Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Rules Relating to the Continuing Education for Registered Persons as Provided Under Exchange Rule 2.16.01, 54096-54099 [2024-14216]
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54096
Federal Register / Vol. 89, No. 125 / Friday, June 28, 2024 / Notices
to Rule 19b4(f)(6)(iii),21 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposed rule change may become
operative upon filing. The Exchange,
like FINRA, requests that the proposed
rule change become operative as quickly
as possible so FINRA, on behalf of the
Exchange, 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.22
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) 23 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
khammond on DSKJM1Z7X2PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeBYX–2024–016 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–CboeBYX–2024–016. 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 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–CboeBYX–2024–016 and
should be submitted on or before July
19, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–14213 Filed 6–27–24; 8:45 am]
BILLING CODE 8011–01–P
21 17
CFR 240.19b–4(f)(6)(iii).
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).
23 15 U.S.C. 78s(b)(2)(B).
22 For
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100414; File No. SRCboeEDGX–2024–027]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Its
Rules Relating to the Continuing
Education for Registered Persons as
Provided Under Exchange Rule 2.16.01
June 24, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b-4 thereunder,2
notice is hereby given that on June 12,
2024, Cboe EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) 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 Exchange. The Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b-4(f)(6) thereunder.4 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 EDGX, Inc. (the ‘‘Exchange’’ or
‘‘EDGX’’) proposes to amend its rules
relating to the Continuing Education for
Registered Persons as provided under
Exchange Rule 2.16.01. 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/edgx/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
1 15
U.S.C. 78s(b)(1).
CFR 240.19b-4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b-4(f)(6).
2 17
24 17
PO 00000
CFR 200.30–3(a)(12).
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Federal Register / Vol. 89, No. 125 / Friday, June 28, 2024 / Notices
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 proposed rule change amends
Exchange Rule 2.16.01 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 content.
In 2021, the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
implemented rule changes, which
amended FINRA’s Continuing
Education (‘‘CE’’) Program requirements
to, among other things, provide eligible
individuals who terminate any of their
representative or principal registration
categories the option of maintaining
their qualification for any terminated
registration categories by completing
annual CE through a new program, the
MQP.5 Under FINRA Rule 1240.01, the
MQP designated a look-back provision
that, subject to specified conditions,
extended the option to participate in the
MQP to individuals who: (1) were
registered as a representative or
principal within two years immediately
prior to March 15, 2022 (the
implementation date of the MQP); and
(2) individuals who were participating
in the Financial Services Affiliate
Waiver Program (‘‘FSAWP’’) 6 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’’).
In 2023, FINRA amended FINRA Rule
1240.01, to provide Look-Back
Individuals a second opportunity to
elect to participate in the MQP (the
‘‘FINRA Second Enrollment Period’’).7
khammond on DSKJM1Z7X2PROD with NOTICES
5 See
Securities Exchange Act Release No. 93097
(September 21, 2021), 86 FR 53358 (September 27,
2021) (Order Approving File No. SR–FINRA–2021–
015). Other exchanges, including EDGX,
subsequently filed copycat rule filings to align their
continuing education rules with those of FINRA.
See Securities Exchange Act Release No. 94527
(March 28, 2022), 87 FR 18825 (March 31, 2022),
(SR-CboeEDGX–2022–017).
6 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.
7 See Securities Exchange Act Release No. 97184
(March 22, 2023), 88 FR 18359 (March 28, 2023)
(SR–FINRA–2023–005).
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The proposed rule change required that
Look-Back Individuals who elect to
participate in the MQP during the
FINRA Second Enrollment Period
complete any prescribed 2022 and 2023
MQP content by March 31, 2024. LookBack 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.
