Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change for Amendments to the Exchange's Rules Regarding Continuing Education Requirements, 41161-41164 [2023-13347]

Download as PDF Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Notices functions,’’ 304 ‘‘to avoid any disincentives such as placing an inappropriate burden on competition and a reduction in market quality,’’ 305 and ‘‘to build financial stability to support the Company as a going concern.’’ 306 Under the Commission’s Rules of Practice, the ‘‘burden to demonstrate that a NMS plan filing is consistent with the Exchange Act and the rules and regulations issued thereunder. . . is on the plan participants that filed the NMS plan filing.’’ 307 The description of the NMS plan filing, its purpose and operation, its effect, and a legal analysis of its consistency with applicable requirements must all be sufficiently detailed and specific to support an affirmative Commission finding.308 Any failure of the plan participants that filed the NMS plan filing to provide such detail and specificity may result in the Commission not having a sufficient basis to make an affirmative finding that the NMS plan filing is consistent with the Exchange Act and the applicable rules and regulations thereunder.309 VI. Commission’s Solicitation of Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the Proposed Amendment. In particular, the Commission invites the written views of interested persons concerning whether the Proposed Amendment is consistent with Section 11A, Section 6(b)(4), Section 6(b)(5), Section 6(b)(8), Section 15A(b)(5), Section 15A(b)(6), Section 15A(b)(9), or any other provision of the Exchange Act, or the rules and regulations thereunder, or the funding principles of the CAT NMS Plan. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 608(b)(2)(i) of Regulation NMS,310 any request for an opportunity to make an oral presentation.311 The Commission asks 304 Id. at Section 11.2(d). at Section 11.2(e). 306 Id. at Section 11.2(f). 307 17 CFR 201.701(b)(3)(ii). 308 Id. 309 Id. 310 17 CFR 242.608(b)(2)(i). 311 Rule 700(c)(ii) of the Commission’s Rules of Practice provides that ‘‘[t]he Commission, in its sole discretion, may determine whether any issues relevant to approval or disapproval would be facilitated by the opportunity for an oral presentation of views.’’ 17 CFR 201.700(c)(ii). lotter on DSK11XQN23PROD with NOTICES1 305 Id. VerDate Sep<11>2014 18:01 Jun 22, 2023 Jkt 259001 that commenters address the sufficiency and merit of the Participants’ statements in support of the Proposed Amendment,312 in addition to any other comments they may wish to submit about the proposed rule changes. In addition, the Commission seeks comment on the following: 1. Commenters’ views on any questions in the Solicitation of Comments Section of the Order Instituting Proceedings related to a prior funding model amendment that are relevant to the Proposed Amendment; 313 2. Commenters’ views on whether the proposed definition of ‘‘CAT Executing Broker’’ is clear and whether identification of those brokers who meet the definition is easily available through CAT Data; and 3. Commenters’ views on the incentives of the Participants to control Prospective CAT Costs. The Commission also requests that commenters provide analysis to support their views, if possible. Interested persons are invited to submit written data, views, and arguments regarding whether the Proposed Amendment should be approved or disapproved by July 14, 2023. Any person who wishes to file a rebuttal to any other person’s submission must file that rebuttal by July 28, 2023. Comments may be submitted by any of the following methods: 41161 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 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number 4–698 and should be submitted on or before July 14, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.314 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2023–13340 Filed 6–22–23; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION 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 4– 698 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 4–698. 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 [Release No. 34–97745; File No. SR– NYSENAT–2023–11] Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change for Amendments to the Exchange’s Rules Regarding Continuing Education Requirements June 16, 2023. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on June 5, 2023, NYSE National, Inc. (‘‘NYSE National’’ 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 312 See 314 17 313 See 1 15 Notice, supra note 6. Securities Exchange Act Release No. 95634 (Aug. 30, 2022), 87 FR 54558, 54577–79 (Sept. 6, 2022). PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 CFR 200.30–3(a)(85). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. E:\FR\FM\23JNN1.SGM 23JNN1 41162 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Notices comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Commentary .09 under NYSE National Rule 2.2 (Eligibility of Other Persons to Participate in the Continuing Education Program Specified in Rule 2.2(e)(3)) applicable to ETP Holders to provide eligible individuals another opportunity to elect to participate in the Maintaining Qualifications Program (‘‘MQP’’). The proposed rule change is available on the Exchange’s website at www.nyse.