Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rule 1240.01 To Reopen the Period by Which Certain Participants in the Maintaining Qualifications Program May Complete Their Prescribed Continuing Education Content, 40520-40522 [2024-10196]
Download as PDF
<![CDATA[
40520
Federal Register / Vol. 89, No. 92 / Friday, May 10, 2024 / Notices
confidential. Estimates of average
burden hours are made solely for the
purposes of the Paperwork Reduction
Act, and are not derived from a
comprehensive or even a representative
survey or study of the costs of
Commission rules and forms. An agency
may not conduct or sponsor, and a
person is not required to respond to a
collection of information unless it
displays a currently valid control
number.
Written comments are invited on: (a)
whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimate of the burden of the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
by July 9, 2024.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
Please direct your written comments
to: David Bottom, Chief Information
Officer, Securities and Exchange
Commission, c/o John Pezzullo, 100 F
Street NE, Washington, DC 20549 or
send an email to: PRA_Mailbox@
sec.gov.
Dated: May 7, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–10252 Filed 5–9–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
khammond on DSKJM1Z7X2PROD with NOTICES
[Release No. 34–100067; File No. SR–
FINRA–2024–006]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend FINRA Rule
1240.01 To Reopen the Period by
Which Certain Participants in the
Maintaining Qualifications Program
May Complete Their Prescribed
Continuing Education Content
May 6, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
VerDate Sep<11>2014
19:15 May 09, 2024
Jkt 262001
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 30,
2024, the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
II below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
19b–4 under the Act,3 which renders
the proposal effective upon receipt of
this filing by the Commission. 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
FINRA is proposing to amend FINRA
Rule 1240.01 (Eligibility of Other
Persons to Participate in the Continuing
Education Program Specified in
Paragraph (c) of this Rule) to reopen the
period by which certain participants in
the Maintaining Qualifications Program
(‘‘MQP’’) will be able to complete their
prescribed 2022 and 2023 continuing
education (‘‘CE’’) content.
Below is the text of the proposed rule
change. Proposed new language is
italicized; proposed deletions are in
brackets.
*
*
*
*
*
1200. REGISTRATION AND
QUALIFICATION
*
*
*
*
*
*
1240. Continuing Education
This Rule prescribes requirements
regarding the continuing education of
registered persons. The requirements shall
consist of a Regulatory Element and a Firm
Element as set forth below. This Rule also
sets forth continuing education programs
through which specified persons may
maintain their qualification in a
representative or principal registration
category following the termination of that
registration category.
(a) through (c) No Change.
• • • Supplementary Material:———
.01 Eligibility of Other Persons to
Participate in the Continuing Education
Program Specified in Paragraph (c) of this
Rule. A person registered in a representative
or principal registration category with FINRA
within two years immediately preceding
March 15, 2022 shall be eligible to participate
in the continuing education program under
paragraph (c) of this Rule, provided that he
or she satisfies the conditions set forth in
paragraphs (c)(1) and (c)(3) through (c)(6) of
this Rule. In addition, a person participating
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
2 17
PO 00000
Frm 00064
Fmt 4703
Sfmt 4703
in the Financial Services Affiliate Waiver
Program under Rule 1210.09 immediately
preceding March 15, 2022 shall be eligible to
participate in the continuing education
program under paragraph (c) of this Rule,
provided that he or she satisfies the
conditions set forth in paragraphs (c)(3),
(c)(5) and (c)(6) of this Rule. Persons eligible
under this Supplementary Material .01 shall
make their election to participate in the
continuing education program under
paragraph (c) of this Rule either (1) between
January 31, 2022, and March 15, 2022; or (2)
between March 15, 2023, and December 31,
2023. If such persons elect to participate in
the continuing education program, their
participation period shall also be for a period
of five years following the termination of
their registration categories, as with other
participants under paragraph (c) of this Rule.
[In addition, eligible persons who elect to
participate in the continuing education
program between March 15, 2023, and
December 31, 2023, must complete any
prescribed 2022 and 2023 continuing
education content by March 31, 2024.]
