers.12 The Exchange believes that it is reasonable to adopt a new MQP Fee of $100 for each individual electing to participate in the continuing education program under FINRA Rule 1240(c) for each year that such individual is participating in the program. Individuals who elect to participate in the program within two years from the termination of a registration would also be assessed any accrued annual fee. The proposed fee is identical to a fee adopted by FINRA related to its continuing education. The costs are borne by FINRA when a Non-FINRA member engages in continuing education. Further, the proposal is also equitable and not unfairly discriminatory because the Exchange will not be collecting or retaining these fees, therefore, the Exchange will not be in a position to apply them in an inequitable or unfairly discriminatory manner. Technical Amendment The Exchange’s proposal to make technical amendments within NOM Options 7, Section 1 is reasonable, 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(4) and (5). 11 See note 3 above. 12 See note 8 above. 10 15 VerDate Sep<11>2014 18:03 Jan 27, 2022 equitable and not unfairly discriminatory as the amendments are non-substantive. The amendments will bring greater clarity to the rule text. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that this proposal creates an unnecessary or inappropriate inter-market burden on competition as FINRA’s fees apply to all market participants. Specifically, the Exchange does not believe that this proposal creates an unnecessary or inappropriate intra-market burden on competition as the decreased Continuing Education Regulatory Element Session Fee for all Registrations of $18 will be assessed by FINRA to all Members who are required to complete the Regulatory Element of the Continuing Education Requirements pursuant to Exchange General 4, Section 1240. Likewise, with respect to the $100 MQP Fee, the Exchange does not believe that this proposal creates an unnecessary or inappropriate intramarket burden on competition because the fee will be assessed by FINRA to all individuals electing to participate in the continuing education program under FINRA Rule 1240(c) for each year that such individual is participating in the program. Finally, eliminating the outdated $100 fee for continuing education does not create an unnecessary or inappropriate intramarket burden on competition as test center delivery of the Regulatory Element was phased out and the continuing education programs are no longer offered at testing centers.13 Further, the proposal does not impose an undue burden on competition because the Exchange will not be collecting or retaining these fees, therefore, the Exchange will not be in a position to apply them in an inequitable or unfairly discriminatory manner. Technical Amendment The Exchange’s proposal to make technical amendments within NOM Options 7, Section 1 does not impose an undue burden on competition as the amendments are non-substantive. The amendments will bring greater clarity to the rule text. 13 See Jkt 256001 PO 00000 note 8 above. Frm 00139 Fmt 4703 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.14 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NASDAQ–2022–003 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number R–NASDAQ–2022–003. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than 14 15 Sfmt 4703 E:\FR\FM\28JAN1.SGM U.S.C. 78s(b)(3)(A)(ii). 28JAN1 Federal Register / Vol. 87, No. 19 / Friday, January 28, 2022 / Notices those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NASDAQ–2022–003 and should be submitted on or before February 18, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2022–01713 Filed 1–27–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–94034] Order Granting Application by Nasdaq BX, Inc. for an Exemption Pursuant to Section 36(a) of the Exchange Act From the Rule Filing Requirements of Section 19(b) of the Exchange Act With Respect to Certain Rules Incorporated by Reference jspears on DSK121TN23PROD with NOTICES1 January 24, 2022. Nasdaq BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) has filed with the Securities and Exchange Commission (‘‘Commission’’) an application for an exemption under Section 36(a)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 from the rule filing requirements of Section 19(b) of the Exchange Act 2 with respect to certain rules of the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) that the Exchange seeks to incorporate by reference.3 Section 36 of the Exchange Act, subject to certain limitations, authorizes the Commission to conditionally or unconditionally 15 17 CFR 200.30–3(a)(12). U.S.C. 78mm(a)(1). 2 15 U.S.C. 78s(b). 3 See Letter from Angela S. Dunn, Principal Associate General Counsel, BX, to J. Matthew DeLesDernier, Assistant Secretary, Commission, dated August 26, 2021 (‘‘Exemptive Request’’). 