Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Continuing Education Requirements, 18419-18422 [2022-06637]
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Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices
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the restructuring notification process.
Specifically, the current bilateral
notification process creates plausible
operational and legal risks if LCH SA is
not provided in due time by its Clearing
Member with the relevant restructuring
notice sent by the client. To remove any
unnecessary dependency on the
bilateral notification process and duties
between the Clearing Members(s) and
client(s) in the context of a restructuring
event for swaptions, the Proposed Rule
Change is designed to implement a
delegation mechanism whereby clients
of Clearing Members shall be appointed
as their Restructuring Delegation
Beneficiaries for the purposes of
sending and receiving the relevant
notices to the other Clearing Member(s)
or Client(s) in the event of a
restructuring affecting the swaptions
registered in their relevant Client
Account Structure.
By implementing a relevant and
consistent delegation legal mechanism,
the Proposed Rule Change is reducing
potential legal risk at LCH SA and is
therefore consistent with the
requirements of a well-founded, clear,
transparent, and enforceable legal
framework of Exchange Act Rule 17Ad–
22(e)(1).9
For the reasons stated above, LCH SA
believes that the Proposed Rule Change
with respect to the Supplement and
Procedures in connection with the
implementation of the delegation
mechanism for the restructuring
notification process for swaptions are
consistent with the requirements of
prompt and accurate clearance and
settlement of securities transactions in
Section 17(A)(b)(3)(F) 10 of the Act and
the requirements of operational risk
management in Rule 17Ad–22(e)(17) 11
and of a well-founded legal framework
in Rule 17Ad–22(e)(1).12
B. Clearing Agency’s Statement on
Burden on Competition
Section 17A(b)(3)(I) of the Act
requires that the rules of a clearing
agency not impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act.13 LCH SA does not
believe that the proposed rule change
would impose burdens on competition
that are not necessary or appropriate in
furtherance of the purposes of the Act.
Specifically, the proposed changes to
the Supplement and Procedures would
apply equally to all Clearing Members
9 17
CFR 240.17Ad–22(e)(1).
U.S.C. 78q–1(b)(3)(F).
11 17 CFR 240.17Ad–22(e)(17).
12 17 CFR 240.17Ad–22(e)(1).
13 15 U.S.C. 78q–1(b)(3)(I).
10 15
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and their Clients. This would remove
the burden on clearing brokers from
needing the operational capacity to
intermediate the sending and receiving
of notices from clients, thereby
improving the competitive landscape for
clearing brokers wishing to support the
clearing of options. Therefore, LCH SA
does not believe that the proposed rule
change would impose a burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act.
C. Clearing Agency’s Statement on
Comments on the Proposed Rule
Change Received From Members,
Participants or Others
Written comments relating to the
proposed rule change have not been
solicited or received. LCH SA will
notify the Commission of any written
comments received by LCH SA.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) By order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be 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–
LCH SA–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 SR–LCH SA–2022–003. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
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18419
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 LCH SA and on LCH SA’s
website at: https://www.lch.com/
resources/rulebooks/proposed-rulechanges.
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–LCH SA–2022–003
and should be submitted on or before
April 20, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–06628 Filed 3–29–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94515; File No. SR–LTSE–
2022–02]
Self-Regulatory Organizations; LongTerm Stock Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Related to
Continuing Education Requirements
March 24, 2022.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 15,
2022, Long-Term Stock Exchange, Inc.
14 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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Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices
(‘‘LTSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing with the
Commission a proposed rule change to
adopt new LTSE Rule 2.154 and amend
LTSE Rule 2.160. The proposed rule
change is based on recent changes made
by the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) to its
Continuing Education Program 3 (the
‘‘CE Transformation Initiative’’), which
includes a change to provide a path
through continuing education for
individuals to maintain their
qualification following the termination
of a registration.
The text of the proposed rule change
is available at the Exchange’s website at
https://longtermstockexchange.com/, 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
self-regulatory organization included
statements concerning the purpose of
and basis for the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange sets forth certain
continuing education requirements for
persons associated with a Member
which are based on certain FINRA
rules.4 The proposed rule change seeks
to amend certain LTSE rules to more
3 See Securities Exchange Act Rel. No. 93097
(September 21, 2021), 86 FR 53358 (September 27,
2021) (Order Approving File No. SR–FINRA–2021–
015) (the ‘‘Approval Order’’).
