Notice2021-19973
Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Provide a Further Extension of Time To Become Appropriately Qualified by Passing the Municipal Advisor Principal Qualification Examination (Series 54) Pursuant to MSRB Rule G-3, on Professional Qualification Requirements
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 16, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 86 Issue 177 (Thursday, September 16, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 177 (Thursday, September 16, 2021)]
[Notices]
[Pages 51696-51698]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-19973]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92938; File No. SR-MSRB-2021-05]
Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change To Provide a Further Extension of Time To Become Appropriately
Qualified by Passing the Municipal Advisor Principal Qualification
Examination (Series 54) Pursuant to MSRB Rule G-3, on Professional
Qualification Requirements
September 10, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on September 2, 2021 the Municipal Securities
Rulemaking Board (``MSRB'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the MSRB. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The MSRB filed with the Commission a proposed rule change to amend
Supplementary Material .09, Temporary Relief for Municipal Advisor
Principal, of MSRB Rule G-3, on professional qualification
requirements, to provide a further extension of time for those
individuals who meet the definition of a municipal advisor principal
\3\ to become appropriately qualified by passing the Municipal Advisor
Principal Qualification Examination (``Series 54 examination''). The
MSRB has designated the proposed rule change as constituting a
``noncontroversial'' rule
[[Page 51697]]
change under Section 19(b)(3)(A) \4\ of the Act and Rule 19b-4(f)(6)
\5\ thereunder, which renders the proposal effective upon receipt of
this filing by the Commission.
---------------------------------------------------------------------------
\3\ The term ``municipal advisor principal'' is defined in MSRB
Rule G-3(e)(i) to mean a natural person associated with a municipal
advisor who is qualified as a municipal advisor representative and
is directly engaged in the management, direction or supervision of
the municipal advisory activities of the municipal advisor and its
associated persons.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
The text of the proposed rule change is available on the MSRB's
website at <a href="http://www.msrb.org/Rules-and-Interpretations/SEC-Filings/2021-Filings.aspx">www.msrb.org/Rules-and-Interpretations/SEC-Filings/2021-Filings.aspx</a>, at the MSRB's principal office, 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 MSRB 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 MSRB 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
In April 2020, and again in December 2020, the MSRB filed proposed
rule changes for immediate effectiveness with the SEC that provided
regulatory relief on a temporary basis to municipal advisors and
dealers in response to the operational challenges and disruptions to
normal business functions as a result of the coronavirus disease
(``COVID-19'') pandemic (``April relief'' and ``December relief'').\6\
In connection with the MSRB's April relief, due to the uncertainty
regarding ongoing stay-at-home orders and social distance restrictions
that impacted capacity at Prometric testing centers,\7\ the MSRB
adopted Supplementary Material .09 of MSRB Rule G-3 to extend the date
by which individuals were required to become qualified with the Series
54 examination from November 12, 2020 to March 31, 2021. In its
December relief, due to the protracted nature of the pandemic, the MSRB
amended Supplementary Material .09 of MSRB Rule G-3 a second time to
extend the time period further from March 31, 2021 to November 12,
2021, for individuals to become qualified with the Series 54
examination.\8\
---------------------------------------------------------------------------
\6\ See Exchange Act Release No. 88694 (April 20, 2020), 85 FR
23088 (April 24, 2020) (File No. SR-MSRB-2020-01). See Exchange Act
Release No. 90621 (December 9, 2020), 85 FR 81254 (December 15,
2020) (File No. SR-MSRB-2020-09).
\7\ FINRA uses Prometric as its single vendor for the delivery
of professional qualification examinations, including MSRB-owned
professional qualification examinations.
\8\ The April and December relief extended the initial one-year
grace-period, previously set to expire on November 12, 2020, to
allow individuals functioning as municipal advisor principals to
continue to engage in the management, direction or supervision of
the municipal advisory activities of the municipal advisor and its
associated persons, so long as such persons are qualified with the
Municipal Advisor Representative Qualification Examination (``Series
50'').
---------------------------------------------------------------------------
The proposed amendment to Supplementary Material .09 of MSRB Rule
G-3 would further extend the time period from November 12, 2021 to
November 30, 2021, for individuals to become qualified with the Series
54 examination. This time extension is being proposed in connection
with the MSRB's efforts to facilitate the remote proctoring of the
Series 54 examination; and notably, the proposed extension of time
roughly coincides with the number of days taken to launch the Series 54
examination online.\9\ On August 11, 2021, the MSRB announced, given
the quickly approaching compliance date by which individuals have to
take and pass the Series 54 examination and in recognition of pandemic-
related challenges, the MSRB would provide an interim accommodation to
allow individuals to take the Series 54 examination online.
Specifically, the Series 54 examination was made available to take
online beginning on August 23, 2021 and will be available to take
online until November 30, 2021.\10\ The Financial Industry Regulatory
Authority (``FINRA''), as designated by the Commission, provides test
administration services to the MSRB for the delivery of MSRB-owned
professional qualification examinations and is facilitating the
delivery of the Series 54 examination online.\11\ The MSRB believes
that the extension of time is appropriate given the quick nature in
which the Series 54 examination was launched online, on account of
exigent circumstances, and that the extension affords individuals time
to engage in informed decision making regarding how to test. Relatedly,
permitting the remote proctoring of the Series 54 examination, on a
temporary basis, as well as ongoing in-person testing at Prometric
testing centers, will facilitate compliance with MSRB Rule G-3(e)(ii)
during the pandemic.