1 15 VerDate Sep<11>2014 18:03 Jan 27, 2022 Jkt 256001 exempt any person, security, or transaction, or any class thereof, from any provision of the Exchange Act or rule thereunder, if necessary or appropriate in the public interest and consistent with the protection of investors. The Exchange has requested, pursuant to Rule 0–12 under the Exchange Act,4 that the Commission grant the Exchange an exemption from the rule filing requirements of Section 19(b) of the Exchange Act for changes to the Exchange’s rules that are effected solely by virtue of a change to a crossreferenced FINRA rule. Specifically, the Exchange requests that it be permitted to incorporate by reference changes made to the FINRA rules that are crossreferenced in the Exchange’s rules identified below, without the need for the Exchange to file separately similar proposed rule changes pursuant to Section 19(b) of the Exchange Act: 5 • General 9, Section 1(b) (Prohibition Against Trading Ahead of Customer Orders) cross-references FINRA Rule 5320 (except for FINRA Rule 5320.02(b) and the reference to FINRA Rule 6420 in FINRA Rule 5320). • General 9, Section 1(c) (Front Running Policy) cross-references FINRA Rule 5270. • General 9, Section 1(f) (Confirmation of Callable Common Stock) cross-references FINRA Rule 2232. • General 9, Section 1(g) (Interfering With the Transfer of Customer Accounts in the Context of Employment Disputes) cross-references FINRA Rule 2140. • General 9, Section 2 (Customers’ Securities or Funds) cross-references FINRA Rule 2150. • General 9, Section 3 (Communications with the Public) cross-references FINRA Rule 2210 (except for FINRA Rule 2210(c)). • General 9, Section 5 (Telemarketing) cross-references FINRA Rule 3230. • General 9, Section 6 (Forwarding of Proxy and Other Issuer-Related Materials) cross-references FINRA Rule 2251. • General 9, Section 7 (Disclosure of Financial Condition, Control Relationship with Issuer and Participation or Interest in Primary or Secondary Distribution) cross-references FINRA Rules 2261, 2262, and 2269. • General 9, Section 8 (SIPC Information) cross-references FINRA Rule 2266. 4 17 CFR 240.0–12. Exemptive Request, supra note 3, at 6. 5 See PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 4691 • General 9, Section 9 (Fairness Opinions) cross-references FINRA Rule 5150. • General 9, Section 10(a) (Recommendations to Customers (Suitability)) cross-references FINRA Rule 2111 (except for the references to FINRA Rule 2214 in FINRA Rule 2111). • General 9, Section 10(c) (Know Your Customer) cross-references FINRA Rule 2090. • General 9, Section 12 (Customer Account Statements) cross-references FINRA Rule 2231. • General 9, Section 13 (Margin Disclosure Statement) cross-references FINRA Rule 2264. • General 9, Section 14 (Approval Procedures for Day-Trading Accounts) cross-references FINRA Rules 2130 and 2270. • General 9, Section 15 (Borrowing From or Lending to Customers) crossreferences FINRA Rule 3240. • General 9, Section 16 (Charges for Services Performed) cross-references FINRA Rule 2122. • General 9, Section 17 (Net Transactions with Customers) crossreferences FINRA Rule 2124. • General 9, Section 19 (Discretionary Accounts) cross-references FINRA Rule 3260. • General 9, Section 20 (Supervision) cross-references FINRA Rules 3110 and 3170. • General 9, Section 21 (Supervisory Control System, Annual Certification of Compliance and Supervisory Processes) cross-references FINRA Rules 3120 and 3130 (except for the references to MSRB rules in FINRA Rule 3130). • General 9, Section 23 (Outside Business Activities of an Associated Person) cross-references FINRA Rule 3270. • General 9, Section 24 (Private Securities Transactions of an Associated Person) cross-references FINRA Rule 3280. • General 9, Section 25 (Transactions for or by Associated Persons) crossreferences FINRA Rule 3210. • General 9, Section 26 (Influencing or Rewarding Employees of Others) cross-references FINRA Rule 3220. • General 9, Section 27 (Reporting Requirements) cross-references FINRA Rule 4530 (except for FINRA Rule 4530(h)). • General 9, Section 28 (Disclosure to Associated Persons When Signing Form U4) cross-references FINRA Rule 2263 (except for subsection (2) of FINRA Rule 2263). • General 9, Section 30 (Books and Records) cross-references FINRA Rule 4511. • General 9, Section 31 (Use of Information Obtained in Fiduciary E:\FR\FM\28JAN1.SGM 28JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 87, Number 19 (Friday, January 28, 2022)]
[Notices]
[Pages 4688-4691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01713]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94036; File No. SR-NASDAQ-2022-003]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend References to FINRA Continuing Education Fees