4 Id.
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closely mirror FINRA rules, as amended
as part of the CE Transformation
Initiative.
Specifically, the proposed rule change
would (i) adopt new LTSE Rule 2.154 to
incorporate by reference FINRA Rule
1240(c) and Supplementary Material .01
and .02, which addresses how an
associated person of a member can
maintain their qualifications following
the termination of a registration
category, (ii) delete LTSE Rule 2.160(o)
(Lapse of Registration and Expiration of
SIE) because its substance is being
replaced by new Rule 2.154, and (iii)
amend Supplementary Material .01 to
LTSE Rule 2.160(g) to state that effective
March 15, 2022, LTSE will not accept
any new initial designations for waiver
for persons working for a financial
services industry affiliate of a Member
as specified therein. Each of these
proposed changes align with changes to
FINRA’s Continuing Education
Program,5 which are scheduled to
become effective on March 15, 2022.6
The proposed rule change is part of a
larger initiative in which LTSE intends
to align the structure of its registration,
continuing education and supervision
rules with those of FINRA. As noted
above, however, the proposed rule
change addresses only those changes
that become effective on March 15,
2022.
(i) Maintenance of Qualification After
Termination of Registration
Effective March 15, 2022, FINRA has
established a program providing eligible
individuals who terminate any of their
representative or principal registrations
with the option of maintaining their
qualification for certain terminated
registrations by completing annual
continuing education (‘‘Maintaining
Qualifications Program’’ or ‘‘MQP’’).
The rule change provides individuals
who elect this option a maximum of five
years in which to re-register with a
member firm without having to
requalify by exam or having to obtain an
exam waiver by adopting paragraph (c)
under FINRA Rule 1240 and related
Supplementary Material .01 and .02.The
amended FINRA rule did not eliminate
the two-year qualification period.7
5 Id.
6 See FINRA Rules 1210 and 1240. In FINRA
Regulatory Notice 21–41 (November 17, 2021),
FINRA announced the amendment of Rules 1210
and 1240, noting effective dates, March 15, 2022
(with respect to paragraph (c) of Rule 1240 and
Supplementary Material .09 to Rule 1210)); January
1, 2023 (all other rule changes).
7 See Approval Order, supra note 3 at 53360 (The
‘‘two-year qualification period’’ is defined as,
‘‘Currently, individuals whose registrations as
representatives or principals have been terminated
for two or more years may reregister as
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Rather, it provides such individuals an
alternative means of staying current on
their regulatory and securities
knowledge following the termination of
a registration(s). Eligible individuals
who elect not to participate in the
proposed continuing education program
will continue to be subject to the current
two-year qualification period. This rule
change is generally aligned with other
professional continuing education
programs that allow individuals to
maintain their qualification to work in
their respective fields during a period of
absence from their careers (including an
absence of more than two years) by
satisfying continuing education
requirements for their credentials.
FINRA’s rule change would impose the
following conditions and limitations:
• Individuals would be required to be
registered in the terminated registration
category for at least one year
immediately prior to the termination of
that category; 8
• individuals could elect to
participate when they terminate a
registration or within two years from the
termination of a registration; 9
• individuals would be required to
complete annually all prescribed
continuing education;
• individuals would have a maximum
of five years in which to re-register; 10
• 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; 11 and
• 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 or continue.12
FINRA has included a look-back
provision in the amended rules that
would, subject to specified conditions,
extend the proposed option to
individuals who have been registered as
a representative or principal within two
years immediately prior to the
implementation date of the rule change
and individuals who have been
Financial Services Affiliate Waiver
Program (‘‘FSAWP’’) participants 13
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).’’).
8 See FINRA Rule 1240(c)(1).
9 See FINRA Rule 1240(c)(2).
10 See FINRA Rule 1240(c).
11 See FINRA Rules 1240(c)(4) and (c)(5).
12 See FINRA Rules 1240(c)(1) and (c)(6).
13 See Supplementary Material .09 to FINRA Rule
1210.
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Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices
immediately prior to the
implementation date of the proposed
rule change.14
In addition, the amended
Supplementary Material .02 to FINRA
Rule 1240 includes a re-eligibility
provision that would allow individuals
to regain eligibility to participate each
time they re-register 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.15 Eligible participating
individuals would be eligible to
maintain their qualifications for up to
five years.
