Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt FINRA Rule 1240.03 (Senior Leader Regulatory Element Interim Program) To Establish an Interim Program of Regulatory Element Continuing Education

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<title>Federal Register, Volume 91 Issue 213 (Thursday, November 5, 2026)</title>
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[Federal Register Volume 91, Number 213 (Thursday, November 5, 2026)]
[Notices]
[Pages 69897-69900]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22561]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106797; File No. SR-FINRA-2026-023]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Adopt FINRA Rule 1240.03 (Senior Leader 
Regulatory Element Interim Program) To Establish an Interim Program of 
Regulatory Element Continuing Education

November 2, 2026.
    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 October 29, 2026, the Financial Industry Regulatory Authority, Inc. 
(``FINRA'') 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 FINRA. FINRA has designated 
the proposed rule change as constituting a ``non-controversial'' rule 
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which 
renders the proposal effective upon receipt of this filing by the 
Commission. 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\ 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

    FINRA is proposing to adopt FINRA Rule 1240.03 (Senior Leader 
Regulatory Element Interim Program) and make a conforming amendment to 
FINRA Rule 1240(a)(6) (Delivery of the Regulatory Element) to establish 
an interim program of Regulatory Element Continuing Education (``CE'') 
that would be voluntary and provide member firms with the option for 
their senior leaders to complete continuing education.
    The text of the proposed rule change is available on FINRA's 
website at <a href="http://www.finra.org">http://www.finra.org</a> and at the principal office of FINRA.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FINRA 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. FINRA 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
    Pursuant to Rule 1240, registered persons of member firms are 
required to complete CE that consists of two mandatory programs, a 
Regulatory Element and a Firm Element. Regulatory Element CE, which is 
administered by FINRA, focuses on regulatory requirements and industry 
standards. Firm Element CE is provided by each member firm to its 
registered persons and focuses on the firm's securities products, 
services and strategies, its policies, and industry trends.
    FINRA has received a variety of suggestions from member firms and 
industry groups regarding changes to the Regulatory Element CE 
requirement for senior leaders (e.g., chief executive officer, chief 
financial officer). FINRA received similar suggestions regarding this 
topic in response to Regulatory Notice 25-07.\4\
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    \4\ See, e.g., letter from Bernard V. Canepa, Managing Director 
and Associate General Counsel & Alyssa Pompei, Vice President and 
Assistant General Counsel, Securities Industry and Financial Markets 
Association, to Jennifer Piorko Mitchell, Office of the Corporate 
Secretary, FINRA, dated July 14, 2025.
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    FINRA believes that Regulatory Element CE provides individuals with 
valuable training on recent developments in regulatory requirements and 
industry standards, and as such, CE is appropriate for all registered 
persons, including senior leaders. FINRA, however, recognizes that 
senior leaders at member firms may realize greater benefit from 
Regulatory Element CE training that draws from the annual Regulatory 
Element content but is tailored to their unique roles at a member firm. 
Senior leaders may engage with FINRA rules differently than frontline 
representatives and principals because they have broader visibility and 
responsibilities across their member firm, and often its broader 
organizational structure. FINRA believes that Regulatory Element CE 
content for such leaders therefore may be more effective if it covers 
the information addressed in the various Regulatory Element CE learning 
plans but presents the information from a broader, firm-

[[Page 69898]]