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 those 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 parts of such statements. lotter on DSK11XQN23PROD with NOTICES1 A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The continuing education program for registered persons of broker-dealers (‘‘CE Program’’) currently requires registered persons to complete continuing education consisting of a Regulatory Element and a Firm Element. The Regulatory Element, which is administered by FINRA on behalf of the Exchange, focuses on regulatory requirements and industry standards, while the Firm Element is provided by each firm and focuses on securities products, services and strategies the firm offers, firm policies and industry trends. The CE Program is codified under the rules of the self-regulatory organizations. The CE Program for registered persons of NYSE National members is codified under Rule 2.2(e).4 This proposed rule change is based on a filing recently submitted by the 4 See also Commentary .06 to Rule 2.1210 (All Registered Persons Must Satisfy the Regulatory Element of Continuing Education). VerDate Sep<11>2014 18:01 Jun 22, 2023 Jkt 259001 Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), and is intended to harmonize the Exchange’s continuing education rules with those of FINRA so as to promote uniform standards across the securities industry.5 The proposed rule change is discussed in detail below. On May 25, 2022, the Exchange amended NYSE National Rules 2.1210 (Registration Requirements) and 2.2(e) (Continuing Education Requirements) to, among other things, provide eligible individuals who terminate any of their representative or principal registration categories the option of maintaining their qualification for any terminated registration categories by completing annual continuing education through a new program, the MQP.6 By that time, however, the First Enrollment Period, defined below, had expired leaving many eligible individuals from being able to participate in the MQP. This proposed rule change will provide those eligible individuals a second opportunity to elect to participate in the MQP to maintain their qualification. Prior to the MQP, individuals whose registrations as representatives or principals had been terminated for two or more years could reregister as representatives or principals only if they requalified by retaking and passing the applicable representative- or principallevel examination or if they obtained a waiver of such examination(s) (the ‘‘two-year qualification period’’). The MQP provides these individuals an alternative means of staying current on their regulatory and securities knowledge following the termination of a registration.7 Specifically, the MQP provides eligible individuals a maximum of five years following the termination of a representative or principal registration category to reregister without having to requalify by examination or having to obtain an examination waiver, subject to 5 See Securities Exchange Act Release No. 97184 (March 22, 2023), 88 FR 18359 (March 28, 2023) (SR–FINRA–2023–005) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rule 1240.01 To Provide Eligible Individuals Another Opportunity To Elect To Participate in the Maintaining Qualifications Program) (‘‘FINRA Rule Change’’). 6 See Securities Exchange Act Release No. 95062 (June 7, 2022), 87 FR 35836 (June 13, 2022) (SR– NYSENAT–2022–07) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change of Amendments to the Exchange’s Rules Regarding Continuing Education Requirements). 7 The MQP does not eliminate the two-year qualification period. Thus, eligible individuals who elect not to participate in the MQP can continue to avail themselves of the two-year qualification period (i.e., they can reregister within two years of terminating a registration category without having to requalify by examination or having to obtain an examination waiver). PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 satisfying the conditions and limitations of the MQP, including the annual completion of all prescribed continuing education. Under NYSE National Rule 2.2, Commentary .09, the MQP has a lookback provision that, subject to specified conditions, extended the option to participate in the MQP to individuals who: (1) were registered as a representative or principal within two years immediately prior to May 25, 2022 (the implementation date of the MQP); and (2) individuals who were participating in the Financial Services Affiliate Waiver Program (‘‘FSAWP’’) under NYSE National Rule 2.1210, Commentary .08 (Waiver of Examinations for Individuals Working for a Financial Services Industry Affiliate of an ETP Holder) immediately prior to May 25, 2022 (collectively, ‘‘Look-Back Individuals’’).8 In the FINRA Rule Change, FINRA noted that in Regulatory Notice 21–41 (November 17, 2021), it announced that Look-Back Individuals who wanted to take part in the MQP were required to make their election between January 31, 2022, and March 15, 2022 (the ‘‘First Enrollment Period’’). In addition to the announcement in Regulatory Notice 21– 41, FINRA notified the Look-Back Individuals about the MQP and the First Enrollment Period via two separate mailings of postcards to their home addresses and communications through their FINRA Financial Professional Gateway (‘‘FinPro’’) accounts.9 In the FINRA Rule Change, FINRA further noted that shortly after the First Enrollment Period had ended, a number of Look-Back Individuals contacted FINRA and indicated that they had only recently become aware of the MQP. FINRA noted that it also received anecdotal information that a number of these individuals may not have learned of the MQP, or the First Enrollment Period, in a timely manner, or at all, due to communication and operational issues.10 In addition, the original six8 The FSAWP is a waiver program for eligible individuals who have left a member firm to work for a foreign or domestic financial services affiliate of a member firm. NYSE National stopped accepting new participants for the FSAWP beginning on May 25, 2022; however, individuals who were already participating in the FSAWP prior to that date had the option of continuing in the FSAWP. 