In response to FINRA’s rule changes
and to facilitate compliance with the
Exchange’s CE Program requirements by
members of multiple exchanges, the
Exchange implemented rule changes to
align with FINRA’s CE Program.8 Such
rules, among other things, provide
eligible individuals who terminate any
of their representative or principal
registrations the option of maintaining
their qualification for any of the
terminated registrations by completing
CE through the MQP. Further, Exchange
Rule 2.16.01 includes a look-back
provision that, subject to specified
conditions, extends the option for
maintaining qualifications following a
registration category termination to (i)
individuals who have been registered as
a representative or principal within two
years immediately preceding March 15,
2022, and (ii) individuals who have
been participants of the FSAWP
immediately preceding March 15, 2022
implementation (i.e., Look-Back
Individuals). Exchange Rule 2.16.01 also
provided Look-Back Individuals with a
second enrollment period, between
October 19, 2023, and December 31,
2023 (the ‘‘Exchange Second Enrollment
Period’’). Exchange Rule 2.16.01
requires that Look-Back Individuals
who elect to participate in the MQP
during the Exchange Second Enrollment
Period complete any prescribed 2022
and 2023 MQP content by March 31,
2024.9
FINRA recently submitted a proposal
related to its CE Program (the ‘‘FINRA
Rule Change’’).10 The proposal set forth
8 See
Rules 2.16(c), 2.16.01, and 2.16.02.
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 October 19, 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.
10 See Securities Exchange Act Release No.
100067 (May 6, 2024), 89 FR 40520 (May 10, 2024)
(SR–FINRA–2024–006).
9 The
PO 00000
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54097
changes to FINRA 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.11 In addition,
the proposed rule change provides 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.
In the FINRA Rule Change, FINRA
noted that FINRA sent multiple
reminders, including a March 16, 2024
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. In the FINRA Rule Change,
FINRA further noted that in the week
leading up to the deadline, FINRA
noticed that several thousand of those
individuals were renewing their
participation in the MQP for 2024
instead of completing their prescribed
CE.12 Per the FINRA Rule Change,
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.13
For similar reasons and to facilitate
compliance with the Exchange’s CE
Program requirements by members of
multiple exchanges, the Exchange is
11 This would include any Look-Back Individuals
who were still in the process of completing their
prescribed CE content as of March 31, 2024.
12 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.
13 According to FINRA, 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.
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Federal Register / Vol. 89, No. 125 / Friday, June 28, 2024 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
also proposing to amend its rules (i.e.,
Exchange Rule 2.16.01) 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 the effective date of
this filing, and July 1, 2024, to be
eligible to continue their participation
in the MQP.14 In addition, the proposed
rule change provides that any such
individuals who will have completed
their prescribed 2022 and 2023 CE
content between March 31, 2024, and
the effective date of this filing, will be
deemed to have completed such content
by July 1, 2024, for purposes of the rule.
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.15 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 16 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) 17 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange 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. As FINRA noted in the
FINRA Rule Change, 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. The Exchange believes
that participation in the MQP reduces
14 This would include any Look-Back Individuals
who were still in the process of completing their
prescribed CE content as of March 31, 2024.
15 15 U.S.C. 78f(b).
16 15 U.S.C. 78f(b)(5).
17 Id.
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unnecessary impediments to
requalification for these individuals
without diminishing investor
protection. In addition, the proposed
rule change is consistent with other
goals, such as the promotion of diversity
and inclusion in the securities industry
by attracting and retaining a broader and
diverse group of professionals. The
MQP also allows the industry to retain
expertise from skilled individuals,
providing investors with the advantage
of greater experience among the
individuals working in the industry.
The Exchange believes that reopening
the CE completion period, as proposed,
will further these goals and objectives.
Further, the Exchange believes the
proposed amendments reduce the
possibility of a regulatory gap between
Exchange and FINRA rules, providing
more uniform standards across the
securities industry. The Exchange
believes that the proposed rule change
will bring consistency and uniformity
with FINRA’s recently amended CE
Program, which will, in turn, assist
members and their associated persons in
complying with these rules and improve
regulatory efficiency. The proposed rule
changes make ministerial changes to the
Exchange’s CE rules to align them with
the CE rules of FINRA, in order to
prevent unnecessary regulatory burdens
and to promote efficient administration
of the rules.