To align with the changes discussed
above, proposed new LTSE Rule 2.154
would state that LTSE Members and
associated persons of a Member shall
comply with FINRA Rule 1240(c) and
Supplementary Material .01 and .02, as
if such Rule were part of the Exchange’s
Rules. Additionally, for the purpose of
LTSE Rule 2.154, cross-references in
incorporated FINRA Rule 1240(c) to
FINRA Rule 1240(a)(2) shall refer to
LTSE Rule 2.160(p)(1) (Regulatory
Element). The proposed rule change
would delete LTSE Rule 2.160(o) as the
approach to a lapse in registration
would be covered by new LTSE Rule
2.154.
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(ii) Waiver of Examinations for
Individuals Working for a Financial
Services Industry Affiliate of a Member
In connection with this new
continuing education regime, FINRA
amended Supplementary Material .09 to
its Rule 1210 to state that it will not
accept any new participants for the
FSAWP beginning on March 15, 2022.
To mirror changes to its FSAWP, LTSE
has added new language to
Supplementary Material .01 in LTSE
Rule 2.160(g) to note that effective
March 15, 2022, LTSE will not accept
any new initial designations for
individuals under its identical FSAWP.
2. Statutory Basis
LTSE believes that its proposal is
consistent with Section 6(b) of the Act 16
in general, and furthers the objectives of
Section 6(b)(5) of the Act,17 in
particular, in that it is designed to
prevent fraudulent and manipulative
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
14 See Supplementary Material .01 to FINRA Rule
1240.
15 See Supplementary Material .02 to FINRA Rule
1240.
16 15 U.S.C. 78f.
17 15 U.S.C. 78f(b)(6).
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processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest.
As noted above, the proposed rule
change seeks to align the Exchange’s
Rules with certain recent changes to
FINRA rules which have been approved
by the Commission.18 The Exchange
believes the proposed rule change is
consistent with the provisions of
Section 6(b)(5) of the Act,19 which
requires, among other things, that
Exchange Rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest, and Section 6(c)(3) of
the Act,20 which authorizes the
Exchange to prescribe standards of
training, experience and competence for
persons associated with the Exchange.
The proposed changes are based on the
changes approved by the Commission in
the Approval Order,21 and the Exchange
is proposing to adopt such changes
substantially in the same form proposed
by FINRA with respect to the MQP and
FSAWP provisions. The Exchange
believes the proposal is consistent with
the Act for the reasons described above
and for those reasons cited in the
Approval Order.22
The Exchange believes that
establishing a path for individuals to
maintain their qualification following
the termination of a registration will
reduce unnecessary impediments to
requalification and promote greater
diversity and inclusion in the securities
industry without diminishing investor
protection.
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes that the proposed
rule change, which harmonizes its rules
with recent rule changes adopted by
FINRA, will reduce the regulatory
burden placed on market participants
engaged in trading activities across
different markets.
18 See
Approval Order, supra note 3.
U.S.C. 78f(b)(5).
20 15 U.S.C. 78f(c)(3).
21 See Approval Order, supra note 3.
22 Id.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 23 and Rule 19b–
4(f)(6) 24 thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii), the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
this proposed rule change may become
operative immediately upon filing. Rule
19b–4(f)(6)(iii) 25 requires a selfregulatory organization to give the
Commission written notice of its intent
to file a proposed rule change under that
subsection at least five business days
prior to the date of filing, or such
shorter time as designated by the
Commission. The Exchange has
provided such notice.
Waiver of the 30-day operative delay
would allow the Exchange to implement
proposed changes to the Maintaining
Qualifications Program by March 15,
2022 to coincide with FINRA’s
announced implementation date,
thereby eliminating the possibility of a
significant regulatory gap between the
FINRA and LTSE rules, providing more
uniform standards across the securities
industry, and helping to avoid
confusion for registered persons of the
Exchange that are also FINRA members.
For these reasons, the Commission
believes that waiver of the 30-day
operative delay for this proposal is
consistent with the protection of
investors and the public interest.
Accordingly, the Commission hereby
waives the 30-day operative delay and
19 15
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18421
23 15
U.S.C. 78s(b)(3).
CFR 240.19b–4(f)(6).
25 17 CFR 240.19b–4(f)(6)(iii).
