Notice2024-12364
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend General 4, Rule 1240.01 (Eligibility of Other Persons To Participate in the Continuing Education Program Specified in Paragraph (c) of This Rule)
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
June 6, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 110 (Thursday, June 6, 2024)</title>
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[Federal Register Volume 89, Number 110 (Thursday, June 6, 2024)]
[Notices]
[Pages 48451-48453]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-12364]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100255; File No. SR-NASDAQ-2024-023]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend General 4, Rule 1240.01 (Eligibility of Other Persons To
Participate in the Continuing Education Program Specified in Paragraph
(c) of This Rule)
May 31, 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 May 20, 2024, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to General 4, Rule 1240.01 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 (``CE'') content.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rules">https://listingcenter.nasdaq.com/rulebook/nasdaq/rules</a>, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the 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 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 General 4, Rule 1240.01 to reopen
the period by which certain participants in MQP will be able to
complete their prescribed 2022 and 2023 CE content. This proposal is
based on a rule change recently submitted by the Financial Industry
Regulatory Authority, Inc. (``FINRA''), and is intended to align the
Exchange's continuing education rules with those of FINRA so as to
promote uniform standards across the securities industry.\3\ The
Exchange is proposing to adopt such changes substantially in the same
form as proposed by FINRA.
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\3\ See Securities Exchange Act Release No. 100067 (May 6, 2024)
(SR-FINRA-2024-006) (``FINRA Rule Change'').
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General 4, Rule 1240.01 extended the option to participate in the
MQP to individuals who: (1) were registered as a representative or
principal within two years immediately prior to March 15, 2022 (the
implementation date of the MQP); and (2) individuals who were
participating in the Financial Services Affiliate Waiver Program
(``FSAWP'') under General 4, Rule 1210.09 (Waiver of Examinations for
Individuals Working for a Financial Services Industry Affiliate of a
Member) immediately prior to March 15, 2022 (collectively, ``Look-Back
Individuals'').\4\ The rule provided two open enrollment periods for
Look-Back Individuals to participate in the MQP.\5\ The Exchange
provided all Look-Back Individuals who had enrolled in the MQP until
March 31, 2024, to complete any prescribed 2022 and 2023 CE content.\6\
Look-Back Individuals who are enrolled in the MQP, similar to other MQP
participants, are able to complete any prescribed CE and renew their
annual MQP participation through their FINRA Financial Professional
Gateway (``FinPro'') accounts.
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\4\ The FSAWP is a waiver program for eligible individuals who
have left a member firm to work for a foreign or domestic financial
services affiliate of a member firm. The Exchange stopped accepting
new participants for the FSAWP beginning on March 15, 2022; however,
individuals who were already participating in the FSAWP prior to
that date had the option of continuing in the FSAWP.
\5\ In July 2023, the Exchange amended General 4, Rule 1240.01
to provide Look-Back Individuals with a second opportunity to
participate in the MQP. See Securities Exchange Act Release No.
97939 (July 18, 2023), 88 FR 47533 (July 24, 2023) (SR-NASDAQ-2023-
020).
\6\ 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 July 6, 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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In the FINRA Rule Change, FINRA noted that on March 16, 2024, it
sent an email to Look-Back Individuals who had enrolled in the MQP but
had not completed their prescribed CE to remind them of the March 31,
2024 deadline.\7\ In the week leading up to the
[[Page 48452]]
deadline, however, FINRA noticed that several thousand of those
individuals were renewing their participation in the MQP for 2024
instead of completing their prescribed CE.\8\ As stated in the FINRA
Rule Change, FINRA believed that some of those individuals may have
been confused by the layout of their FinPro accounts. Specifically, if
they selected the 2024 renewal banner, which was prominently displayed
on their FinPro accounts, and completed the renewal process, they would
not have been automatically redirected to complete any prescribed CE.
Therefore, individuals may have inadvertently assumed that completion
of the renewal process alone would have satisfied all of the necessary
requirements to continue their participation in the MQP.\9\
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\7\ According to the FINRA Rule Change, FINRA had sent multiple
reminders prior to March 16, 2024, but the March 16, 2024 email was
the last reminder that was sent prior to the March 31, 2024 deadline
for completion of any prescribed 2022 and 2023 CE content.