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 changes which are, in all material
respects, based upon and substantially
similar to, recent rule changes 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
The Exchange neither solicited nor
received comments on the proposed
rule change.
PO 00000
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Fmt 4703
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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 18 and Rule 19b4(f)(6) thereunder.19
A proposed rule change filed under
Rule 19b–4(f)(6) 20 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),21 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposed rule change may become
operative upon filing. The Exchange,
like FINRA, requests that the proposed
rule change become operative as quickly
as possible so FINRA, on behalf of the
Exchange, 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.22
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
18 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.
20 17 CFR 240.19b–4(f)(6).
21 17 CFR 240.19b–4(f)(6)(iii).
22 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
19 17
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Federal Register / Vol. 89, No. 125 / Friday, June 28, 2024 / Notices
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 23 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
khammond on DSKJM1Z7X2PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeEDGX–2024–027 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–CboeEDGX–2024–027. 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 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
23 15
U.S.C. 78s(b)(2)(B).
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19:25 Jun 27, 2024
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–CboeEDGX–2024–027 and
should be submitted on or before July
19, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–14216 Filed 6–27–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–541, OMB Control No.
3235–0620]
Proposed Collection; Comment
Request; Extension: Rule 22c–2
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) the Securities
and Exchange Commission (the
‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 22c–2 (17 CFR 270.22c–2) under
the Investment Company Act of 1940
(15 U.S.C. 80a) (the ‘‘Investment
Company Act’’) requires the board of
directors (including a majority of
independent directors) of most
registered open-end investment
companies (‘‘funds’’) to either approve a
redemption fee of up to two percent or
determine that imposition of a
redemption fee is not necessary or
appropriate for the fund. Rule 22c–2
also requires a fund to enter into written
agreements with their financial
intermediaries (such as broker-dealers
and retirement plan administrators)
under which the fund, upon request,
can obtain certain shareholder identity
and trading information from the
intermediaries. The written agreement
must also allow the fund to direct the
intermediary to prohibit further
purchases or exchanges by specific
shareholders that the fund has
24 17
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CFR 200.30–3(a)(12).
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54099
identified as being engaged in
transactions that violate the fund’s
market timing policies. These
requirements enable funds to obtain the
information that they need to monitor
the frequency of short-term trading in
omnibus accounts and enforce their
market timing policies.
The rule includes three ‘‘collections
of information’’ within the meaning of
the Paperwork Reduction Act of 1995
(‘‘PRA’’).1 First, the rule requires boards
to either approve a redemption fee of up
to two percent or determine that
imposition of a redemption fee is not
necessary or appropriate for the fund.
Second, funds must enter into
information sharing agreements with all
of their ‘‘financial intermediaries’’ 2 and
maintain a copy of the written
information sharing agreement with
each intermediary in an easily
accessible place for six years. Third,
pursuant to the information sharing
agreements, funds must have systems
that enable them to request frequent
trading information upon demand from
their intermediaries, and to enforce any
restrictions on trading required by funds
under the rule.
The collections of information created
by rule 22c–2 are necessary for funds to
effectively assess redemption fees,
enforce their policies in frequent
trading, and monitor short-term trading,
including market timing, in omnibus
accounts. These collections of
information are mandatory for funds
that redeem shares within seven days of
purchase. The collections of information
also are necessary to allow Commission
staff to fulfill its examination and
oversight responsibilities.
Rule 22c–2(a)(1) requires the board of
directors of all registered open-end
management investment companies and
series thereof (except for money market
funds, ETFs, or funds that affirmatively
permit short-term trading of its
securities) to approve a redemption fee
for the fund, or instead make a
determination that a redemption fee is
1 44
U.S.C. 3501–3520.
rule defines a Financial Intermediary as: (i)
Any broker, dealer, bank, or other person that holds
securities issued by the fund in nominee name; (ii)
a unit investment trust or fund that invests in the
fund in reliance on section 12(d)(i)(E) of the Act;
and (iii) in the case of a participant directed
employee benefit plan that owns the securities
issued by the fund, a retirement plan’s
administrator under section 316(A) of the Employee
Retirement Security Act of 1974 (29 U.S.C.