Individuals enrolled in the continuing
education program under this
Supplementary Material .01 in both 2022 and
2023 who did not complete their prescribed
2022 and 2023 continuing education content
as of March 31, 2024, shall be able to
complete such content between May 22,
2024, and July 1, 2024, to be eligible to
continue their participation in the continuing
education program. In addition, any such
individuals who will have completed their
prescribed 2022 and 2023 continuing
education content between March 31, 2024,
and May 22, 2024, shall be deemed to have
completed such content by July 1, 2024, for
purposes of this Supplementary Material .01.
.02 No Change.
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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. FINRA 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
FINRA Rule 1240.01 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 March 15,
2022 (the implementation date of the
E:\FR\FM\10MYN1.SGM
10MYN1
Federal Register / Vol. 89, No. 92 / Friday, May 10, 2024 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
MQP); and (2) individuals who were
participating in the Financial Services
Affiliate Waiver Program (‘‘FSAWP’’)
under FINRA Rule 1210.09 (Waiver of
Examinations for Individuals Working
for a Financial Services Industry
Affiliate of a Member) immediately
prior to March 15, 2022 (collectively,
‘‘Look-Back Individuals’’).4 The rule
provided two open enrollment periods
for Look-Back Individuals to participate
in the MQP.5 FINRA provided all LookBack Individuals who had enrolled in
the MQP until March 31, 2024, to
complete any prescribed 2022 and 2023
CE content.6 Look-Back Individuals who
are enrolled in the MQP, similar to other
MQP participants, are able to complete
any prescribed CE and renew their
annual MQP participation through their
FINRA Financial Professional Gateway
(‘‘FinPro’’) accounts.
On March 16, 2024, FINRA sent an
email to Look-Back Individuals who had
enrolled in the MQP but had not
completed their prescribed CE to
remind them of the March 31, 2024,
deadline.7 In the week leading up to the
deadline, however, FINRA noticed that
several thousand of those individuals
were renewing their participation in the
MQP for 2024 instead of completing
their prescribed CE.8 FINRA believes
that some of those individuals may have
been confused by the layout of their
FinPro accounts. Specifically, if they
4 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. FINRA stopped accepting new
participants for the FSAWP beginning on March 15,
2022; however, individuals who were already
participating in the FSAWP prior to that date had
the option of continuing in the FSAWP.
5 In March 2023, FINRA amended Rule 1240.01
to provide Look-Back Individuals with a second
opportunity to participate in the MQP. See
Securities Exchange Act Release No. 97184 (March
22, 2023), 88 FR 18359 (March 28, 2023) (Notice of
Filing and Immediate Effectiveness of File No. SR–
FINRA–2023–005).
6 FINRA determined to treat the individuals who
enrolled during the first period (between January
31, 2022, and March 15, 2022) the same as those
who enrolled during the second period (between
March 15, 2023, and December 31, 2023) for
purposes of the March 31, 2024, deadline for
completion of prescribed 2022 and 2023 CE
content. This is because those who had enrolled in
the MQP during the first period satisfied all of the
eligibility criteria for enrollment during the second
period and would have been able to complete their
prescribed CE content by March 31, 2024, had they
chosen to enroll during the second period instead
of enrolling during the first period.
7 FINRA had sent multiple reminders prior to
March 16, 2024, but the March 16, 2024, email was
the last reminder that was sent prior to the March
31, 2024, deadline for completion of any prescribed
2022 and 2023 CE content.
8 Look-Back Individuals who enrolled in the MQP
have until December 31, 2024, to renew their
participation in the MQP for 2024, provided that
they complete their prescribed CE by the stated
deadline.
VerDate Sep<11>2014
19:15 May 09, 2024
Jkt 262001
selected the 2024 renewal banner,
which was prominently displayed on
their FinPro accounts, and completed
the renewal process, they would not
have been automatically redirected to
complete any prescribed CE. Therefore,
individuals may have inadvertently
assumed that completion of the renewal
process alone would have satisfied all of
the necessary requirements to continue
their participation in the MQP.9
For these reasons, FINRA is proposing
to amend Rule 1240.01 to provide LookBack Individuals enrolled in the MQP in
both 2022 and 2023 who did not
complete their prescribed 2022 and
2023 CE content as of March 31, 2024,
the opportunity to complete such
content between May 22, 2024, and July
1, 2024, to be eligible to continue their
participation in the MQP.10 FINRA is
also proposing to amend the rule to
provide that any such individuals who
will have completed their prescribed
2022 and 2023 CE content between
March 31, 2024, and May 22, 2024, will
be deemed to have completed such
content by July 1, 2024, for purposes of
the rule. FINRA plans to reach out to all
impacted individuals and inform them
of the new CE completion period.