9 Look-Back Individuals were able to notify FINRA of their election to participate in the MQP through their FinPro accounts. 10 According to FINRA, this may have been a result of the timing of FINRA’s announcements relating to the MQP, which coincided with the holiday season and the transition to the New Year. Further, given that Look-Back Individuals were out of the industry at the time of these announcements, it was unlikely that they would have learned of the MQP, or the First Enrollment Period, through informal communication channels. E:\FR\FM\23JNN1.SGM 23JNN1 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES1 week enrollment period may not have provided Look-Back Individuals with sufficient time to evaluate whether they should participate in the MQP. For these reasons, FINRA recently amended its rules to provide Look-Back Individuals a second opportunity to elect to participate in the MQP (the ‘‘Second Enrollment Period’’). For similar reasons, NYSE National is also proposing to amend its rules to provide Look-Back Individuals with a Second Enrollment Period.11 The Second Enrollment Period will be between the date of filing of this proposed rule change, and December 31, 2023. In addition, the proposed rule change requires that Look-Back Individuals who elect to participate in the MQP during the Second Enrollment Period complete any prescribed 2022 and 2023 MQP content by March 31, 2024.12 NYSE National believes that LookBack Individuals generally have greater awareness of the MQP, including due to news coverage, since the program’s launch.13 NYSE National believes that greater public awareness of the MQP, coupled with a seven-month enrollment period, should help ensure that all Look-Back Individuals are aware of the MQP and the availability of the Second Enrollment Period and should provide them with ample time to decide whether to participate in the MQP. Look-Back Individuals who elect to enroll during the Second Enrollment Period would need to notify FINRA of their election to participate in the MQP through a manner to be determined by FINRA.14 NYSE National also notes that 11 The current rule text also provides that if LookBack Individuals elect to participate in the MQP, their five-year participation period will be adjusted by deducting from that period the amount of time that has lapsed between the date that they terminated their registrations and May 25, 2022. To reflect the availability of the Second Enrollment Period, the proposed rule change clarifies that for all Look-Back Individuals who elect to participate in the MQP, their participation period would also be for a period of five years following the termination of their registration categories, as with other MQP participants. 12 Look-Back Individuals who elect to enroll in the MQP during the Second Enrollment Period would also need to pay the annual program fee of $100 for both 2022 and 2023 at the time of their enrollment. 13 See, e.g., Joanne Cleaver, FINRA Sets Big Change in Motion with New Option for Licensing Grace Period, InvestmentNews (June 23, 2022), https://www.investmentnews.com/finra-sets-bigchange-in-motion-with-new-option-for-licensinggrace-period-222942. 14 In the FINRA Rule Change, FINRA noted that it anticipates that Look-Back Individuals will make their selection to enroll in the MQP during the Second Enrollment Period through their FinPro accounts. See Enrolling in the MQP, https:// www.finra.org/registration-exams-ce/finpro/mqp (describing the MQP enrollment process). FINRA further noted that it will inform Look-Back VerDate Sep<11>2014 18:01 Jun 22, 2023 Jkt 259001 Look-Back Individuals who elect to participate in the MQP during the Second Enrollment Period would continue to be subject to all of the other MQP eligibility and participation conditions. For example, as clarified in the proposed rule change, Look-Back Individuals electing to participate during the Second Enrollment Period would have only a maximum of five years following the termination of a registration category in which to reregister without having to requalify by examination or having to obtain an examination waiver.15 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ‘‘Act’’),16 in general, and furthers the objectives of Section 6(b)(5),17 in particular, because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in 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. NYSE National believes that providing Look-Back Individuals a second opportunity to elect to participate in the MQP is warranted because participation in the MQP would reduce unnecessary impediments to requalification for these individuals without diminishing investor protection. In addition, the proposed rule change is consistent with other goals, such as the promotion of diversity and inclusion in the securities industry by attracting and retaining a broader and diverse group of professionals. The MQP also allows the industry to retain expertise from skilled individuals, providing investors with the advantage of greater experience among the individuals working in the industry. NYSE National believes that providing Look-Back Individuals a second opportunity to elect to participate in the Individuals if it determines to provide an alternative enrollment method. 