Notice2024-13831
Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Interpretations and Policies .07 Under NYSE Chicago Article 6, Rule 11
Primary source
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Published
June 25, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 122 (Tuesday, June 25, 2024)</title>
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[Federal Register Volume 89, Number 122 (Tuesday, June 25, 2024)]
[Notices]
[Pages 53151-53153]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-13831]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100380; File No. SR-NYSECHX-2024-23]
Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Interpretations and Policies .07 Under NYSE Chicago Article 6, Rule 11
June 18, 2024.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on June 6, 2024, the NYSE Chicago, Inc. (``NYSE Chicago'' 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
The Exchange proposes to amend Interpretations and Policies .07
under NYSE Chicago Article 6, Rule 11 to harmonize with recent changes
to Financial Industry Regulatory Authority, Inc. (``FINRA'') Rule
1240.01 reopening the period by which certain participants in the
Maintaining Qualifications Program can complete their 2022 and 2023
continuing education content. The proposed rule change is available on
the Exchange's website at <a href="http://www.nyse.com">www.nyse.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 those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Interpretations and Policies .07
under NYSE Chicago Article 6, Rule 11 (Eligibility of Other Persons to
Participate in the Continuing Education Program Specified in Section
(c) of this Rule) to harmonize with recent changes to FINRA Rule
1240.01 (Eligibility of Other Persons to Participate in the Continuing
Education Program Specified in Paragraph (c) of this Rule) reopening
the period by which certain participants in the Maintaining
Qualifications Program (``MQP'') can complete their 2022 and 2023
continuing education (``CE'') content. This proposed rule change would
harmonize the Exchange's CE rules with those of FINRA and thus promote
uniform CE standards across the securities industry.\4\
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\4\ See Securities Exchange Act Release No. 100067 (May 6,
2024), 89 FR 40520 (May 10, 2024) (SR-FINRA-2024-006) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to
Amend FINRA Rule 1240.01 To Reopen the Period by Which Certain
Participants in the Maintaining Qualifications Program May Complete
Their Prescribed Continuing Education Content) (``Release No.
100067'').
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Background
The continuing education program for registered persons of broker-
dealers (``CE Program'') set forth in Article 6, Rule 11 \5\ requires
registered persons to complete CE consisting of a Regulatory Element
and a Firm Element. The Regulatory Element, administered by FINRA on
behalf of the Exchange, focuses on regulatory requirements and industry
standards, while the Firm Element is provided by each firm and focuses
on securities products, services and strategies the firm offers, firm
policies and industry trends.
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\5\ See also Interpretations and Policies .06 to Article 6, Rule
13 (All Registered Representatives and Principals Must Satisfy the
Regulatory Element of Continuing Education).
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In 2022, the Exchange amended NYSE Chicago Article 6, Rule 11
(Continuing Education for Registered Persons) and Rule 13 (Registration
Requirements) to, among other things, provide eligible individuals
terminating any of their representative or principal registration
categories the option of maintaining their qualification for any
terminated registration categories by completing annual CE through a
new program known as the MQP.\6\ The MQP under
[[Page 53152]]
Article 6, Rule 11, Interpretations and Policies .07 contains a look-
back provision that, subject to specified conditions, extends the
option to participate in the MQP to individuals who: (1) were
registered as a representative or principal within two years
immediately prior to May 25, 2022 (i.e., the MQP implementation date);
and (2) individuals who were participating in the Financial Services
Affiliate Waiver Program (``FSAWP'') under NYSE Chicago Rule 13,
Interpretations and Policies .08 (Waiver of Examinations for
Individuals Working for a Financial Services Industry Affiliate of a
Participant) immediately prior to May 25, 2022 (collectively, the
``Look-Back Individuals'').\7\
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\6\ See Securities Exchange Act Release No. 95063 (June 7,
2022), 87 FR 35826 (June 13, 2022) (SR-NYSECHX-2022-11) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change for
Amendments to the Exchange's Rules Regarding Continuing Education
Requirements).
