Notice2024-12591
Self-Regulatory Organizations: Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX Rule 2.160(p) To Reopen the Period by Which Certain Participants in the Maintaining Qualifications Program Will Be Able To Complete Their Prescribed 2022 and 2023 Continuing Education Content
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Published
June 10, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 112 (Monday, June 10, 2024)</title>
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[Federal Register Volume 89, Number 112 (Monday, June 10, 2024)]
[Notices]
[Pages 48922-48925]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-12591]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100265; File No. SR-IEX-2024-10]
Self-Regulatory Organizations: Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX
Rule 2.160(p) To Reopen the Period by Which Certain Participants in the
Maintaining Qualifications Program Will Be Able To Complete Their
Prescribed 2022 and 2023 Continuing Education Content
June 4, 2024.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on May 22, 2024, the Investors Exchange LLC (``IEX'' 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.
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\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
Pursuant to the provisions of Section 19(b)(1) under the Act,\4\
and Rule 19b-4 thereunder,\5\ the Exchange is filing with the
Commission a proposed rule change to amend IEX Rule 2.160(p) to reopen
the period by which certain participants in the Maintaining
Qualifications Program will be able to complete their prescribed 2022
and 2023 continuing education content. The Exchange has designated this
proposal as non-controversial pursuant to Section 19(b)(3)(A)(iii) of
the Act \6\ and provided the Commission with the notice required by
Rule 19b-4(f)(6)(iii) thereunder.\7\
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\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6)(iii).
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The text of the proposed rule change is available at the Exchange's
website at <a href="http://www.iextrading.com">www.iextrading.com</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 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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
IEX is proposing to amend Supplementary Material .01 to IEX Rule
2.160(p)(c) 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.
This proposed rule change is based on a substantively similar filing
made by the Financial Industry Regulatory Authority, Inc. (``FINRA''),
which amended FINRA's equivalent rule,
[[Page 48923]]
FINRA Rule 1240.01, to reopen the period by which certain participants
in the MQP will be able to complete their prescribed 2022 and 2023
CE.\8\
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\8\ See Securities Exchange Act Release No. 100067 (May 6, 2024)
89 FR 40520 (May 10, 2024) (SR-FINRA-2023-005) (``FINRA MQP
Extension Filing'').
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FINRA Rule 1240.01, as described in Supplementary Material .01 to
IEX Rule 2.160(p)(c), 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'') \9\ pursuant to Supplementary Material .01 to Rule 2.160(g)
immediately prior to March 15, 2022 (collectively, ``Look-Back
Individuals'').\10\ FINRA Rule 1240.01 provided two open enrollment
periods for Look-Back Individuals to participate in the MQP
(Supplementary Material .01 to IEX Rule 2.160(p)(c) provided one open
enrollment period for Look-Back Individuals).\11\ FINRA and IEX
provided all Look-Back Individuals who had enrolled in the MQP until
March 31, 2024, to complete any prescribed 2022 and 2023 CE
content.\12\ 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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\9\ 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.
\10\ Supplementary Material .01 to IEX Rule 2.160(p)(c) refers
to FINRA's initial enrollment period for ``Look-Back Individuals''
who were registered in a representative or principal registration
category with FINRA within two years immediately preceding March 15,
2022, but that initial enrollment period was not part of IEX's rule.
\11\ In March 2023, FINRA amended Rule 1240.01 to provide Look-
Back Individuals with a second opportunity to participate in the MQP
for eligible persons who elected to participate between March 15,
2023 and December 31, 2023. See Securities Exchange Act Release No.
97184 (March 22, 2023), 88 FR 18359 (March 28, 2023) (SR-FINRA-2023-
005). In July 2023, IEX amended Supplementary Material .01 to IEX
Rule 2.160(p)(c) to also offer a new enrollment period for eligible
persons who elected to participate between July 13, 2023 and
December 31, 2023. See Securities Exchange Act Release No. 97980
(July 25, 2023) 88 FR 49542 (July 31, 2023) (SR-IEX-2023-07).
\12\ FINRA determined to treat the individuals who enrolled
during the first period (between January 31, 2022, and March 15,
2022) the same as those who enrolled during the second period
(between March 15, 2023, and December 31, 2023) for purposes of the
March 31, 2024, deadline for completion of prescribed 2022 and 2023
CE content. This is because those who had enrolled in the MQP during
the first period satisfied all of the eligibility criteria for
enrollment during the second period and would have been able to
complete their prescribed CE content by March 31, 2024, had they
chosen to enroll during the second period instead of enrolling
during the first period.