FINRA has made changes, and is also
considering future changes, to the
layout of FinPro to more effectively
communicate the necessary steps that
individuals must take to satisfy their
MQP obligations.
FINRA has filed the proposed rule
change for immediate effectiveness and
has requested that the SEC waive the
requirement that the proposed rule
change not become operative for 30 days
after the date of the filing. The operative
date will be the date of filing of the
proposed rule change, if the SEC grants
the waiver.
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,11 which
requires, among other things, that
FINRA rules must be designed to
prevent fraudulent and manipulative
9 A number of these individuals contacted FINRA
to confirm whether they were required to satisfy
any additional requirements other than completing
the 2024 renewal. To provide FINRA with
additional time to assess the situation, FINRA
temporarily changed the March 31, 2024, due date
for CE completion in its systems. This may have
compounded the confusion because any Look-Back
Individual who may have logged into their FinPro
account during this time would have seen an
interim CE completion date and would have been
able to complete their prescribed CE content based
on that interim CE completion date.
10 This would include any Look-Back Individuals
who were still in the process of completing their
prescribed CE content as of March 31, 2024.
11 15 U.S.C. 78o–3(b)(6).
PO 00000
Frm 00065
Fmt 4703
Sfmt 4703
40521
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest. FINRA believes that
reopening the period by which LookBack Individuals will be able to
complete their prescribed 2022 and
2023 CE content is appropriate under
the circumstances. FINRA believes that
Look-Back Individuals who had
enrolled in the MQP in 2022 and 2023
but had not completed their prescribed
2022 and 2023 CE content by the March
31, 2024, deadline may have been
confused, as described above. FINRA
continues to believe that participation
in the MQP reduces unnecessary
impediments to requalification without
diminishing investor protection.12 In
addition, the MQP promotes other goals,
such as 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. FINRA believes that reopening
the CE completion period, as proposed,
will further these goals and objectives.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
FINRA does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. Further,
FINRA provided an extensive economic
impact assessment relating to the MQP
as part of the rule filing that proposed
the adoption of the MQP.13
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
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
12 As of April 15, 2024, approximately 31,000
individuals, including approximately 20,000 LookBack Individuals, have enrolled in the MQP, of
which approximately 1,400 individuals have used
the MQP to return to the industry without having
to go through requalification.
13 See Securities Exchange Act Release No. 92183
(June 15, 2021), 86 FR 33427 (June 24, 2021) (Notice
of Filing of File No. SR–FINRA–2021–015).
E:\FR\FM\10MYN1.SGM
10MYN1
40522
Federal Register / Vol. 89, No. 92 / Friday, May 10, 2024 / Notices
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 14 and Rule 19b–
4(f)(6) thereunder.15
A proposed rule change filed under
Rule 19b-4(f)(6) 16 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),17 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest.
FINRA has asked the Commission to
waive the 30-day operative delay so that
the proposed rule change may become
operative upon filing. As outlined
above, FINRA states that it plans to
reach out to all impacted individuals
and inform them of the new CE
completion period established by this
rule change. FINRA has indicated that
the immediate operation of the
proposed rule change is appropriate so
that FINRA can communicate the rule
change to impacted individuals
promptly. FINRA also believes that
immediate operation of the proposed
rule change is appropriate because it
would provide clarity to impacted
individuals without unnecessary delay.
For these reasons, the Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest. Therefore, the Commission
hereby waives the operative delay and
designates the proposal operative upon
filing.18
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
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. FINRA has
satisfied this requirement.
16 17 CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
18 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
khammond on DSKJM1Z7X2PROD with NOTICES
15 17
VerDate Sep<11>2014
19:15 May 09, 2024
Jkt 262001
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:
[FR Doc. 2024–10196 Filed 5–9–24; 8:45 am]
Electronic Comments
BILLING CODE 8011–01–P
• 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–
FINRA–2024–006 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–FINRA–2024–006. 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
FINRA. 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–FINRA–2024–006 and
should be submitted on or before May
31, 2024.