24 17
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Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices
designates the proposal operative upon
filing.26
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
khammond on DSKJM1Z7X2PROD with NOTICES
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–
LTSE–2022–02 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–LTSE–2022–02. 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
26 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule change’s impact on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
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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 LTSE and on its internet
website at https://longterm
stockexchange.com/.
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–LTSE–2022–02 and
should be submitted on or before April
20, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–06637 Filed 3–29–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–94514; File No. SR–C2–
2022–007]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fees
Schedule
March 24, 2022.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 14,
2022, Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) filed with the
Securities and Exchange Commission
(the ‘‘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
Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2 Options’’) proposes
to amend its Fees Schedule. The text of
the proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/ctwo/),
27 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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at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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
The Exchange proposes to amend its
Fees Schedule to adopt fees for
Certification Logical Port fees, effective
March 1, 2022.3
By way of background, the Exchange
offers a variety of logical ports, which
provide users with the ability within the
Exchange’s System to accomplish a
specific function through a connection,
such as order entry, data receipt or
access to information. Specifically, the
Exchange offers BOE and FIX Logical
Ports, 4 BOE Bulk Logical Ports, 5 Drop
Logical Ports, 6 Purge Ports, 7 GRP Ports
and Multicast PITCH/Top Spin Server
Ports.8 For each type of the
aforementioned logical ports that is
used in the production environment, the
Exchange also offers corresponding
ports which provide Trading Permit
Holders (‘‘TPHs’’) and non-TPHs access
to the Exchange’s certification
environment to test proprietary systems
and applications (i.e., ‘‘Certification
Logical Ports’’). The certification
3 The Exchange initially filed the proposed fee
changes on March 1, 2022 (SR–C2–2022–006). On
March 14, 2022, the Exchange withdrew that filing
and submitted this proposal.
4 BOE or FIX Logical Ports provide users the
ability to enter order/quotes.
5 BOE Bulk Ports provide users with the ability
to submit single and bulk order messages to enter,
modify, or cancel orders designated as Post Only
Orders with a Time-in-Force of Day or GTD with
an expiration time on that trading day.
6 Drop Logical Ports grants users the ability to
receive and/or send drop copies.
7 Purge Ports allow users to submit a cancelation
for all open orders, or a subset thereof, across
multiple sessions under the same Executing Firm ID
(‘‘EFID’’).
8 Spin Ports and GRP Ports are used to request
and receive a retransmission of data from the
Exchange’s Multicast PITCH/Top data feeds.
E:\FR\FM\30MRN1.SGM
30MRN1
]]>Agencies
[Federal Register Volume 87, Number 61 (Wednesday, March 30, 2022)]
[Notices]
[Pages 18419-18422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-06637]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94515; File No. SR-LTSE-2022-02]
Self-Regulatory Organizations; Long-Term Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Related to Continuing Education Requirements
March 24, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 15, 2022, Long-Term Stock Exchange, Inc.
[[Page 18420]]
(``LTSE'' or the ``Exchange'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I and II below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing with the Commission a proposed rule change
to adopt new LTSE Rule 2.154 and amend LTSE Rule 2.160. The proposed
rule change is based on recent changes made by the Financial Industry
Regulatory Authority, Inc. (``FINRA'') to its Continuing Education
Program \3\ (the ``CE Transformation Initiative''), which includes a
change to provide a path through continuing education for individuals
to maintain their qualification following the termination of a
registration.
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\3\ See Securities Exchange Act Rel. No. 93097 (September 21,
2021), 86 FR 53358 (September 27, 2021) (Order Approving File No.
SR-FINRA-2021-015) (the ``Approval Order'').
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The text of the proposed rule change is available at the Exchange's
website at https://longtermstockexchange.com/, 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 self-regulatory organization
included statements concerning the purpose of and basis for the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in Sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange sets forth certain continuing education requirements
for persons associated with a Member which are based on certain FINRA
rules.\4\ The proposed rule change seeks to amend certain LTSE rules to
more closely mirror FINRA rules, as amended as part of the CE
Transformation Initiative.
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\4\ Id.