wide perspective. Such content could focus on firm risks, control 
systems, approaches to pressure-test firm capabilities and 
vulnerabilities, and similar enterprise-level considerations.
    Therefore, FINRA is proposing to adopt Rule 1240.03 to establish a 
Senior Leader Regulatory Element Interim Program (``Interim 
Program'').\5\ The proposed Interim Program, which would operate for 
just over two full years, would provide member firms with the option 
for their senior leaders to complete continuing education covering 
Regulatory Element topics, such as new and amended rules and regulatory 
trends, framed from the perspective of their unique roles and 
responsibilities at a member firm. Under the proposed Interim Program, 
participating senior leaders would continue to be required to take this 
continuing education on an annual basis, but the content of the 
training and the method of delivery would be different.\6\
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    \5\ For purposes of the proposed Interim Program, a senior 
leader would include any ``covered person'' as defined under Rule 
1240(a)(5) (Definition of Covered Person) who is listed on a member 
firm's Schedule A of Form BD; any other covered person serving on a 
member firm's executive, management or operations committees; or any 
covered person with similar status or functions who is employed at 
an affiliate of a member firm.
    \6\ A member firm would determine which of its senior leaders, 
if any, it believes should participate in the proposed Interim 
Program based on the member firm's annual evaluation of the training 
needs for such individuals.
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    For the proposed Interim Program, FINRA would, as it does today, 
develop the Regulatory Element CE training materials on an annual 
basis. In developing these training materials, FINRA would consider the 
annual learning plan topics assigned to each registration category. 
However, rather than limiting the content to the specific registration 
categories the senior leaders hold, the materials would cover content 
across all registration categories. FINRA would present significant 
rule changes, key regulatory developments and other Regulatory Element 
topics from the unique organizational vantage point of senior leaders. 
The materials would remain consistent with the core objectives of 
Regulatory Element CE but would be tailored to that senior leader 
audience. FINRA would make the Regulatory Element CE training materials 
available to those member firms that elect to participate in the 
proposed Interim Program. Unlike the manner in which Regulatory Element 
CE is currently delivered, the chief compliance officer (``CCO'') or 
other senior compliance officer at a member firm participating in the 
proposed Interim Program would provide the training to the 
participating senior leaders (including any participating senior 
leaders of affiliated entities).\7\ Further, the CCO or other senior 
compliance officer would have the discretion to supplement the training 
materials to provide the most relevant and effective training for the 
senior leaders at his or her firm; there would be no requirement to 
create or deliver any additional material specific to the 
registration(s) that any of the senior leaders hold.
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    \7\ Currently, Regulatory Element CE is provided to all 
individuals via the online CE platform that is available through 
FINRA's Financial Professional Gateway (``FinPro 
Gateway<SUP>TM</SUP>''). The proposed rule change would make a 
conforming amendment to Rule 1240(a)(6) (Delivery of the Regulatory 
Element) to remove the requirement that Regulatory Element CE be 
administered in a technological manner to allow for the CCO or other 
senior compliance officer at a member firm participating in the 
proposed Interim Program to deliver the Regulatory Element CE 
training.
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    A senior leader who participates in the proposed Interim Program 
would be required to certify that he or she has completed the 
Regulatory Element CE training, and the member firm would need to 
retain such certification for at least three years. In addition, CCOs 
of member firms that choose to participate in the proposed Interim 
Program would be required to identify to FINRA those senior leaders who 
completed the training and demonstrated proficiency in the subject 
matter covered by the educational material.\8\ Senior leaders who 
participate in the proposed Interim Program and successfully complete 
the training would satisfy their annual Regulatory Element CE under 
Rule 1240. Those senior leaders who do not participate in the proposed 
Interim Program would be required to complete the Regulatory Element CE 
courses assigned by FINRA, as they do today.
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    \8\ FINRA would include in a Regulatory Notice additional 
information on how CCOs would demonstrate compliance with the 
requirements of the rule.
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    As noted, FINRA is proposing to establish the Interim Program for a 
period of just over two full years. The proposed Interim Program would 
be voluntary and no member firm would be required to participate. While 
the proposed Interim Program is in place, FINRA would evaluate the 
demand for the proposed Interim Program and whether it is meeting the 
goals of Regulatory Element CE for senior leaders at member firms.\9\ 
If no further action is taken, the proposed Interim Program would 
automatically sunset at the end of the designated period.
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    \9\ As part of evaluating whether the goals of Regulatory 
Element CE are being met by the proposed Interim Program, FINRA 
anticipates collecting feedback and data from a variety of 
stakeholders, including the CCOs and senior leaders at participating 
member firms, as well as the CE Council.
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    FINRA has filed the proposed rule change 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 filing so FINRA can implement the proposed rule 
change immediately.\10\
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    \10\ FINRA notes that the proposed rule change would not impact 
members that are funding portals but would impact all other members 
including members that have elected to be treated as capital 
acquisition brokers (``CABs''), given that the CAB rule set 
incorporates the impacted FINRA rules by reference.
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2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\11\ which requires, among 
other things, that FINRA rules 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. FINRA believes that the proposed rule change continues 
FINRA's commitment to its Regulatory Element CE program while providing 
appropriate flexibility for member firms and senior leaders. In 
particular, FINRA notes that the proposed rule change maintains the 
requirement that all registered persons complete appropriate Regulatory 
Element content on an annual basis.
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    \11\ 15 U.S.C. 78o-3(b)(6).
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    As previously noted, participation in the proposed Interim Program 
would be voluntary so a member firm could require its senior leaders to 
continue to take the Regulatory Element CE that has been assigned for 
the specific registration categories that they hold if the member firm 
concludes that such training would be more appropriate based on their 
roles and responsibilities at the member firm. However, FINRA believes 
that the proposed rule change would provide an alternative Regulatory 
Element CE for senior leaders that would be a valuable option for 
member firms and also protect investors and the public interest. In 
this regard, under the proposed rule change, senior leaders would not 
be exempt from the annual Regulatory Element requirement; only the 
framing and method of delivery of the training would differ. The 
proposed rule change would provide member firms with the option for 
their senior leaders to take Regulatory Element CE training that 
addresses significant rule changes, key regulatory developments