January 24, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on January 12, 2022, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III, below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Nasdaq's Pricing Schedule at Equity 
7, Section 30, Regulatory, Registration and Processing Fees, to reflect 
adjustments to FINRA Continuing Education Fees.
    The Exchange also proposes technical amendments to The Nasdaq Stock 
Market LLC's (``NOM'') Options 7, Section 1, General Provisions.
    While the changes proposed herein are effective upon filing, the 
Exchange has designated the new Maintaining Qualifications Program 
(``MQP'') Fee, elimination of the $100 Continuing Education Session 
Fee, and technical amendments to become operative on January 31, 2022. 
Additionally, the Exchange designates an $18 Continuing Education 
Regulatory Element Session Fee to become operative on January 1, 
2023.\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 93928 (January 7, 
2022) (SR-FINRA-2021-034).
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    The text of the proposed rule change is available on the Exchange's 
website at

[[Page 4689]]

https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    This proposal amends Nasdaq's Pricing Schedule at Equity 7, Section 
30, Regulatory, Registration and Processing Fees, to reflect 
adjustments to FINRA Continuing Education Fees.\4\ The FINRA fees are 
collected and retained by FINRA via Web CRD for the registration of 
employees of Nasdaq members that are not FINRA members (``Non-FINRA 
members''). The Exchange is merely listing these fees on its Pricing 
Schedule. The Exchange does not collect or retain these fees.
---------------------------------------------------------------------------

    \4\ FINRA operates Web CRD, the central licensing and 
registration system for the U.S. securities industry. FINRA uses Web 
CRD to maintain the qualification, employment and disciplinary 
histories of registered associated persons of broker-dealers.
---------------------------------------------------------------------------

    Today, Nasdaq Equity 7, Section 30, provides a list of FINRA Web 
CRD Fees, Fingerprint Processing Fees, and Continuing Education Fees. 
The Exchange proposes to amend the Continuing Education Fees within 
Equity 7, Section 30 on behalf of the Exchange. The fees listed within 
Equity 7, Section 30 reflect fees set by FINRA.
    Specifically, the Exchange proposes to decrease the $55 Continuing 
Education Web-based Fee to $18. This amendment is made in accordance 
with a recent FINRA rule change to adjust to its fees.\5\ FINRA 
currently charges a fee of $55 to each individual who completes the 
Regulatory Element of the Continuing Education Requirements pursuant to 
Exchange General 4, Section 1240. In conjunction with the amendments to 
transition to an annual Regulatory Element requirement, FINRA amended 
the Continuing Education Regulatory Element Session Fee from $55 to 
$18.\6\ FINRA indicated in the Continuing Education Fee Filing that it 
would begin assessing the $18 Continuing Education Regulatory Element 
Session Fee as of January 1, 2023 to coincide with the effective date 
of the transition to an annual Regulatory Element requirement.\7\
---------------------------------------------------------------------------

