Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend Supplementary Material .06 Under NYSE American Rule 341A, 53131-53134 [2024-13836]

Download as PDF Federal Register / Vol. 89, No. 122 / Tuesday, June 25, 2024 / Notices Commission shall institute proceedings under Section 19(b)(2)(B) 24 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: 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– NYSE–2024–36 on the subject line. khammond on DSKJM1Z7X2PROD with NOTICES 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–NYSE–2024–36. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. 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. 24 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 17:03 Jun 24, 2024 Jkt 262001 All submissions should refer to file number SR–NYSE–2024–36 and should be submitted on or before July 16, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.25 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–13828 Filed 6–24–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100375; File No. SR– NYSEAMER–2024–39] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend Supplementary Material .06 Under NYSE American Rule 341A June 18, 2024. 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 17, 2024, 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 Supplementary Material .06 under NYSE American Rule 341A to harmonize with recent changes to Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) Rule 1240.01 reopening the period by which certain participants in the Maintaining Qualifications Program can complete their 2022 and 2023 continuing education content. 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. 25 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 53131 II. Self-Regulatory Organization’s Statement of the Purpose of, and the 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 Exchange proposes to amend Supplementary Material .06 under NYSE American Rule 341A (Eligibility of Other Persons to Participate in the Continuing Education Program Specified in Section (c) of this Rule) to harmonize with recent changes to FINRA Rule 1240.01 (Eligibility of Other Persons to Participate in the Continuing Education Program Specified in Paragraph (c) of this Rule) reopening the period by which certain participants in the Maintaining Qualifications Program (‘‘MQP’’) can complete their 2022 and 2023 continuing education (‘‘CE’’) content. This proposed rule change would harmonize the Exchange’s CE rules with those of FINRA and thus promote uniform CE standards across the securities industry.4 Background The continuing education program for registered persons of broker-dealers (‘‘CE Program’’) set forth in Rule 341A 5 requires registered persons to complete CE consisting of a Regulatory Element and a Firm Element. The Regulatory Element, 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 4 See Securities Exchange Act Release No. 100067 (May 6, 2024), 89 FR 40520 (May 10, 2024) (SR– FINRA–2024–006) (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) (‘‘Release No. 10067’’). 5 See also Commentary .06 to NYSE American Rule 2.1210 (All Registered Representatives and Principals Must Satisfy the Regulatory Element of Continuing Education). E:\FR\FM\25JNN1.SGM 25JNN1 53132 Federal Register / Vol. 89, No. 122 / Tuesday, June 25, 2024 / Notices khammond on DSKJM1Z7X2PROD with NOTICES strategies the firm offers, firm policies and industry trends. In 2022, the Exchange amended NYSE American Rules 2.1210 (Registration Requirements), 341A (Continuing Education for Registered Persons), and 2.21E (Employees of ETP Holders Registrations) to, among other things, provide eligible individuals terminating any of their representative or principal registration categories the option of maintaining their qualification for any terminated registration categories by completing annual CE through a new program known as the MQP.6 The MQP under NYSE American Rule 341A.06 contains a look-back provision that, subject to specified conditions, extends 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 (i.e., the MQP implementation date); and (2) individuals who were participating in the Financial Services Affiliate Waiver Program (‘‘FSAWP’’) under NYSE American Rule 2.1210, Commentary .08 (Waiver of Examinations for Individuals Working for a Financial Services Industry Affiliate of a Member Organization or ETP Holder) immediately prior to May 25, 2022 (collectively, the ‘‘Look-Back Individuals’’).7 Given that many eligible individuals were unable to participate in the MQP because they failed, for various reasons, to make an election before March 15, 2022, the Exchange provided Look-Back Individuals a second opportunity to elect to participate in the MQP to maintain their qualification in 2023.8 Specifically, Rule 341A.06 was amended to provide eligible persons who elected to participate in the CE Program between June 5, 2023, and December 31, 2023 until March 31, 2024 to complete any prescribed 2022 and 2023 CE. The Exchange’s filing was 6 See Securities Exchange Act Release No. 95064 (June 7, 2022), 87 FR 35812 (June 13, 2022) (SR– NYSEAMER–2022–20) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change of Amendments to the Exchange’s Rules Regarding Continuing Education Requirements). 7 The FSAWP is a waiver program for eligible individuals who have left a member organization or ETP Holder to work for a foreign or domestic financial services affiliate of a member firm. The Exchange 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. 