PO 00000
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Deputy Secretary.
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
Notice is hereby given,
pursuant to the provisions of the
Government in the Sunshine Act, Public
Law 94–409, that the Securities and
Exchange Commission Investor
Advisory Committee will hold a public
meeting on Thursday, June 6, 2024. The
meeting will begin at 10:00 a.m. (ET)
and will be open to the public.
PLACE: The meeting will be conducted
by remote means. Members of the public
may watch the webcast of the meeting
on the Commission’s website at
www.sec.gov.
STATUS: This Sunshine Act notice is
being issued because a majority of the
Commission may attend the meeting.
PUBLIC COMMENT: The public is invited
to submit written statements to the
Committee. Written statements should
be received on or before June 5, 2024.
Written statements may be submitted
by any of the following methods:
TIME AND DATE:
Electronic Statements
• Use the Commission’s internet
submission form (https://www.sec.gov/
rules/other.shtml); or
• Send an email message to rulescomments@sec.gov. Please include File
No. 265–28 on the subject line; or
Paper Statements
• Send paper statements to Vanessa
A. Countryman, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File No.
265–28. This file number should be
included on the subject line if email is
used. To help us process and review
your statement more efficiently, please
use only one method.
The Commission will post all
statements on the Commission’s
website. Statements also will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE, Room
1503, Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Operating
conditions may limit access to the
19 17
Frm 00066
Fmt 4703
Sfmt 4703
E:\FR\FM\10MYN1.SGM
CFR 200.30–3(a)(12).
10MYN1
]]>Agencies
[Federal Register Volume 89, Number 92 (Friday, May 10, 2024)]
[Notices]
[Pages 40520-40522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10196]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100067; File No. SR-FINRA-2024-006]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend FINRA Rule 1240.01 To Reopen the Period
by Which Certain Participants in the Maintaining Qualifications Program
May Complete Their Prescribed Continuing Education Content
May 6, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 30, 2024, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by FINRA. FINRA has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which
renders the proposal effective upon receipt of this filing by the
Commission. 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.
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to amend FINRA Rule 1240.01 (Eligibility of
Other Persons to Participate in the Continuing Education Program
Specified in Paragraph (c) of this Rule) to reopen the period by which
certain participants in the Maintaining Qualifications Program
(``MQP'') will be able to complete their prescribed 2022 and 2023
continuing education (``CE'') content.
Below is the text of the proposed rule change. Proposed new
language is italicized; proposed deletions are in brackets.
* * * * *
1200. REGISTRATION AND QUALIFICATION
* * * * *
1240. Continuing Education
This Rule prescribes requirements regarding the continuing
education of registered persons. The requirements shall consist of a
Regulatory Element and a Firm Element as set forth below. This Rule
also sets forth continuing education programs through which
specified persons may maintain their qualification in a
representative or principal registration category following the
termination of that registration category.
(a) through (c) No Change.
Supplementary Material:------
.01 Eligibility of Other Persons to Participate in the
Continuing Education Program Specified in Paragraph (c) of this
Rule. A person registered in a representative or principal
registration category with FINRA within two years immediately
preceding March 15, 2022 shall be eligible to participate in the
continuing education program under paragraph (c) of this Rule,
provided that he or she satisfies the conditions set forth in
paragraphs (c)(1) and (c)(3) through (c)(6) of this Rule. In
addition, a person participating in the Financial Services Affiliate
Waiver Program under Rule 1210.09 immediately preceding March 15,
2022 shall be eligible to participate in the continuing education
program under paragraph (c) of this Rule, provided that he or she
satisfies the conditions set forth in paragraphs (c)(3), (c)(5) and
(c)(6) of this Rule. Persons eligible under this Supplementary
Material .01 shall make their election to participate in the
continuing education program under paragraph (c) of this Rule either
(1) between January 31, 2022, and March 15, 2022; or (2) between
March 15, 2023, and December 31, 2023. If such persons elect to
participate in the continuing education program, their participation
period shall also be for a period of five years following the
termination of their registration categories, as with other
participants under paragraph (c) of this Rule. [In addition,
eligible persons who elect to participate in the continuing
education program between March 15, 2023, and December 31, 2023,
must complete any prescribed 2022 and 2023 continuing education
content by March 31, 2024.] Individuals enrolled in the continuing
education program under this Supplementary Material .01 in both 2022
and 2023 who did not complete their prescribed 2022 and 2023
continuing education content as of March 31, 2024, shall be able to
complete such content between May 22, 2024, and July 1, 2024, to be
eligible to continue their participation in the continuing education
program. In addition, any such individuals who will have completed
their prescribed 2022 and 2023 continuing education content between
March 31, 2024, and May 22, 2024, shall be deemed to have completed
such content by July 1, 2024, for purposes of this Supplementary
Material .01.
