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]

Download as PDF Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices khammond on DSKJM1Z7X2PROD with NOTICES 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 VerDate Sep<11>2014 17:14 Mar 29, 2022 Jkt 256001 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 (http://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 PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 18419 comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (http://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 E:\FR\FM\30MRN1.SGM 30MRN1 18420 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. khammond on DSKJM1Z7X2PROD with NOTICES 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. VerDate Sep<11>2014 17:14 Mar 29, 2022 Jkt 256001 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 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 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. E:\FR\FM\30MRN1.SGM 30MRN1 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. khammond on DSKJM1Z7X2PROD with NOTICES (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). VerDate Sep<11>2014 17:14 Mar 29, 2022 Jkt 256001 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 PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 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 E:\FR\FM\30MRN1.SGM 30MRN1 18422 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 (http://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 (http://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). VerDate Sep<11>2014 17:14 Mar 29, 2022 Jkt 256001 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 (http://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 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 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]


-----------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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'').
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \4\ Id.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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:
---------------------------------------------------------------------------

    \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).'').
---------------------------------------------------------------------------

     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\
---------------------------------------------------------------------------

    \8\ See FINRA Rule 1240(c)(1).
---------------------------------------------------------------------------

     individuals could elect to participate when they terminate 
a registration or within two years from the termination of a 
registration; \9\
---------------------------------------------------------------------------

    \9\ See FINRA Rule 1240(c)(2).
---------------------------------------------------------------------------

     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\
---------------------------------------------------------------------------

    \10\ See FINRA Rule 1240(c).
---------------------------------------------------------------------------

     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
---------------------------------------------------------------------------

    \11\ See FINRA Rules 1240(c)(4) and (c)(5).
---------------------------------------------------------------------------

     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\
---------------------------------------------------------------------------

    \12\ See FINRA Rules 1240(c)(1) and (c)(6).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \13\ See Supplementary Material .09 to FINRA Rule 1210.
    \14\ See Supplementary Material .01 to FINRA Rule 1240.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \15\ See Supplementary Material .02 to FINRA Rule 1240.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f.
    \17\ 15 U.S.C. 78f(b)(6).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78s(b)(3).
    \24\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \25\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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 (http://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 (http://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\
---------------------------------------------------------------------------

    \27\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-06637 Filed 3-29-22; 8:45 am]
BILLING CODE 8011-01-P