\7\ The FSAWP is a waiver program for eligible individuals who
have left a Participant to work for a foreign or domestic financial
services affiliate of a member firm. The Exchange stopped accepting
new participants for the FSAWP beginning on May 25, 2022; however,
individuals who were already participating in the FSAWP pior to that
date had the option of continuing in the FSAWP.
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Given that many eligible individuals were unable to participate in
the MQP because they failed, for various reasons, to make an election
before March 15, 2022, the Exchange provided Look-Back Individuals a
second opportunity to elect to participate in the MQP to maintain their
qualification in 2023.\8\ Specifically, Article 6, Rule 11,
Interpretations and Policies .07, was amended to provide eligible
persons who elected to participate in the CE Program between June 5,
2023, and December 31, 2023 until March 31, 2024 to complete any
prescribed 2022 and 2023 CE. The Exchange's filing was based on FINRA's
earlier amendment to Rule 1240.01.\9\
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\8\ See Securities Exchange Act Release No. 97744 (June 16,
2023), 88 FR 41173 (June 23, 2023) (SR-NYSECHX-2023-13) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change for
Amendments to the Exchange's Rules Regarding Continuing Education
Requirements).
\9\ See id. See also Securities Exchange Act Release No. 97184
(March 22, 2023), 88 FR 18359 (March 28, 2023) (SR-FINRA-2023-005)
(Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change To Amend FINRA Rule 1240.01 To Provide Eligible Individuals
Another Opportunity To Elect To Participate in the Maintaining
Qualifications Program). Like FINRA, the Exchange determined to
treat the individuals who enrolled during the first period (between
January 31, 2022, and March 15, 2022) the same as those who enrolled
during the second period (between March 15, 2023, and December 31,
2023) for purposes of the March 31, 2024, deadline for completion of
prescribed 2022 and 2023 CE content because those who had enrolled
in the MQP during the first period satisfied all of the eligibility
criteria for enrollment during the second period and would have been
able to complete their prescribed CE content by March 31, 2024, had
they chosen to enroll during the second period instead of enrolling
during the first period.
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Recently, FINRA again amended its Rule 1240.01 to provide eligible
individuals enrolled in the MQP in both 2022 and 2023 who did not
complete their prescribed 2022 and 2023 CE content as of March 31,
2024, the opportunity to complete such content between May 22, 2024,
and July 1, 2024, to be eligible to continue their participation in the
MQP.\10\ FINRA also amended its rule to provide that any such
individuals who will have completed their prescribed 2022 and 2023 CE
content between March 31, 2024, and May 22, 2024 will be deemed to have
completed such content by July 1, 2024, for purposes of the rule.\11\
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\10\ See Release No. 100067, 89 FR at 40520.
\11\ See id.
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In its filing, FINRA represented that during the process of
reaching out to Look-Back Individuals who had enrolled in the MQP but
not completed their prescribed CE to remind them of the March 31, 2024
deadline, it noticed that several thousand of those individuals were
renewing their participation in the MQP for 2024 instead of completing
their prescribed CE.\12\ FINRA believes that some of those individuals
may have been confused by the layout of the FINRA Financial
Professional Gateway accounts and may have inadvertently assumed that
completion of the renewal process alone would have satisfied all of the
necessary requirements to continue their participation in the MQP.\13\
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\12\ See id. at 40521.
\13\ See id.
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Proposed Rule Change
Article 6, Rule 11, Interpretations and Policies .07, provides that
eligible persons who elect to participate in the CE Program between
June 5, 2023 and December 31, 2023 must complete any prescribed 2022
and 2023 CE content by March 31, 2024. The Exchange proposes to delete
this language as obsolete.
In addition, in order to harmonize with FINRA and avoid any
potential regulatory gaps, the Exchange proposes to add the following
text (italicized) to Article 6, Rule 11, Interpretations and Policies
.07:
Individuals enrolled in the continuing education program under
this Interpretations and Policies .07 in both 2022 and 2023 who did
not complete their prescribed 2022 and 2023 continuing education
content as of March 31, 2024, shall be able to complete such content
between [the effective date of filing], and July 1, 2024, to be
eligible to continue their participation in the continuing education
program. In addition, any such individuals who will have completed
their prescribed 2022 and 2023 continuing education content between
March 31, 2024, and [the effective date of filing], shall be deemed
to have completed such content by July 1, 2024, for purposes of this
Interpretations and Policies .07.