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Specifically, the proposed rule change would (i) adopt new LTSE
Rule 2.154 to incorporate by reference FINRA Rule 1240(c) and
Supplementary Material .01 and .02, which addresses how an associated
person of a member can maintain their qualifications following the
termination of a registration category, (ii) delete LTSE Rule 2.160(o)
(Lapse of Registration and Expiration of SIE) because its substance is
being replaced by new Rule 2.154, and (iii) amend Supplementary
Material .01 to LTSE Rule 2.160(g) to state that effective March 15,
2022, LTSE will not accept any new initial designations for waiver for
persons working for a financial services industry affiliate of a Member
as specified therein. Each of these proposed changes align with changes
to FINRA's Continuing Education Program,\5\ which are scheduled to
become effective on March 15, 2022.\6\
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\5\ Id.
\6\ See FINRA Rules 1210 and 1240. In FINRA Regulatory Notice
21-41 (November 17, 2021), FINRA announced the amendment of Rules
1210 and 1240, noting effective dates, March 15, 2022 (with respect
to paragraph (c) of Rule 1240 and Supplementary Material .09 to Rule
1210)); January 1, 2023 (all other rule changes).
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The proposed rule change is part of a larger initiative in which
LTSE intends to align the structure of its registration, continuing
education and supervision rules with those of FINRA. As noted above,
however, the proposed rule change addresses only those changes that
become effective on March 15, 2022.
(i) Maintenance of Qualification After Termination of Registration
Effective March 15, 2022, FINRA has established a program providing
eligible individuals who terminate any of their representative or
principal registrations with the option of maintaining their
qualification for certain terminated registrations by completing annual
continuing education (``Maintaining Qualifications Program'' or
``MQP''). The rule change provides individuals who elect this option a
maximum of five years in which to re-register with a member firm
without having to requalify by exam or having to obtain an exam waiver
by adopting paragraph (c) under FINRA Rule 1240 and related
Supplementary Material .01 and .02.The amended FINRA rule did not
eliminate the two-year qualification period.\7\ Rather, it provides
such individuals an alternative means of staying current on their
regulatory and securities knowledge following the termination of a
registration(s). Eligible individuals who elect not to participate in
the proposed continuing education program will continue to be subject
to the current two-year qualification period. This rule change is
generally aligned with other professional continuing education programs
that allow individuals to maintain their qualification to work in their
respective fields during a period of absence from their careers
(including an absence of more than two years) by satisfying continuing
education requirements for their credentials. FINRA's rule change would
impose the following conditions and limitations:
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\7\ See Approval Order, supra note 3 at 53360 (The ``two-year
qualification period'' is defined as, ``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).'').
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Individuals would be required to be registered in the
terminated registration category for at least one year immediately
prior to the termination of that category; \8\
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\8\ See FINRA Rule 1240(c)(1).
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individuals could elect to participate when they terminate
a registration or within two years from the termination of a
registration; \9\
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\9\ See FINRA Rule 1240(c)(2).
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individuals would be required to complete annually all
prescribed continuing education;
individuals would have a maximum of five years in which to
re-register; \10\
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\10\ See FINRA Rule 1240(c).
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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; \11\
and
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\11\ See FINRA Rules 1240(c)(4) and (c)(5).
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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 or continue.\12\
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\12\ See FINRA Rules 1240(c)(1) and (c)(6).
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FINRA has included a look-back provision in the amended rules that
would, subject to specified conditions, extend the proposed option to
individuals who have been registered as a representative or principal
within two years immediately prior to the implementation date of the
rule change and individuals who have been Financial Services Affiliate
Waiver Program (``FSAWP'') participants \13\
[[Page 18421]]
immediately prior to the implementation date of the proposed rule
change.\14\
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\13\ See Supplementary Material .09 to FINRA Rule 1210.
\14\ See Supplementary Material .01 to FINRA Rule 1240.
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In addition, the amended Supplementary Material .02 to FINRA Rule
1240 includes a re-eligibility provision that would allow individuals
to regain eligibility to participate each time they re-register 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.\15\ Eligible participating individuals
would be eligible to maintain their qualifications for up to five
years.
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\15\ See Supplementary Material .02 to FINRA Rule 1240.
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To align with the changes discussed above, proposed new LTSE Rule
2.154 would state that LTSE Members and associated persons of a Member
shall comply with FINRA Rule 1240(c) and Supplementary Material .01 and
.02, as if such Rule were part of the Exchange's Rules. Additionally,
for the purpose of LTSE Rule 2.154, cross-references in incorporated
FINRA Rule 1240(c) to FINRA Rule 1240(a)(2) shall refer to LTSE Rule
2.160(p)(1) (Regulatory Element). The proposed rule change would delete
LTSE Rule 2.160(o) as the approach to a lapse in registration would be
covered by new LTSE Rule 2.154.