1002(16)(A) or any person that maintains the plans’
participant records; Financial Intermediary does not
include any person that the fund treats as an
individual investor with respect to the fund’s
policies established for the purpose of eliminating
or reducing any dilution of the value of the
outstanding securities issued by the fund; Rule 22c–
2(c)(1).
2 The
E:\FR\FM\28JNN1.SGM
28JNN1
]]>Agencies
[Federal Register Volume 89, Number 125 (Friday, June 28, 2024)]
[Notices]
[Pages 54096-54099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14216]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100414; File No. SR-CboeEDGX-2024-027]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Rules Relating to the Continuing Education for Registered
Persons as Provided Under Exchange Rule 2.16.01
June 24, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 12, 2024, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') 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 Exchange. The Exchange
filed the proposal as a ``non-controversial'' proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe EDGX, Inc. (the ``Exchange'' or ``EDGX'') proposes to amend
its rules relating to the Continuing Education for Registered Persons
as provided under Exchange Rule 2.16.01. 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/edgx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set
[[Page 54097]]
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 proposed rule change amends Exchange Rule 2.16.01 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 content.
In 2021, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') implemented rule changes, which amended FINRA's Continuing
Education (``CE'') Program requirements to, among other things, provide
eligible individuals who terminate any of their representative or
principal registration categories the option of maintaining their
qualification for any terminated registration categories by completing
annual CE through a new program, the MQP.\5\ Under FINRA Rule 1240.01,
the MQP designated a look-back provision that, subject to specified
conditions, extended the option to participate in the MQP to
individuals who: (1) were registered as a representative or principal
within two years immediately prior to March 15, 2022 (the
implementation date of the MQP); and (2) individuals who were
participating in the Financial Services Affiliate Waiver Program
(``FSAWP'') \6\ 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'').
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\5\ See Securities Exchange Act Release No. 93097 (September 21,
2021), 86 FR 53358 (September 27, 2021) (Order Approving File No.
SR-FINRA-2021-015). Other exchanges, including EDGX, subsequently
filed copycat rule filings to align their continuing education rules
with those of FINRA. See Securities Exchange Act Release No. 94527
(March 28, 2022), 87 FR 18825 (March 31, 2022), (SR-CboeEDGX-2022-
017).
\6\ 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.
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In 2023, FINRA amended FINRA Rule 1240.01, to provide Look-Back
Individuals a second opportunity to elect to participate in the MQP
(the ``FINRA Second Enrollment Period'').\7\ The proposed rule change
required that Look-Back Individuals who elect to participate in the MQP
during the FINRA Second Enrollment Period complete any prescribed 2022
and 2023 MQP content by March 31, 2024. 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.
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\7\ See Securities Exchange Act Release No. 97184 (March 22,
2023), 88 FR 18359 (March 28, 2023) (SR-FINRA-2023-005).
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In response to FINRA's rule changes and to facilitate compliance
with the Exchange's CE Program requirements by members of multiple
exchanges, the Exchange implemented rule changes to align with FINRA's
CE Program.\8\ Such rules, among other things, provide eligible
individuals who terminate any of their representative or principal
registrations the option of maintaining their qualification for any of
the terminated registrations by completing CE through the MQP. Further,
Exchange Rule 2.16.01 includes a look-back provision that, subject to
specified conditions, extends the option for maintaining qualifications
following a registration category termination to (i) individuals who
have been registered as a representative or principal within two years
immediately preceding March 15, 2022, and (ii) individuals who have
been participants of the FSAWP immediately preceding March 15, 2022
implementation (i.e., Look-Back Individuals). Exchange Rule 2.16.01
also provided Look-Back Individuals with a second enrollment period,
between October 19, 2023, and December 31, 2023 (the ``Exchange Second
Enrollment Period''). Exchange Rule 2.16.01 requires that Look-Back
Individuals who elect to participate in the MQP during the Exchange
Second Enrollment Period complete any prescribed 2022 and 2023 MQP
content by March 31, 2024.\9\
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\8\ See Rules 2.16(c), 2.16.01, and 2.16.02.