[[Page 69899]]

and core knowledge areas specifically tailored for senior leaders. 
Further, the ability of a member firm's CCO or other senior compliance 
officer to supplement the training materials would help to further 
ensure that the CE training is particularly effective for the member 
firm's senior leaders.

B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.
Economic Impact Assessment
    As explained above, the proposed Interim Program would be voluntary 
and provide members with the option for their senior leaders to 
complete Regulatory Element CE training that is targeted to their 
unique roles and responsibilities at members.\12\ FINRA has undertaken 
an economic impact assessment to analyze the potential economic impacts 
of the proposed rule change, relative to the current baseline. The 
economic baseline includes Rule 1240, as well as how senior leaders 
engage with FINRA rules due to their broader visibility into, and 
responsibilities across, their member firms. FINRA does not have a 
reliable estimate of the number of senior leaders who may be eligible 
to participate in the proposed Interim Program, or of the number who 
may choose to participate.
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    \12\ The proposed Interim Program would provide members with the 
discretion to determine participation based upon their evaluation of 
the training needs for such individuals. Members also would have the 
ability to switch their senior leaders between the proposed Interim 
Program and the assigned Regulatory Element CE for the registration 
categories that they hold, providing additional flexibility.
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    The costs and benefits of the proposed Interim Program will depend 
on the ongoing cost of administering the program and its effectiveness. 
Because the proposed Interim Program is voluntary, members are not 
expected to use this option unless they believe the change benefits the 
firm overall. FINRA will evaluate whether the proposed Interim Program 
is meeting the goals of Regulatory Element CE for member firms. Any 
potential unintended impacts would be limited due to the term of the 
Interim Program.

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 \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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. 
FINRA has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission may designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. As noted in its Form 19b-4 and above 
in Item II, FINRA has requested that the Commission waive the 30-day 
delay requirement so that the proposed rule change may become operative 
immediately upon filing.
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    \15\ 17 CFR 240.19b-4(f)(6)(iii).
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    More specifically, FINRA stated in its request that immediate 
operability would enable FINRA to implement the proposed rule change so 
that member firms have a meaningful opportunity to elect participation 
in the Interim Program for the current CE cycle, identify eligible 
senior leaders, and complete any necessary planning and administrative 
steps before the December 31, 2026 Regulatory Element CE deadline. 
FINRA further stated that immediate operability would also permit FINRA 
to provide firms with Interim Program materials, begin operating the 
Interim Program during the remaining two months in the first year of 
the proposed interim period, which runs for just over two full years, 
and collect data regarding demand for the program that would include 
the remaining months in 2026. According to FINRA, absent a waiver, the 
reduced period between operability and the year-end Regulatory Element 
CE deadline could significantly limit firms' ability to participate in 
the proposed Interim Program during the remaining months in the 2026 CE 
cycle and, as a result, diminish the value of the proposed Interim 
Program during that same year. In addition, FINRA stated that immediate 
operability would also allow member firms to begin evaluating whether 
they wish to participate in the proposed Interim Program for the 2027 
Regulatory Element CE cycle, and if so, start to identify which of 
their senior leaders should complete the training via the proposed 
Interim Program. For these reasons, the Commission believes that 
waiving the 30-day operative delay for this proposed rule change is 
consistent with the protection of investors and the public interest. 
Accordingly, the Commission hereby waives the 30-day operative delay 
and designates the proposed rule change operative upon filing.\16\
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    \16\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change'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#5b292e373e76383436363e352f281b283e38753c342d"><span class="__cf_email__" data-cfemail="aedcdbc2cb83cdc1c3c3cbc0daddeeddcbcd80c9c1d8">[email&#160;protected]</span></a>. Please include 
file number SR-FINRA-2026-023 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-FINRA-2026-023. 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 (http://www.sec.gov/

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rules/sro.shtml). Copies of the filing will be available for inspection 
and copying at the principal office of FINRA. 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-FINRA-2026-023 and should be submitted on or 
before November 27, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-22561 Filed 11-4-26; 8:45 am]
BILLING CODE 8011-01-P


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