8 See Securities Exchange Act Release No. 97742 (June 16, 2023), 88 FR 41168 (June 23, 2023) (SR– NYSEAmeri–2023–33) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change of Amendments to the Exchange’s Rules Regarding Continuing Education Requirements). VerDate Sep<11>2014 17:03 Jun 24, 2024 Jkt 262001 based on FINRA’s earlier amendment to Rule 1240.01.9 Recently, FINRA again amended its Rule 1240.01 to provide eligible 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 also amended its 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.11 In its filing, FINRA represented that during the process of reaching out to Look-Back Individuals who had enrolled in the MQP but not completed their prescribed CE to remind them of the March 31, 2024 deadline, it noticed that several thousand of those individuals were renewing their participation in the MQP for 2024 instead of completing their prescribed CE.12 FINRA believes that some of those individuals may have been confused by the layout of the FINRA Financial Professional Gateway accounts and 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.13 Proposed Rule Change NYSE American Rule 341A.06 provides that eligible persons who elect to participate in the CE Program between June 5, 2023 and December 31, 2023 must complete any prescribed 2022 and 2023 CE content by March 31, 2024. The Exchange proposes to delete this language as obsolete. 9 See id. See also 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). Like FINRA, the Exchange 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 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. 10 See Release No. 100067, 89 FR at 40520. 11 See id. 12 See id. at 40521. 13 See id. PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 In addition, in order to harmonize with FINRA and avoid any potential regulatory gaps, the Exchange proposes to add the following text (italicized) to Rule 341A.06: Individuals enrolled in the continuing education program under this Supplementary Material .06 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 [the effective date of filing], 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 [the effective date of filing], shall be deemed to have completed such content by July 1, 2024, for purposes of this Supplementary Material .06. The proposed text is substantially similar to the language adopted by FINRA in its Rule 1240.01.14 As discussed below, the Exchange believes that the proposed rule change is eligible for immediate effectiveness and has requested that the Commission waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act,15 in general, and furthers the objectives of Section 6(b)(5),16 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. Additionally, the Exchange believes the proposed rule change is designed to provide a fair procedure for the disciplining of members and persons associated with members, consistent with Sections 6(b)(7) and 6(d) of the Act.17 The Exchange believes that the proposed rule changes support the objectives of the Act by harmonizing Exchange rules modeled on FINRA’s rules, resulting in less burdensome and more efficient regulatory compliance. The proposed rule change would provide Look-Back Individuals another opportunity to complete their 14 See Release No. 100067, 89 FR at 40520. U.S.C. 78f(b). 16 15 U.S.C. 78f(b)(5). 17 15 U.S.C. 78f(b)(7) & 78f(d). 15 15 E:\FR\FM\25JNN1.SGM 25JNN1 Federal Register / Vol. 89, No. 122 / Tuesday, June 25, 2024 / Notices prescribed 2022 and 2023 CE content in order to remain eligible to continue their participation in the MQP, thereby promoting efficiency because participation in the MQP would reduce unnecessary impediments to requalification for these individuals without diminishing investor protection. In addition, the Exchange agrees with FINRA that 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.18 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. The Exchange believes that reopening the CE completion period, as proposed, and providing Look-Back Individuals another 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. khammond on DSKJM1Z7X2PROD with NOTICES 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 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 18 See Release No. 100067, 89 FR at 40521. VerDate Sep<11>2014 17:03 Jun 24, 2024 Jkt 262001 which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 19 and Rule 19b– 4(f)(6) thereunder.20 A proposed rule change filed under Rule 19b–4(f)(6) 21 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),22 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposed rule change may become operative upon filing. NYSE American, like FINRA, requests that the proposed rule change become operative as quickly as possible so NYSE American can communicate the rule change to impacted individuals in a timely manner. Waiver of the operative delay would allow the Exchange to implement the proposed changes to its CE rules without delay, thereby eliminating the possibility of a significant regulatory gap between the FINRA 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. 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.23 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 under Section 19(b)(2)(B) 24 of the Act to determine whether the proposed rule 19 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. The Exchange has satisfied this requirement. 21 17 CFR 240.19b–4(f)(6). 22 17 CFR 240.19b–4(f)(6)(iii). 23 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). 24 15 U.S.C. 78s(b)(2)(B). 20 17 PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 53133 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: 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– NYSEAMER–2024–39 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–NYSEAMER–2024–39. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. 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–NYSEAMER–2024–39 and should be submitted on or before July 16, 2024. E:\FR\FM\25JNN1.SGM 25JNN1 53134 Federal Register / Vol. 89, No. 122 / Tuesday, June 25, 2024 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.25 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–13836 Filed 6–24–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100364; File No. SR–C2– 2024–010] Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule Related to Physical Port Fees June 18, 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 June 7, 2024, Cboe C2 Exchange, Inc. (the ‘‘Exchange’’ or ‘‘C2’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe C2 Exchange, Inc. (the ‘‘Exchange’’ or ‘‘C2 Options’’) proposes to amend its Fees Schedule. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://markets.cboe.com/us/ options/regulation/rule_filings/ctwo/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. khammond on DSKJM1Z7X2PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The 25 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 17:03 Jun 24, 2024 Jkt 262001 Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its fee schedule relating to physical connectivity fees.3 By way of background, a physical port is utilized by a Trading Permit Holder (‘‘TPH’’) or non-TPH to connect to the Exchange at the data centers where the Exchange’s servers are located. The Exchange currently assesses the following physical connectivity fees for TPHs and non-TPHs on a monthly basis: $2,500 per physical port for a 1 gigabit (‘‘Gb’’) circuit and $7,500 per physical port for a 10 Gb circuit. The Exchange proposes to increase the monthly fee for 10 Gb physical ports from $7,500 to $8,500 per port. The Exchange notes the proposed fee change better enables it to continue to maintain and improve its market technology and services and also notes that the proposed fee amount, even as amended, continues to be in line with, or even lower than, amounts assessed by other exchanges for similar connections.4 The Exchange also notes that a single 10 Gb physical port can be used to access the Systems of the following affiliate exchanges: the Cboe BYX Exchange, Inc., Cboe BZX Exchange, Inc. (options and equities 3 The Exchange initially filed the proposed fee changes on July 3, 2023 (SR–C2–2023–014). On September 1, 2023, the Exchange withdrew that filing and submitted SR–C2–2023–020. On September 29, 2023, the Securities and Exchange Commission issued a Suspension of and Order Instituting Proceedings to Determine whether to Approve or Disapprove a Proposed Rule Change to Amend its Fees Schedule Related to Physical Port Fees (the ‘‘OIP’’) in anticipation of a possible U.S. government shutdown. ’’). On September 29, 2023, the Exchange filed the proposed fee change (SR– C2–2023–021). On October 13, 2023, the Exchange withdrew that filing and submitted SR–C2–2023– 022. On December 12, 2023, the Exchange withdrew that filing and submitted SR–C2–2023–025. On February 9, 2024, the Exchange withdrew that filing and submitted SR–C2–2024–004. On April 9, 2024, the Exchange withdrew that filing and submitted SR–C2–2024–005. On June 7, 2024 the Exchange withdrew that filing and submitted this filing. 4 See e.g., The Nasdaq Stock Market LLC (‘‘Nasdaq’’), General 8, Connectivity to the Exchange. Nasdaq and its affiliated exchanges charge a monthly fee of $15,000 for each 10–Gb Ultra fiber connection to the respective exchange, which is analogous to the Exchange’s 10–Gb physical port. See also New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago Inc., NYSE National, Inc. Connectivity Fee Schedule, which provides that 10 Gb LX LCN Circuits (which are analogous to the Exchange’s 10 Gb physical port) are assessed $22,000 per month, per port. PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 platforms), Cboe EDGX Exchange, Inc. (options and equities platforms), and Cboe EDGA Exchange, Inc., (‘‘Affiliate Exchanges’’).5 Notably, only one monthly fee currently (and will continue) to apply per 10 Gb physical port regardless of how many affiliated exchanges are accessed through that one port.6 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.7 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 8 requirements that the rules of an exchange be 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 regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 9 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange also believes the proposed rule change is consistent with Section 6(b)(4) 10 of the Act, which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its TPHs and other persons using its facilities. The Exchange operates in a highly competitive environment. On May 21, 2019, the SEC Division of Trading and Markets issued non-rulemaking fee filing guidance titled ‘‘Staff Guidance on SRO Rule Filings Relating to Fees’’ (‘‘Fee Guidance’’), which provided, among other things, that in determining whether a proposed fee is constrained by significant competitive forces, the 5 The Affiliate Exchanges are also submitting contemporaneous identical rule filings. 6 The Exchange notes that conversely, other exchange groups charge separate port fees for access to separate, but affiliated, exchanges. See e.g., Securities and Exchange Release No. 99822 (March 21, 2024), 89 FR 21337 (March 27, 2024) (SR– MIAX–2024–016). 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). 9 Id. 10 15 U.S.C. 78f(b)(4). E:\FR\FM\25JNN1.SGM 25JNN1