    \5\ See note 3 above. On September 21, 2021, the SEC approved 
amendments to FINRA Rules 1210 (Registration Requirements) and 1240 
(Continuing Education Requirements) to, among other things, require 
registered persons to complete the Regulatory Element of CE annually 
by December 31 of each year, rather than every three years, and to 
complete Regulatory Element content for each representative or 
principal registration category that they hold. See Securities 
Exchange Act Release No. 93097 (September 21, 2021), 86 FR 53358 
(September 27, 2021) (Order Approving File No. SR-FINRA-2021-015). 
The Regulatory Element is administered by FINRA and focuses on 
regulatory requirements and industry standards. The proposed rule 
change also included amendments to the Firm Element training, which 
is provided by each firm annually to its registered persons and 
focuses on securities products, services and strategies the firm 
offers, firm policies and industry trends.
    \6\ FINRA notes that the proposed $18 annual fee is comparable 
to the current $55 fee over a three-year period. Moreover, the 
proposed fee for the annual Regulatory Element would be the same for 
all registered persons, regardless of the amount of annual content 
that they would be required to complete (that is, an individual who 
holds multiple registrations would be subject to the same proposed 
$18 annual fee as an individual who holds a single registration). 
See note 3 above.
    \7\ The Exchange would file to remove the rule text concerning 
the $55 fee once the $18 fee becomes operative.
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    The Exchange proposes to eliminate the $100.00 continuing education 
fee for each individual who is required to complete the S101 or S201. 
This fee applied to continuing education programs administered at test 
centers. In 2015, FINRA filed to end test center delivery of the 
Regulatory Element.\8\ Effective October 1, 2015, Web-based delivery 
has been available for the Regulatory Element. The revised fee of $18 
is a Web-based delivery. The Exchange proposes to remove the outdated 
continuing education fee of $100 from its Pricing Schedule related to 
test center delivery.
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    \8\ See Securities Exchange Act Release No. 75581 (July 31, 
2015), 80 FR 47018 (August 6, 2015) (SR-FINRA-2015-015) (Order 
Approving a Proposed Rule Change to Provide a Web-based Delivery 
Method for Completing the Regulatory Element of the Continuing 
Education Requirements). FINRA phased out the test center delivery 
as of July 1, 2016. See FINRA Information Notice dated May 16, 2016 
(https://www.finra.org/rules-guidance/notices/information-notice-051616).
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    The Exchange also proposes to adopt a new Maintaining 
Qualifications Program (``MQP'') Fee of $100 fee for each individual 
electing to participate in the continuing education program, following 
the termination of a registration category, under FINRA Rule 1240(c) 
for each year that such individual is participating in the program. 
Individuals who elect to participate in the MQP within two years from 
the termination of a registration would also be assessed any accrued 
annual fee. The proposed annual fee would be assessed at the time an 
eligible individual elects to participate in the continuing education 
program under FINRA Rule 1240(c) and thereafter annually each year that 
the individual continues in the program. This fee is paid directly to 
FINRA. FINRA indicated in the Continuing Education Fee Filing that it 
would begin assessing the $100 MQP fee as of January 31, 2022.
    With respect to the rule text, the current $55 Continuing Education 
Fee is being reworded to reflect the elimination of the $100 fee and 
renamed the ``Continuing Education Regulatory Element Session Fee.'' 
The $55 will remain in effect until January 1, 2023 so it is being 
retained in the Pricing Scheduled with a note that ``This fee will be 
amended on January 1, 2023 as noted below.''
    The FINRA Fees are user-based and there is no distinction in the 
cost incurred by FINRA if the user is a FINRA member or a Non-FINRA 
member. Accordingly, the proposed fees mirror those currently assessed 
by FINRA.
Technical Amendment
    The Exchange also proposes to make technical amendments to NOM 
Options 7, Section 1, General Provisions. The Exchange proposes to re-
letter the entire section in order to easily cite to the various 
sections. Proposed ``(a)'' contains references that the Exchange 
proposes to alphabetize, without change to the rule text.
    The Exchange proposes to add a new ``b'' and header, ``For Purposes 
of Common Ownership Aggregation of Activity of Affiliated Members and 
Member Organizations'' to more clearly delineate the rule text 
associated with aggregation of the activity of affiliates. The Exchange 
would also re-letter and re-number that section.
    A ``c'' is proposed to be added to the adding and removing 
liquidity paragraph.
    A ``d'' is proposed to be added before the section discussing the 
determination of tier calculations any day that the market is not open 
for the entire trading day.
    Finally, an ``e'' is proposed before the Collection of Exchange 
Fees and Other Claims section.