.02 No Change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA 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. FINRA 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
FINRA Rule 1240.01 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 March 15, 2022 (the
implementation date of the
[[Page 40521]]
MQP); and (2) individuals who were participating in the Financial
Services Affiliate Waiver Program (``FSAWP'') under FINRA Rule 1210.09
(Waiver of Examinations for Individuals Working for a Financial
Services Industry Affiliate of a Member) immediately prior to March 15,
2022 (collectively, ``Look-Back Individuals'').\4\ The rule provided
two open enrollment periods for Look-Back Individuals to participate in
the MQP.\5\ FINRA provided all Look-Back Individuals who had enrolled
in the MQP until March 31, 2024, to complete any prescribed 2022 and
2023 CE content.\6\ Look-Back Individuals who are enrolled in the MQP,
similar to other MQP participants, are able to complete any prescribed
CE and renew their annual MQP participation through their FINRA
Financial Professional Gateway (``FinPro'') accounts.
---------------------------------------------------------------------------
\4\ 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. FINRA stopped accepting new
participants for the FSAWP beginning on March 15, 2022; however,
individuals who were already participating in the FSAWP prior to
that date had the option of continuing in the FSAWP.
\5\ In March 2023, FINRA amended Rule 1240.01 to provide Look-
Back Individuals with a second opportunity to participate in the
MQP. See Securities Exchange Act Release No. 97184 (March 22, 2023),
88 FR 18359 (March 28, 2023) (Notice of Filing and Immediate
Effectiveness of File No. SR-FINRA-2023-005).
\6\ FINRA determined to treat the individuals who enrolled
during the first period (between January 31, 2022, and March 15,
2022) the same as those who enrolled during the second period
(between March 15, 2023, and December 31, 2023) for purposes of the
March 31, 2024, deadline for completion of prescribed 2022 and 2023
CE content. This is because those who had enrolled in the MQP during
the first period satisfied all of the eligibility criteria for
enrollment during the second period and would have been able to
complete their prescribed CE content by March 31, 2024, had they
chosen to enroll during the second period instead of enrolling
during the first period.
---------------------------------------------------------------------------
On March 16, 2024, FINRA sent an email to Look-Back Individuals who
had enrolled in the MQP but had not completed their prescribed CE to
remind them of the March 31, 2024, deadline.\7\ In the week leading up
to the deadline, however, FINRA noticed that several thousand of those
individuals were renewing their participation in the MQP for 2024
instead of completing their prescribed CE.\8\ FINRA believes that some
of those individuals may have been confused by the layout of their
FinPro accounts. Specifically, if they selected the 2024 renewal
banner, which was prominently displayed on their FinPro accounts, and
completed the renewal process, they would not have been automatically
redirected to complete any prescribed CE. Therefore, individuals may
have inadvertently assumed that completion of the renewal process alone
would have satisfied all of the necessary requirements to continue
their participation in the MQP.\9\
---------------------------------------------------------------------------
\7\ FINRA had sent multiple reminders prior to March 16, 2024,
but the March 16, 2024, email was the last reminder that was sent
prior to the March 31, 2024, deadline for completion of any
prescribed 2022 and 2023 CE content.
\8\ Look-Back Individuals who enrolled in the MQP have until
December 31, 2024, to renew their participation in the MQP for 2024,
provided that they complete their prescribed CE by the stated
deadline.