Agencies

[Federal Register Volume 89, Number 122 (Tuesday, June 25, 2024)]
[Notices]
[Pages 53131-53134]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-13836]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100375; File No. SR-NYSEAMER-2024-39]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Change To Amend 
Supplementary Material .06 Under NYSE American Rule 341A

June 18, 2024.
    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 17, 2024, 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.
---------------------------------------------------------------------------

    \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 Supplementary Material .06 under 
NYSE American Rule 341A to harmonize with recent changes to Financial 
Industry Regulatory Authority, Inc. (``FINRA'') Rule 1240.01 reopening 
the period by which certain participants in the Maintaining 
Qualifications Program can complete their 2022 and 2023 continuing 
education content. 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 the 
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 Exchange proposes to amend Supplementary Material .06 under 
NYSE American Rule 341A (Eligibility of Other Persons to Participate in 
the Continuing Education Program Specified in Section (c) of this Rule) 
to harmonize with recent changes to FINRA Rule 1240.01 (Eligibility of 
Other Persons to Participate in the Continuing Education Program 
Specified in Paragraph (c) of this Rule) reopening the period by which 
certain participants in the Maintaining Qualifications Program 
(``MQP'') can complete their 2022 and 2023 continuing education 
(``CE'') content. This proposed rule change would harmonize the 
Exchange's CE rules with those of FINRA and thus promote uniform CE 
standards across the securities industry.\4\
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    \4\ See Securities Exchange Act Release No. 100067 (May 6, 
2024), 89 FR 40520 (May 10, 2024) (SR-FINRA-2024-006) (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) (``Release No. 
10067'').
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Background
    The continuing education program for registered persons of broker-
dealers (``CE Program'') set forth in Rule 341A \5\ requires registered 
persons to complete CE consisting of a Regulatory Element and a Firm 
Element. The Regulatory Element, 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

[[Page 53132]]

strategies the firm offers, firm policies and industry trends.
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    \5\ See also Commentary .06 to NYSE American Rule 2.1210 (All 
Registered Representatives and Principals Must Satisfy the 
Regulatory Element of Continuing Education).
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    In 2022, the Exchange amended NYSE American Rules 2.1210 
(Registration Requirements), 341A (Continuing Education for Registered 
Persons), and 2.21E (Employees of ETP Holders Registrations) to, among 
other things, provide eligible individuals terminating any of their 
representative or principal registration categories the option of 
maintaining their qualification for any terminated registration 
categories by completing annual CE through a new program known as the 
MQP.\6\ The MQP under NYSE American Rule 341A.06 contains a look-back 
provision that, subject to specified conditions, extends 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 (i.e., the MQP implementation date); and (2) individuals who 
were participating in the Financial Services Affiliate Waiver Program 
(``FSAWP'') under NYSE American Rule 2.1210, Commentary .08 (Waiver of 
Examinations for Individuals Working for a Financial Services Industry 
Affiliate of a Member Organization or ETP Holder) immediately prior to 
May 25, 2022 (collectively, the ``Look-Back Individuals'').\7\
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    \6\ See Securities Exchange Act Release No. 95064 (June 7, 
2022), 87 FR 35812 (June 13, 2022) (SR-NYSEAMER-2022-20) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change of 
Amendments to the Exchange's Rules Regarding Continuing Education 
Requirements).
    \7\ The FSAWP is a waiver program for eligible individuals who 
have left a member organization or ETP Holder to work for a foreign 
or domestic financial services affiliate of a member firm. The 
Exchange 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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    Given that many eligible individuals were unable to participate in 
the MQP because they failed, for various reasons, to make an election 
before March 15, 2022, the Exchange provided Look-Back Individuals a 
second opportunity to elect to participate in the MQP to maintain their 
qualification in 2023.\8\ Specifically, Rule 341A.06 was amended to 
provide eligible persons who elected to participate in the CE Program 
between June 5, 2023, and December 31, 2023 until March 31, 2024 to 
complete any prescribed 2022 and 2023 CE. The Exchange's filing was 
based on FINRA's earlier amendment to Rule 1240.01.\9\
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    \8\ See Securities Exchange Act Release No. 97742 (June 16, 
2023), 88 FR 41168 (June 23, 2023) (SR-NYSEAmeri-2023-33) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change of 
Amendments to the Exchange's Rules Regarding Continuing Education 
Requirements).
    \9\ See id. See also 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). Like FINRA, the Exchange 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 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.
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    Recently, FINRA again amended its Rule 1240.01 to provide eligible 
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 also amended its 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.\11\
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    \10\ See Release No. 100067, 89 FR at 40520.
    \11\ See id.
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    In its filing, FINRA represented that during the process of 
reaching out to Look-Back Individuals who had enrolled in the MQP but 
not completed their prescribed CE to remind them of the March 31, 2024 
deadline, it noticed that several thousand of those individuals were 
renewing their participation in the MQP for 2024 instead of completing 
their prescribed CE.\12\ FINRA believes that some of those individuals 
may have been confused by the layout of the FINRA Financial 
Professional Gateway accounts and 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.\13\
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    \12\ See id. at 40521.
    \13\ See id.
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Proposed Rule Change
    NYSE American Rule 341A.06 provides that eligible persons who elect 
to participate in the CE Program between June 5, 2023 and December 31, 
2023 must complete any prescribed 2022 and 2023 CE content by March 31, 
2024. The Exchange proposes to delete this language as obsolete.
    In addition, in order to harmonize with FINRA and avoid any 
potential regulatory gaps, the Exchange proposes to add the following 
text (italicized) to Rule 341A.06:

    Individuals enrolled in the continuing education program under 
this Supplementary Material .06 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 
[the effective date of filing], 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 [the effective date of filing], shall be deemed to 
have completed such content by July 1, 2024, for purposes of this 
Supplementary Material .06.

    The proposed text is substantially similar to the language adopted 
by FINRA in its Rule 1240.01.\14\
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    \14\ See Release No. 100067, 89 FR at 40520.
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    As discussed below, the Exchange believes that the proposed rule 
change is eligible for immediate effectiveness and has requested that 
the Commission waive the requirement that the proposed rule change not 
become operative for 30 days after the date of the filing.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\15\ in general, and furthers the objectives of Section 
6(b)(5),\16\ 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. Additionally, the Exchange believes 
the proposed rule change is designed to provide a fair procedure for 
the disciplining of members and persons associated with members, 
consistent with Sections 6(b)(7) and 6(d) of the Act.\17\
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
    \17\ 15 U.S.C. 78f(b)(7) & 78f(d).
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    The Exchange believes that the proposed rule changes support the 
objectives of the Act by harmonizing Exchange rules modeled on FINRA's 
rules, resulting in less burdensome and more efficient regulatory 
compliance. The proposed rule change would provide Look-Back 
Individuals another opportunity to complete their

[[Page 53133]]

prescribed 2022 and 2023 CE content in order to remain eligible to 
continue their participation in the MQP, thereby promoting efficiency 
because participation in the MQP would reduce unnecessary impediments 
to requalification for these individuals without diminishing investor 
protection. In addition, the Exchange agrees with FINRA that 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.\18\ 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. The 
Exchange believes that reopening the CE completion period, as proposed, 
and providing Look-Back Individuals another opportunity to elect to 
participate in the MQP will further these goals and objectives.
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    \18\ See Release No. 100067, 89 FR at 40521.
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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

    Because the foregoing proposed rule change does not: (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \19\ and Rule 19b-
4(f)(6) thereunder.\20\
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 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. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \21\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\22\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative upon filing. NYSE American, like 
FINRA, requests that the proposed rule change become operative as 
quickly as possible so NYSE American can communicate the rule change to 
impacted individuals in a timely manner. Waiver of the operative delay 
would allow the Exchange to implement the proposed changes to its CE 
rules without delay, thereby eliminating the possibility of a 
significant regulatory gap between the FINRA 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. 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.\23\
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    \21\ 17 CFR 240.19b-4(f)(6).
    \22\ 17 CFR 240.19b-4(f)(6)(iii).
    \23\ 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).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \24\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \24\ 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-NYSEAMER-2024-39 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-NYSEAMER-2024-39. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. 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-NYSEAMER-2024-39 and 
should be submitted on or before July 16, 2024.


[[Page 53134]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-13836 Filed 6-24-24; 8:45 am]
BILLING CODE 8011-01-P
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