\9\ 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 October 19, 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.
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FINRA recently submitted a proposal related to its CE Program (the
``FINRA Rule Change'').\10\ The proposal set forth changes to FINRA
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.\11\ In addition, the proposed
rule change provides 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.
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\10\ See Securities Exchange Act Release No. 100067 (May 6,
2024), 89 FR 40520 (May 10, 2024) (SR-FINRA-2024-006).
\11\ This would include any Look-Back Individuals who were still
in the process of completing their prescribed CE content as of March
31, 2024.
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In the FINRA Rule Change, FINRA noted that FINRA sent multiple
reminders, including a March 16, 2024 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. In the FINRA Rule
Change, FINRA further noted that in the week leading up to the
deadline, FINRA noticed that several thousand of those individuals were
renewing their participation in the MQP for 2024 instead of completing
their prescribed CE.\12\ Per the FINRA Rule Change, 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.\13\
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\12\ 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.
\13\ According to FINRA, 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.
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For similar reasons and to facilitate compliance with the
Exchange's CE Program requirements by members of multiple exchanges,
the Exchange is
[[Page 54098]]
also proposing to amend its rules (i.e., Exchange Rule 2.16.01) 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 the
effective date of this filing, and July 1, 2024, to be eligible to
continue their participation in the MQP.\14\ In addition, the proposed
rule change provides that any such individuals who will have completed
their prescribed 2022 and 2023 CE content between March 31, 2024, and
the effective date of this filing, will be deemed to have completed
such content by July 1, 2024, for purposes of the rule.
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\14\ This would include any Look-Back Individuals who were still
in the process of completing their prescribed CE content as of March
31, 2024.
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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.\15\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \16\ 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) \17\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
\17\ Id.
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The Exchange 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. As FINRA noted in the
FINRA Rule Change, 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. The Exchange believes that participation in the MQP
reduces unnecessary impediments to requalification for these
individuals without diminishing investor protection. In addition, the
proposed rule change is consistent with other goals, such as the
promotion of diversity and inclusion in the securities industry by
attracting and retaining a broader and diverse group of professionals.
The MQP also allows the industry to retain expertise from skilled
individuals, providing investors with the advantage of greater
experience among the individuals working in the industry. The Exchange
believes that reopening the CE completion period, as proposed, will
further these goals and objectives.
Further, the Exchange believes the proposed amendments reduce the
possibility of a regulatory gap between Exchange and FINRA rules,
providing more uniform standards across the securities industry. The
Exchange believes that the proposed rule change will bring consistency
and uniformity with FINRA's recently amended CE Program, which will, in
turn, assist members and their associated persons in complying with
these rules and improve regulatory efficiency. The proposed rule
changes make ministerial changes to the Exchange's CE rules to align
them with the CE rules of FINRA, in order to prevent unnecessary
regulatory burdens and to promote efficient administration of the
rules.
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 changes which are, in all material respects, based
upon and substantially similar to, recent rule changes 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
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \18\ and Rule 19b-
4(f)(6) thereunder.\19\
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\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 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) \20\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\21\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. The Exchange, like FINRA,
requests that the proposed rule change become operative as quickly as
possible so FINRA, on behalf of the Exchange, 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.\22\
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\20\ 17 CFR 240.19b-4(f)(6).
\21\ 17 CFR 240.19b-4(f)(6)(iii).
\22\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule'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
[[Page 54099]]
it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \23\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\23\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-CboeEDGX-2024-027 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-CboeEDGX-2024-027. 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 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-CboeEDGX-2024-027
and should be submitted on or before July 19, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-14216 Filed 6-27-24; 8:45 am]
BILLING CODE 8011-01-P