15 For example, if a Look-Back Individual terminated a registration category on May 1, 2020, and elects to participate in the MQP on December 1, 2023, the individual’s maximum participation period would be five years starting on May 1, 2020, and ending no later than May 1, 2025. If the individual does not reregister with a member firm by May 1, 2025, the individual would need to requalify by examination or obtain an examination waiver in order to reregister after that date. 16 15 U.S.C. 78f(b). 17 15 U.S.C. 78f(b)(5). PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 41163 MQP will further these goals and objectives. 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 the recent rule change adopted by FINRA, will reduce the regulatory burden placed on market participants engaged in trading activities across different markets. The Exchange believes that the harmonization of the CE program requirements across the various markets will reduce burdens on competition by removing impediments to participation in the national market system and promoting competition among participants across the multiple national securities exchanges. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action NYSE National has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 18 and Rule 19b–4(f)(6) thereunder.19 Because the 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 prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 20 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),21 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 18 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 20 17 CFR 240.19b–4(f)(6). 21 17 CFR 240.19b–4(f)(6)(iii). 19 17 E:\FR\FM\23JNN1.SGM 23JNN1 41164 Federal Register / Vol. 88, No. 120 / Friday, June 23, 2023 / Notices lotter on DSK11XQN23PROD with NOTICES1 Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. NYSE National has indicated that the immediate operation of the proposed rule change is appropriate because it would allow the Exchange to implement the proposed changes to its continuing education rules without delay, thereby eliminating the possibility of a significant regulatory gap between the FINRA rules and the Exchange rules, providing more uniform standards across the securities industry, and helping to avoid confusion for Exchange members that are also FINRA members. NYSE National also noted that FINRA plans to conduct additional public outreach efforts to promote awareness of the MQP and the availability of the Second Enrollment Period among Look-Back Individuals. Therefore, NYSE National additionally indicated that the immediate operation of the proposed rule change is appropriate because it would ensure that there is sufficient time for LookBack Individuals to consider whether they wish to participate in the program before the December 31, 2023 deadline. 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 designates the proposal operative upon filing.22 At any time within 60 days of the filing of such 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 under Section 19(b)(2)(B) 23 of the Act to determine whether the proposed rule change 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: 22 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). 23 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 18:01 Jun 22, 2023 Jkt 259001 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– NYSENAT–2023–11 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–NYSENAT–2023–11. 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 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to File Number SR–NYSENAT–2023–11 and should be submitted on or before July 14, 2023. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.24 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2023–13347 Filed 6–22–23; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–97748; File No. SR– NYSEAMER–2023–32] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend the Partial Cabinet Solution Bundles Offered as Part of Its Co-Location Services June 16, 2023. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on June 5, 2023, NYSE American LLC (‘‘NYSE American’’ 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 proposes to amend the Partial Cabinet Solution bundles offered as part of its co-location services. The description of the Partial Cabinet Solution bundles in the Connectivity Fee Schedule (‘‘Fee Schedule’’) would be updated accordingly. The proposed rule change is available on the Exchange’s website at www.nyse.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 those 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 parts of such statements. BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 24 17 PO 00000 CFR 200.30–3(a)(12). Frm 00098 Fmt 4703 Sfmt 4703 E:\FR\FM\23JNN1.SGM 23JNN1