[[Page 4690]]

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\9\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\10\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility, and is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes it is reasonable to decrease the $55 
Continuing Education Regulatory Element Session Fee for all 
Registrations to $18 in accordance with an adjustment to FINRA's 
fees.\11\ The Exchange's rule text will reflect the current rates for 
continuing education that will be assessed by FINRA as of January 1, 
2023. The proposed fee is identical to a fee adopted by FINRA related 
to its continuing education. The costs are borne by FINRA when a Non-
FINRA member engages in continuing education.
---------------------------------------------------------------------------

    \11\ See note 3 above.
---------------------------------------------------------------------------

    The Exchange believes eliminating the outdated $100 fee for 
continuing education is reasonable as test center delivery of the 
Regulatory Element was phased out in 2016 and the continuing education 
programs are no longer offered at testing centers.\12\
---------------------------------------------------------------------------

    \12\ See note 8 above.
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    The Exchange believes that it is reasonable to adopt a new MQP Fee 
of $100 for each individual electing to participate in the continuing 
education program under FINRA Rule 1240(c) for each year that such 
individual is participating in the program. Individuals who elect to 
participate in the program within two years from the termination of a 
registration would also be assessed any accrued annual fee. The 
proposed fee is identical to a fee adopted by FINRA related to its 
continuing education. The costs are borne by FINRA when a Non-FINRA 
member engages in continuing education.
    Further, the proposal is also equitable and not unfairly 
discriminatory because the Exchange will not be collecting or retaining 
these fees, therefore, the Exchange will not be in a position to apply 
them in an inequitable or unfairly discriminatory manner.
Technical Amendment
    The Exchange's proposal to make technical amendments within NOM 
Options 7, Section 1 is reasonable, equitable and not unfairly 
discriminatory as the amendments are non-substantive. The amendments 
will bring greater clarity to the rule text.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not believe 
that this proposal creates an unnecessary or inappropriate inter-market 
burden on competition as FINRA's fees apply to all market participants. 
Specifically, the Exchange does not believe that this proposal creates 
an unnecessary or inappropriate intra-market burden on competition as 
the decreased Continuing Education Regulatory Element Session Fee for 
all Registrations of $18 will be assessed by FINRA to all Members who 
are required to complete the Regulatory Element of the Continuing 
Education Requirements pursuant to Exchange General 4, Section 1240. 
Likewise, with respect to the $100 MQP Fee, the Exchange does not 
believe that this proposal creates an unnecessary or inappropriate 
intra-market burden on competition because the fee will be assessed by 
FINRA to all individuals electing to participate in the continuing 
education program under FINRA Rule 1240(c) for each year that such 
individual is participating in the program. Finally, eliminating the 
outdated $100 fee for continuing education does not create an 
unnecessary or inappropriate intra-market burden on competition as test 
center delivery of the Regulatory Element was phased out and the 
continuing education programs are no longer offered at testing 
centers.\13\ Further, the proposal does not impose an undue burden on 
competition because the Exchange will not be collecting or retaining 
these fees, therefore, the Exchange will not be in a position to apply 
them in an inequitable or unfairly discriminatory manner.
---------------------------------------------------------------------------

    \13\ See note 8 above.
---------------------------------------------------------------------------

Technical Amendment
    The Exchange's proposal to make technical amendments within NOM 
Options 7, Section 1 does not impose an undue burden on competition as 
the amendments are non-substantive. The amendments will bring greater 
clarity to the rule text.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\14\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NASDAQ-2022-003 on the subject line.

Paper Comments

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

All submissions should refer to File Number R-NASDAQ-2022-003. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than

[[Page 4691]]

those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NASDAQ-2022-003 and should 
be submitted on or before February 18, 2022.
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    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01713 Filed 1-27-22; 8:45 am]
BILLING CODE 8011-01-P

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