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On March 16, 2024, FINRA on its own behalf and on behalf of IEX,
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.\13\ In the week leading up to the deadline, however,
FINRA noticed that several thousand of those individuals were renewing
their participation in the MQP for 2024 instead of completing their
prescribed CE.\14\ FINRA believes that some of those individuals may
have been confused by the layout of their FinPro accounts.\15\
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.\16\
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\13\ As noted in the FINRA MQP Extension Filing, 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.
\14\ 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.
\15\ See supra note 8.
\16\ 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, FINRA amended Rule 1240.01 to reopen the period
by which certain participants in the MQP will be able to complete their
prescribed 2022 and 2023 CE.\17\ IEX now proposes to amend
Supplementary Material .01 to IEX Rule 2.160(p)(c) to implement the
reopening of the MQP completion period close in time with FINRA.
Specifically, IEX is proposing 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
filing, and July 1, 2024, to be eligible to continue their
participation in the MQP. IEX 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 the
effective date of filing, will be deemed to have completed such content
by July 1, 2024, for purposes of the rule.
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\17\ In the FINRA MQP Extension Filing, FINRA described its
plans to reach out to all impacted individuals and inform them of
the new CE completion period. Additionally, FINRA 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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IEX has filed the proposed rule change for immediate effectiveness
and has requested that the Commission waive the 30-day operative delay.
The operative date will be the date of the filing of the proposed rule
change if the Commission grants the waiver.
2. Statutory Basis
The Exchange believes that its proposal is consistent with the
requirements of Sections 6(b) \18\ and 6(b)(5) of the Act,\19\ 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. IEX, like FINRA, believes
that reopening the period by which Look-Back Individuals will be able
to complete their prescribed 2022 and 2023 CE content is appropriate
under the circumstances. IEX, like FINRA, believes that Look-Back
Individuals who had enrolled in the MQP in 2022 and 2023 but had not
completed their prescribed 2022 and 2023 CE content by the March 31,
2024, deadline may have been confused, as described above. IEX, like
FINRA, continues to believe that participation in the MQP reduces
unnecessary impediments to requalification without diminishing investor
protection.\20\ 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
[[Page 48924]]
the advantage of greater experience among the individuals working in
the industry. IEX, like FINRA, believes that reopening the CE
completion period, as proposed, will further these goals and
objectives.
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\18\ 15 U.S.C. 78f(b).
\19\ 15 U.S.C. 78f(b)(5).
\20\ 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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The Exchange believes the proposed rule change is consistent with
the provisions of Section 6(b)(5) of the Act,\21\ which requires, among
other things, that Exchange Rules must be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, and, in general, to protect investors
and the public interest, and Section 6(c)(3) of the Act,\22\ which
authorizes the Exchange to prescribe standards of training, experience
and competence for persons associated with Exchange.
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\21\ 15 U.S.C. 78f(b)(5).
\22\ 15 U.S.C. 78f(c)(3).
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Finally, as described in the Purpose section, the proposed rule
change seeks to align the Exchange Rules with changes to FINRA rules
which have been allowed to take effect by the Commission.\23\ Thus,
this rule change raises no novel issues that have not already been
considered by and accepted by the Commission.
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\23\ See supra note 8.
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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 rule changes
adopted by FINRA, will reduce the regulatory burden placed on market
participants engaged in trading activities across different markets.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \24\ and Rule 19b-
4(f)(6) thereunder.\25\
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\24\ 15 U.S.C. 78s(b)(3)(A).
\25\ 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.
IEX has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \26\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\27\ 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. IEX, like FINRA, requests
that the proposed rule change become operative as quickly as possible
so that FINRA, on behalf of IEX, can communicate the rule change to
impacted individuals in a timely manner. Waiver of the 30-day operative
delay would also allow the Exchange to implement the reopening of the
MQP completion period in time with FINRA, thereby substantially
eliminating the existence of a regulatory gap between the FINRA and
Exchange rules, providing more uniform standards across the securities
industry, and helping to provide clarity and avoid ongoing confusion
for Exchange Members \28\ 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.\29\
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\26\ 17 CFR 240.19b-4(f)(6).
\27\ 17 CFR 240.19b-4(f)(6)(iii).
\28\ See IEX Rule 1.160(s).
\29\ 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) \30\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\30\ 15 U.S.C. 78s(b)(2)(B).
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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#7200071e175f111d1f1f171c0601320117115c151d04"><span class="__cf_email__" data-cfemail="c5b7b0a9a0e8a6aaa8a8a0abb1b685b6a0a6eba2aab3">[email protected]</span></a>. Please include
file number SR-IEX-2024-10 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-IEX-2024-10. 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
10:00 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-IEX-2024-10 and
should be submitted on or before July 1, 2024.
[[Page 48925]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
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\31\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-12591 Filed 6-7-24; 8:45 am]
BILLING CODE 8011-01-P
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