Agencies

[Federal Register Volume 88, Number 120 (Friday, June 23, 2023)]
[Notices]
[Pages 41161-41164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13347]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97745; File No. SR-NYSENAT-2023-11]


Self-Regulatory Organizations; NYSE National, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change for 
Amendments to the Exchange's Rules Regarding Continuing Education 
Requirements

June 16, 2023.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on June 5, 2023, NYSE National, Inc. (``NYSE National'' 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

[[Page 41162]]

comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Commentary .09 under NYSE National 
Rule 2.2 (Eligibility of Other Persons to Participate in the Continuing 
Education Program Specified in Rule 2.2(e)(3)) applicable to ETP 
Holders to provide eligible individuals another opportunity to elect to 
participate in the Maintaining Qualifications Program (``MQP''). The 
proposed rule change is available on the Exchange's website at 
www.nyse.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 those 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 parts of such statements.

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

1. Purpose
    The continuing education program for registered persons of broker-
dealers (``CE Program'') currently requires registered persons to 
complete continuing education consisting of a Regulatory Element and a 
Firm Element. The Regulatory Element, which is administered by FINRA on 
behalf of the Exchange, focuses on regulatory requirements and industry 
standards, while the Firm Element is provided by each firm and focuses 
on securities products, services and strategies the firm offers, firm 
policies and industry trends.
    The CE Program is codified under the rules of the self-regulatory 
organizations. The CE Program for registered persons of NYSE National 
members is codified under Rule 2.2(e).\4\ This proposed rule change is 
based on a filing recently submitted by the Financial Industry 
Regulatory Authority, Inc. (``FINRA''), and is intended to harmonize 
the Exchange's continuing education rules with those of FINRA so as to 
promote uniform standards across the securities industry.\5\ The 
proposed rule change is discussed in detail below.
---------------------------------------------------------------------------

    \4\ See also Commentary .06 to Rule 2.1210 (All Registered 
Persons Must Satisfy the Regulatory Element of Continuing 
Education).
    \5\ See Securities Exchange Act Release No. 97184 (March 22, 
2023), 88 FR 18359 (March 28, 2023) (SR-FINRA-2023-005) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend FINRA Rule 1240.01 To Provide Eligible Individuals Another 
Opportunity To Elect To Participate in the Maintaining 
Qualifications Program) (``FINRA Rule Change'').
---------------------------------------------------------------------------

    On May 25, 2022, the Exchange amended NYSE National Rules 2.1210 
(Registration Requirements) and 2.2(e) (Continuing Education 
Requirements) to, among other things, provide eligible individuals who 
terminate any of their representative or principal registration 
categories the option of maintaining their qualification for any 
terminated registration categories by completing annual continuing 
education through a new program, the MQP.\6\ By that time, however, the 
First Enrollment Period, defined below, had expired leaving many 
eligible individuals from being able to participate in the MQP. This 
proposed rule change will provide those eligible individuals a second 
opportunity to elect to participate in the MQP to maintain their 
qualification.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 95062 (June 7, 
2022), 87 FR 35836 (June 13, 2022) (SR-NYSENAT-2022-07) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change of 
Amendments to the Exchange's Rules Regarding Continuing Education 
Requirements).
---------------------------------------------------------------------------