\9\ A number of these individuals contacted FINRA to confirm
whether they were required to satisfy any additional requirements
other than completing the 2024 renewal. To provide FINRA with
additional time to assess the situation, FINRA temporarily changed
the March 31, 2024, due date for CE completion in its systems. This
may have compounded the confusion because any Look-Back Individual
who may have logged into their FinPro account during this time would
have seen an interim CE completion date and would have been able to
complete their prescribed CE content based on that interim CE
completion date.
---------------------------------------------------------------------------
For these reasons, FINRA is proposing to amend Rule 1240.01 to
provide Look-Back Individuals enrolled in the MQP in both 2022 and 2023
who did not complete their prescribed 2022 and 2023 CE content as of
March 31, 2024, the opportunity to complete such content between May
22, 2024, and July 1, 2024, to be eligible to continue their
participation in the MQP.\10\ FINRA is also proposing to amend the rule
to provide that any such individuals who will have completed their
prescribed 2022 and 2023 CE content between March 31, 2024, and May 22,
2024, will be deemed to have completed such content by July 1, 2024,
for purposes of the rule. FINRA plans to reach out to all impacted
individuals and inform them of the new CE completion period. FINRA has
made changes, and is also considering future changes, to the layout of
FinPro to more effectively communicate the necessary steps that
individuals must take to satisfy their MQP obligations.
---------------------------------------------------------------------------
\10\ This would include any Look-Back Individuals who were still
in the process of completing their prescribed CE content as of March
31, 2024.
---------------------------------------------------------------------------
FINRA has filed the proposed rule change for immediate
effectiveness and has requested that the SEC waive the requirement that
the proposed rule change not become operative for 30 days after the
date of the filing. The operative date will be the date of filing of
the proposed rule change, if the SEC grants the waiver.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\11\ which requires, among
other things, that FINRA 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. FINRA believes that reopening the period by which
Look-Back Individuals will be able to complete their prescribed 2022
and 2023 CE content is appropriate under the circumstances. FINRA
believes that Look-Back Individuals who had enrolled in the MQP in 2022
and 2023 but had not completed their prescribed 2022 and 2023 CE
content by the March 31, 2024, deadline may have been confused, as
described above. FINRA continues to believe that participation in the
MQP reduces unnecessary impediments to requalification without
diminishing investor protection.\12\ In addition, the MQP promotes
other goals, such as 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. FINRA
believes that reopening the CE completion period, as proposed, will
further these goals and objectives.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78o-3(b)(6).
\12\ As of April 15, 2024, approximately 31,000 individuals,
including approximately 20,000 Look-Back Individuals, have enrolled
in the MQP, of which approximately 1,400 individuals have used the
MQP to return to the industry without having to go through
requalification.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. Further, FINRA provided an
extensive economic impact assessment relating to the MQP as part of the
rule filing that proposed the adoption of the MQP.\13\
---------------------------------------------------------------------------
\13\ See Securities Exchange Act Release No. 92183 (June 15,
2021), 86 FR 33427 (June 24, 2021) (Notice of Filing of File No. SR-
FINRA-2021-015).
---------------------------------------------------------------------------
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
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
[[Page 40522]]
as the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6)
thereunder.\15\
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
FINRA has satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. FINRA has asked the
Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. As outlined above, FINRA
states that it plans to reach out to all impacted individuals and
inform them of the new CE completion period established by this rule
change. FINRA has indicated that the immediate operation of the
proposed rule change is appropriate so that FINRA can communicate the
rule change to impacted individuals promptly. FINRA also believes that
immediate operation of the proposed rule change is appropriate because
it would provide clarity to impacted individuals without unnecessary
delay. For these reasons, the Commission believes that waiving the 30-
day operative delay is consistent with the protection of investors and
the public interest. Therefore, the Commission hereby waives the
operative delay and designates the proposal operative upon filing.\18\
---------------------------------------------------------------------------
\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule'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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-FINRA-2024-006 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-FINRA-2024-006. 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 FINRA. 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-FINRA-2024-006 and should be submitted
on or before May 31, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------
\19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-10196 Filed 5-9-24; 8:45 am]
BILLING CODE 8011-01-P