The proposed text is substantially similar to the language adopted
by FINRA in its Rule 1240.01.\14\
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\14\ See Release No. 100067, 89 FR at 40520.
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As discussed below, the Exchange believes that the proposed rule
change is eligible for immediate effectiveness and has requested that
the Commission waive the requirement that the proposed rule change not
become operative for 30 days after the date of the filing.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\15\ in general, and furthers the objectives of Section
6(b)(5),\16\ in particular, because it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, to
remove impediments to, and perfect the mechanism of, a free and open
market and a national market system and, in general, to protect
investors and the public interest. Additionally, the Exchange believes
the proposed rule change is designed to provide a fair procedure for
the disciplining of members and persons associated with members,
consistent with Sections 6(b)(7) and 6(d) of the Act.\17\
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
\17\ 15 U.S.C. 78f(b)(7) & 78f(d).
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The Exchange believes that the proposed rule changes support the
objectives of the Act by harmonizing Exchange rules modeled on FINRA's
rules, resulting in less burdensome and more efficient regulatory
compliance. The proposed rule change would provide Look-Back
Individuals another opportunity to complete their prescribed 2022 and
2023 CE content in order to remain eligible to continue their
participation in the MQP, thereby promoting efficiency because
participation in the MQP would reduce unnecessary impediments to
requalification for these individuals without diminishing investor
protection. In addition, the Exchange agrees with FINRA that the
proposed rule change is consistent with other goals, such as the
promotion of diversity and inclusion in the securities industry, by
attracting and retaining a broader and
[[Page 53153]]
diverse group of professionals.\18\ The MQP also allows the industry to
retain expertise from skilled individuals, providing investors with the
advantage of greater experience among the individuals working in the
industry. The Exchange believes that reopening the CE completion
period, as proposed, and providing Look-Back Individuals another
opportunity to elect to participate in the MQP will further these goals
and objectives.
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\18\ See Release No. 100067, 89 FR at 40521.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change, which harmonizes its rules with the recent
rule change adopted by FINRA, will reduce the regulatory burden placed
on market participants engaged in trading activities across different
markets. The Exchange believes that the harmonization of the CE program
requirements across the various markets will reduce burdens on
competition by removing impediments to participation in the national
market system and promoting competition among participants across the
multiple national securities exchanges.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \19\ and Rule 19b-
4(f)(6) thereunder.\20\
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\19\ 15 U.S.C. 78s(b)(3)(A).
\20\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \21\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\22\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. NYSE Chicago, like FINRA,
requests that the proposed rule change become operative as quickly as
possible so NYSE Chicago can communicate the rule change to impacted
individuals in a timely manner. Waiver of the operative delay would
allow the Exchange to implement the proposed changes to its CE rules
without delay, thereby eliminating the possibility of a significant
regulatory gap between the FINRA and the Exchange rules, providing more
uniform standards across the securities industry, and helping to avoid
confusion for Exchange members that are also FINRA members. For these
reasons, the Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest. Therefore, the Commission hereby waives the operative delay
and designates the proposal operative upon filing.\23\
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\21\ 17 CFR 240.19b-4(f)(6).
\22\ 17 CFR 240.19b-4(f)(6)(iii).
\23\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \24\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\24\ 15 U.S.C. 78s(b)(2)(B).
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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#5f2d2a333a723c3032323a312b2c1f2c3a3c71383029"><span class="__cf_email__" data-cfemail="87f5f2ebe2aae4e8eaeae2e9f3f4c7f4e2e4a9e0e8f1">[email protected]</span></a>. Please include
file number SR-NYSECHX-2024-23 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-NYSECHX-2024-23. 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-NYSECHX-2024-23 and
should be submitted on or before July 16, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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\25\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-13831 Filed 6-24-24; 8:45 am]
BILLING CODE 8011-01-P
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