    Prior to the MQP, individuals whose registrations as 
representatives or principals had been terminated for two or more years 
could reregister as representatives or principals only if they 
requalified by retaking and passing the applicable representative- or 
principal-level examination or if they obtained a waiver of such 
examination(s) (the ``two-year qualification period''). The MQP 
provides these individuals an alternative means of staying current on 
their regulatory and securities knowledge following the termination of 
a registration.\7\ Specifically, the MQP provides eligible individuals 
a maximum of five years following the termination of a representative 
or principal registration category to reregister without having to 
requalify by examination or having to obtain an examination waiver, 
subject to satisfying the conditions and limitations of the MQP, 
including the annual completion of all prescribed continuing education.
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    \7\ The MQP does not eliminate the two-year qualification 
period. Thus, eligible individuals who elect not to participate in 
the MQP can continue to avail themselves of the two-year 
qualification period (i.e., they can reregister within two years of 
terminating a registration category without having to requalify by 
examination or having to obtain an examination waiver).
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    Under NYSE National Rule 2.2, Commentary .09, the MQP has a look-
back provision that, subject to specified conditions, extended the 
option to participate in the MQP to individuals who: (1) were 
registered as a representative or principal within two years 
immediately prior to May 25, 2022 (the implementation date of the MQP); 
and (2) individuals who were participating in the Financial Services 
Affiliate Waiver Program (``FSAWP'') under NYSE National Rule 2.1210, 
Commentary .08 (Waiver of Examinations for Individuals Working for a 
Financial Services Industry Affiliate of an ETP Holder) immediately 
prior to May 25, 2022 (collectively, ``Look-Back Individuals'').\8\
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    \8\ The FSAWP is a waiver program for eligible individuals who 
have left a member firm to work for a foreign or domestic financial 
services affiliate of a member firm. NYSE National stopped accepting 
new participants for the FSAWP beginning on May 25, 2022; however, 
individuals who were already participating in the FSAWP prior to 
that date had the option of continuing in the FSAWP.
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    In the FINRA Rule Change, FINRA noted that in Regulatory Notice 21-
41 (November 17, 2021), it announced that Look-Back Individuals who 
wanted to take part in the MQP were required to make their election 
between January 31, 2022, and March 15, 2022 (the ``First Enrollment 
Period''). In addition to the announcement in Regulatory Notice 21-41, 
FINRA notified the Look-Back Individuals about the MQP and the First 
Enrollment Period via two separate mailings of postcards to their home 
addresses and communications through their FINRA Financial Professional 
Gateway (``FinPro'') accounts.\9\
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    \9\ Look-Back Individuals were able to notify FINRA of their 
election to participate in the MQP through their FinPro accounts.
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    In the FINRA Rule Change, FINRA further noted that shortly after 
the First Enrollment Period had ended, a number of Look-Back 
Individuals contacted FINRA and indicated that they had only recently 
become aware of the MQP. FINRA noted that it also received anecdotal 
information that a number of these individuals may not have learned of 
the MQP, or the First Enrollment Period, in a timely manner, or at all, 
due to communication and operational issues.\10\ In addition, the 
original six-

[[Page 41163]]

week enrollment period may not have provided Look-Back Individuals with 
sufficient time to evaluate whether they should participate in the MQP. 
For these reasons, FINRA recently amended its rules to provide Look-
Back Individuals a second opportunity to elect to participate in the 
MQP (the ``Second Enrollment Period''). For similar reasons, NYSE 
National is also proposing to amend its rules to provide Look-Back 
Individuals with a Second Enrollment Period.\11\ The Second Enrollment 
Period will be between the date of filing of this proposed rule change, 
and December 31, 2023. In addition, the proposed rule change requires 
that Look-Back Individuals who elect to participate in the MQP during 
the Second Enrollment Period complete any prescribed 2022 and 2023 MQP 
content by March 31, 2024.\12\
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    \10\ According to FINRA, this may have been a result of the 
timing of FINRA's announcements relating to the MQP, which coincided 
with the holiday season and the transition to the New Year. Further, 
given that Look-Back Individuals were out of the industry at the 
time of these announcements, it was unlikely that they would have 
learned of the MQP, or the First Enrollment Period, through informal 
communication channels.
    \11\ The current rule text also provides that if Look-Back 
Individuals elect to participate in the MQP, their five-year 
participation period will be adjusted by deducting from that period 
the amount of time that has lapsed between the date that they 
terminated their registrations and May 25, 2022. To reflect the 
availability of the Second Enrollment Period, the proposed rule 
change clarifies that for all Look-Back Individuals who elect to 
participate in the MQP, their participation period would also be for 
a period of five years following the termination of their 
registration categories, as with other MQP participants.
    \12\ Look-Back Individuals who elect to enroll in the MQP during 
the Second Enrollment Period would also need to pay the annual 
program fee of $100 for both 2022 and 2023 at the time of their 
enrollment.
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    NYSE National believes that Look-Back Individuals generally have 
greater awareness of the MQP, including due to news coverage, since the 
program's launch.\13\ NYSE National believes that greater public 
awareness of the MQP, coupled with a seven-month enrollment period, 
should help ensure that all Look-Back Individuals are aware of the MQP 
and the availability of the Second Enrollment Period and should provide 
them with ample time to decide whether to participate in the MQP.
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    \13\ See, e.g., Joanne Cleaver, FINRA Sets Big Change in Motion 
with New Option for Licensing Grace Period, InvestmentNews (June 23, 
2022), https://www.investmentnews.com/finra-sets-big-change-in-motion-with-new-option-for-licensing-grace-period-222942.
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    Look-Back Individuals who elect to enroll during the Second 
Enrollment Period would need to notify FINRA of their election to 
participate in the MQP through a manner to be determined by FINRA.\14\ 
NYSE National also notes that Look-Back Individuals who elect to 
participate in the MQP during the Second Enrollment Period would 
continue to be subject to all of the other MQP eligibility and 
participation conditions. For example, as clarified in the proposed 
rule change, Look-Back Individuals electing to participate during the 
Second Enrollment Period would have only a maximum of five years 
following the termination of a registration category in which to 
reregister without having to requalify by examination or having to 
obtain an examination waiver.\15\
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    \14\ In the FINRA Rule Change, FINRA noted that it anticipates 
that Look-Back Individuals will make their selection to enroll in 
the MQP during the Second Enrollment Period through their FinPro 
accounts. See Enrolling in the MQP, https://www.finra.org/registration-exams-ce/finpro/mqp (describing the MQP enrollment 
process). FINRA further noted that it will inform Look-Back 
Individuals if it determines to provide an alternative enrollment 
method.
    \15\ For example, if a Look-Back Individual terminated a 
registration category on May 1, 2020, and elects to participate in 
the MQP on December 1, 2023, the individual's maximum participation 
period would be five years starting on May 1, 2020, and ending no 
later than May 1, 2025. If the individual does not reregister with a 
member firm by May 1, 2025, the individual would need to requalify 
by examination or obtain an examination waiver in order to 
reregister after that date.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\16\ in general, and 
furthers the objectives of Section 6(b)(5),\17\ in particular, because 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in 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(b).
    \17\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    NYSE National believes that providing Look-Back Individuals a 
second opportunity to elect to participate in the MQP is warranted 
because participation in the MQP would reduce unnecessary impediments 
to requalification for these individuals without diminishing investor 
protection. In addition, the proposed rule change is consistent with 
other goals, such as the promotion of diversity and inclusion in the 
securities industry by attracting and retaining a broader and diverse 
group of professionals. The MQP also allows the industry to retain 
expertise from skilled individuals, providing investors with the 
advantage of greater experience among the individuals working in the 
industry. NYSE National believes that providing Look-Back Individuals a 
second opportunity to elect to participate in the MQP will further 
these goals and objectives.