(ii) Waiver of Examinations for Individuals Working for a Financial
Services Industry Affiliate of a Member
In connection with this new continuing education regime, FINRA
amended Supplementary Material .09 to its Rule 1210 to state that it
will not accept any new participants for the FSAWP beginning on March
15, 2022. To mirror changes to its FSAWP, LTSE has added new language
to Supplementary Material .01 in LTSE Rule 2.160(g) to note that
effective March 15, 2022, LTSE will not accept any new initial
designations for individuals under its identical FSAWP.
2. Statutory Basis
LTSE believes that its proposal is consistent with Section 6(b) of
the Act \16\ in general, and furthers the objectives of Section 6(b)(5)
of the Act,\17\ in particular, in that it is designed to prevent
fraudulent and manipulative practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general to
protect investors and the public interest.
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\16\ 15 U.S.C. 78f.
\17\ 15 U.S.C. 78f(b)(6).
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As noted above, the proposed rule change seeks to align the
Exchange's Rules with certain recent changes to FINRA rules which have
been approved by the Commission.\18\ The Exchange believes the proposed
rule change is consistent with the provisions of Section 6(b)(5) of the
Act,\19\ which requires, among other things, that Exchange Rules must
be designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, and, in general, to
protect investors and the public interest, and Section 6(c)(3) of the
Act,\20\ which authorizes the Exchange to prescribe standards of
training, experience and competence for persons associated with the
Exchange. The proposed changes are based on the changes approved by the
Commission in the Approval Order,\21\ and the Exchange is proposing to
adopt such changes substantially in the same form proposed by FINRA
with respect to the MQP and FSAWP provisions. The Exchange believes the
proposal is consistent with the Act for the reasons described above and
for those reasons cited in the Approval Order.\22\
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\18\ See Approval Order, supra note 3.
\19\ 15 U.S.C. 78f(b)(5).
\20\ 15 U.S.C. 78f(c)(3).
\21\ See Approval Order, supra note 3.
\22\ Id.
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The Exchange believes that establishing a path for individuals to
maintain their qualification following the termination of a
registration will reduce unnecessary impediments to requalification and
promote greater diversity and inclusion in the securities industry
without diminishing investor protection.
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 that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change, which harmonizes its rules with recent rule
changes adopted by FINRA, will reduce the regulatory burden placed on
market participants engaged in trading activities across different
markets.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \23\ and Rule 19b-
4(f)(6) \24\ thereunder.
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\23\ 15 U.S.C. 78s(b)(3).
\24\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
pursuant to Rule 19b-4(f)(6)(iii), the Commission may designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has asked the
Commission to waive the 30-day operative delay so that this proposed
rule change may become operative immediately upon filing. Rule 19b-
4(f)(6)(iii) \25\ requires a self-regulatory organization to give the
Commission written notice of its intent to file a proposed rule change
under that subsection at least five business days prior to the date of
filing, or such shorter time as designated by the Commission. The
Exchange has provided such notice.
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\25\ 17 CFR 240.19b-4(f)(6)(iii).
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Waiver of the 30-day operative delay would allow the Exchange to
implement proposed changes to the Maintaining Qualifications Program by
March 15, 2022 to coincide with FINRA's announced implementation date,
thereby eliminating the possibility of a significant regulatory gap
between the FINRA and LTSE rules, providing more uniform standards
across the securities industry, and helping to avoid confusion for
registered persons of the Exchange that are also FINRA members. For
these reasons, the Commission believes that waiver of the 30-day
operative delay for this proposal is consistent with the protection of
investors and the public interest. Accordingly, the Commission hereby
waives the 30-day operative delay and
[[Page 18422]]
designates the proposal operative upon filing.\26\
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\26\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-LTSE-2022-02 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-LTSE-2022-02. 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 LTSE and on its internet website
at https://longtermstockexchange.com/.
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-LTSE-2022-02 and should be
submitted on or before April 20, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-06637 Filed 3-29-22; 8:45 am]
BILLING CODE 8011-01-P