---------------------------------------------------------------------------
\9\ The launch of the Series 54 examination online took
approximately 12 days from the date the MSRB announced the exam
would be made available online. The MSRB is proposing to extend the
compliance date by 18 days taking into consideration the
Thanksgiving holiday.
\10\ See MSRB Notice 2021-10 (August 11, 2021), ``MSRB Provides
Interim Accommodation for Municipal Advisor Principal Qualification
Examination (Series 54 Exam),'' available at <a href="https://www.msrb.org/-/media/Files/Regulatory-Notices/Announcements/2021-10.ashx??n=1">https://www.msrb.org/-/media/Files/Regulatory-Notices/Announcements/2021-10.ashx??n=1</a>.
\11\ See, e.g., Exchange Act Release No. 75714 (August 17,
2015), 80 FR 50883 (August 21, 2015) (Designation of the Financial
Industry Regulatory Authority to Administer Professional
Qualification Tests for Associated Persons of Registered Municipal
Advisors). Individuals who wish to take the Series 54 examination
online must first complete ``FINRA Online Exam Administration
Request Form,'' available at <a href="https://www.finra.org/registration-exams-ce/qualification-exams/online-exam-administration">https://www.finra.org/registration-exams-ce/qualification-exams/online-exam-administration</a>.
---------------------------------------------------------------------------
The MSRB proposes this interim accommodation in recognition of the
approaching compliance date for municipal advisors to have at least one
person appropriately qualified as a municipal advisor principal; and
therefore, the accommodation is offered only with respect to the Series
54 examination.
2. Statutory Basis
Section 15B(b)(2)(A) of the Act \12\ authorizes the MSRB to
prescribe:
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78o-4(b)(2)(A).
. . . standards of training, experience, competence, and such other
qualifications as the Board finds necessary or appropriate in the
public interest or for the protection of investors and municipal
---------------------------------------------------------------------------
entities or obligated persons.
The MSRB believes that the proposed rule change is consistent with this
provision as those acting in the capacity of a municipal advisor
principal would still be subject to the regulatory requirements under
MSRB Rule G-3, including the requirement to be qualified with the
Series 50 examination, which is a prerequisite to taking and passing
the Series 54 examination in order to become qualified as a municipal
advisor principal. Accordingly, the proposed amendments do not relieve
municipal advisors from compliance with underlying obligations that
directly serve to protect investors, municipal entities, obligated
persons and the public interest. The extension of time will provide an
opportunity for individuals to review the information provided by the
MSRB on remote proctoring of exams; make an informed decision regarding
how to test; complete the relevant FINRA form, as necessary; and take
the exam in furtherance of MSRB Rule G-3, which was promulgated in
furtherance of the Exchange Act. The extension provides a reasonable
amount of time to facilitate remote proctoring and enhances compliance
by providing greater opportunities for individuals to take the Series
54 examination.
[[Page 51698]]
B. Self-Regulatory Organization's Statement on Burden on Competition
Section 15B(b)(2)(C) of the Act requires that MSRB rules be
designed not to impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.\13\ The MSRB
believes that the proposed rule change will not impose any burden on
competition not necessary or appropriate in furtherance of the Exchange
Act. The goal of the proposed rule change is to provide temporary
relief to grant additional time for municipal advisors to meet certain
obligations under MSRB rules during the exigent circumstances of the
COVID-19 pandemic but would not alter their underlying obligations
under MSRB rules. Not only does the proposed rule change not burden
competition, but as set forth below, it may result in a benefit to
competition.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78o-4(b)(2)(C).
---------------------------------------------------------------------------
Additionally, Section 15B(b)(2)(L)(iv) of the Exchange Act,
requires that MSRB rules not impose a regulatory burden on small
municipal advisors that is not necessary or appropriate in the public
interest and for the protection of investors, municipal entities, and
obligated persons, provided that there is robust protection of
investors against fraud.\14\ The MSRB believes that the proposed rule
change is consistent with Section 15B(b)(2)(L)(iv) of the Exchange Act
\15\ in that, while the proposed rule change to extend the date by
which individuals have to pass the Series 54 examination will affect
all municipal advisors, including small municipal advisors, there is no
new regulatory burden that results. Small municipal advisors typically
have fewer associated persons and, as a result, their resources may be
more limited during the pandemic and the benefits of the proposed rule
change may provide smaller municipal advisors a greater benefit given
their limited resources. In addition, the MSRB believes that extending
the compliance date by approximately 2\1/2\ weeks may serve to benefit
small municipal advisors by providing greater opportunity for
individuals to prepare for, take and pass the Series 54 examination and
for municipal advisors to meet their compliance obligation to have at
least one person properly qualified by passing the Series 54
examination by the compliance date.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78o-4(b)(2)(L)(iv).
\15\ Id.
---------------------------------------------------------------------------
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received 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 \16\ and Rule 19b-
4(f)(6) \17\ thereunder. 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.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#88fafde4eda5ebe7e5e5ede6fcfbc8fbedeba6efe7fe"><span class="__cf_email__" data-cfemail="a7d5d2cbc28ac4c8cacac2c9d3d4e7d4c2c489c0c8d1">[email protected]</span></a>. Please include
File Number SR-MSRB-2021-05 on the subject line.
Paper Comments
<bullet> 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-MSRB-2021-05. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 MSRB. All comments received
will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-MSRB-2021-05 and should be submitted on
or before October 7, 2021.
For the Commission, pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19973 Filed 9-15-21; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 16, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.