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 the recent 
rule change adopted by FINRA, will reduce the regulatory burden placed 
on market participants engaged in trading activities across different 
markets. The Exchange believes that the harmonization of the CE program 
requirements across the various markets will reduce burdens on 
competition by removing impediments to participation in the national 
market system and promoting competition among participants across the 
multiple national securities exchanges.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    NYSE National has filed the proposed rule change pursuant to 
Section 19(b)(3)(A)(iii) of the Act \18\ and Rule 19b-4(f)(6) 
thereunder.\19\ Because the 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 prior to 30 days from the date on which it was filed, 
or such shorter time as the Commission may designate, if consistent 
with the protection of investors and the public interest, the proposed 
rule change has become effective pursuant to Section 19(b)(3)(A) of the 
Act and Rule 19b-4(f)(6)(iii) thereunder.
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    \18\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \19\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \20\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\21\ 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

[[Page 41164]]

Commission to waive the 30-day operative delay so that the proposal may 
become operative immediately upon filing. NYSE National has indicated 
that the immediate operation of the proposed rule change is appropriate 
because it would allow the Exchange to implement the proposed changes 
to its continuing education rules without delay, thereby eliminating 
the possibility of a significant regulatory gap between the FINRA rules 
and the Exchange rules, providing more uniform standards across the 
securities industry, and helping to avoid confusion for Exchange 
members that are also FINRA members. NYSE National also noted that 
FINRA plans to conduct additional public outreach efforts to promote 
awareness of the MQP and the availability of the Second Enrollment 
Period among Look-Back Individuals. Therefore, NYSE National 
additionally indicated that the immediate operation of the proposed 
rule change is appropriate because it would ensure that there is 
sufficient time for Look-Back Individuals to consider whether they wish 
to participate in the program before the December 31, 2023 deadline. 
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 designates the proposal operative 
upon filing.\22\
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    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ 17 CFR 240.19b-4(f)(6)(iii).
    \22\ 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 such 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 under 
Section 19(b)(2)(B) \23\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \23\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-NYSENAT-2023-11 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-NYSENAT-2023-11. 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 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to File Number SR-NYSENAT-2023-11 and should 
be submitted on or before July 14, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-13347 Filed 6-22-23; 8:45 am]
BILLING CODE 8011-01-P
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