\8\ Look-Back Individuals who enrolled in the MQP have until
December 31, 2024 to renew their participation in the MQP for 2024,
provided that they complete their prescribed CE by the stated
deadline.
\9\ 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 these reasons, the Exchange is proposing to amend General 4,
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 in order to be eligible
to continue their participation in the MQP.\10\ The Exchange is also
proposing to amend the rule to provide that any such individuals who
will have completed their prescribed 2022 and 2023 CE content between
March 31, 2024 and May 22, 2024 will be deemed to have completed such
content by July 1, 2024 for purposes of the rule. As stated in the
FINRA Rule Change, FINRA plans to reach out to all impacted individuals
and inform them of the new CE completion period. The Exchange will
likewise inform all members of the new CE completion period through a
publicly disseminated regulatory alert.\11\ Furthermore, FINRA states
that it has made changes, and is also considering future changes, to
the layout of FinPro to more effectively communicate the necessary
steps that individuals must take to satisfy their MQP obligations.
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\10\ This would include any Look-Back Individuals who were still
in the process of completing their prescribed CE content as of March
31, 2024.
\11\ Nasdaq BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq
MRX, LLC, and Nasdaq PHLX LLC (i.e., the Nasdaq Affiliated
Exchanges) incorporate Nasdaq Supplementary Material .01 to General
4, Rule 1240 into their respective rulebooks by reference. As such,
the regulatory alert will be sent to all members of the Nasdaq
Affiliated Exchanges.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\13\ in particular, in that it is designed to
promote just and equitable principles of trade, 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. 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. The
Exchange believes that Look-Back Individuals who had enrolled in the
MQP in 2022 and 2023 but had not completed their prescribed 2022 and
2023 CE content by the March 31, 2024, deadline may have been confused,
as described above. The Exchange continues to believe that
participation in the MQP reduces unnecessary impediments to
requalification without diminishing investor protection.\14\ In
addition, the MQP promotes other goals, such as diversity and inclusion
in the securities industry by attracting and retaining a broader and
diverse group of professionals. The MQP also allows the industry to
retain expertise from skilled individuals, providing investors with the
advantage of greater experience among the individuals working in the
industry. The Exchange believes that reopening the CE completion
period, as proposed, will further these goals and objectives.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ The FINRA Rule Change states that as of April 15, 2024,
approximately 31,000 individuals, including approximately 20,000
Look-Back Individuals, have enrolled in the MQP, of which
approximately 1,400 individuals have used the MQP to return to the
industry without having to go through requalification.
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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 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 filed 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 MQP
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 either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 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.
Nasdaq has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \17\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\18\ 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. As outlined above, Nasdaq
states that it plans to reach out to relevant individuals and inform
them of the new CE completion period established by this rule change.
The Exchange has indicated that the immediate operation of the proposed
rule change is appropriate so that the Exchange can communicate the
rule
[[Page 48453]]
change to impacted individuals promptly. Waiver of the 30-day operative
delay will also allow the Exchange to implement the proposed changes
without delay, thereby eliminating the material differences between
FINRA and Exchange continuing education requirements applicable to
Exchange members, providing more uniform standards across the
securities industry, and helping to avoid ongoing 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.\19\
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\17\ 17 CFR 240.19b-4(f)(6).
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ 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 to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#cab8bfa6afe7a9a5a7a7afa4beb98ab9afa9e4ada5bc"><span class="__cf_email__" data-cfemail="9ceee9f0f9b1fff3f1f1f9f2e8efdceff9ffb2fbf3ea">[email protected]</span></a>. Please include
file number SR-NASDAQ-2024-023 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-NASDAQ-2024-023. 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="https://www.sec.gov/rules/sro.shtml">https://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
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-NASDAQ-2024-023 and should
be submitted on or before June 27, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-12364 Filed 6-5-24; 8:45 am]
BILLING CODE 8011-01-P
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