[Federal Register Volume 89, Number 92 (Friday, May 10, 2024)]
[Notices]
[Pages 40520-40522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10196]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100067; File No. SR-FINRA-2024-006]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; 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

May 6, 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 April 30, 2024, 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 amend FINRA Rule 1240.01 (Eligibility of 
Other Persons to Participate in the Continuing Education Program 
Specified in Paragraph (c) of this Rule) 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.
    Below is the text of the proposed rule change. Proposed new 
language is italicized; proposed deletions are in brackets.
* * * * *

1200. REGISTRATION AND QUALIFICATION

* * * * *

1240. Continuing Education

    This Rule prescribes requirements regarding the continuing 
education of registered persons. The requirements shall consist of a 
Regulatory Element and a Firm Element as set forth below. This Rule 
also sets forth continuing education programs through which 
specified persons may maintain their qualification in a 
representative or principal registration category following the 
termination of that registration category.
    (a) through (c) No Change.

   Supplementary Material:------

    .01 Eligibility of Other Persons to Participate in the 
Continuing Education Program Specified in Paragraph (c) of this 
Rule. A person registered in a representative or principal 
registration category with FINRA within two years immediately 
preceding March 15, 2022 shall be eligible to participate in the 
continuing education program under paragraph (c) of this Rule, 
provided that he or she satisfies the conditions set forth in 
paragraphs (c)(1) and (c)(3) through (c)(6) of this Rule. In 
addition, a person participating in the Financial Services Affiliate 
Waiver Program under Rule 1210.09 immediately preceding March 15, 
2022 shall be eligible to participate in the continuing education 
program under paragraph (c) of this Rule, provided that he or she 
satisfies the conditions set forth in paragraphs (c)(3), (c)(5) and 
(c)(6) of this Rule. Persons eligible under this Supplementary 
Material .01 shall make their election to participate in the 
continuing education program under paragraph (c) of this Rule either 
(1) between January 31, 2022, and March 15, 2022; or (2) between 
March 15, 2023, and December 31, 2023. If such persons elect to 
participate in the continuing education program, their participation 
period shall also be for a period of five years following the 
termination of their registration categories, as with other 
participants under paragraph (c) of this Rule. [In addition, 
eligible persons who elect to participate in the continuing 
education program between March 15, 2023, and December 31, 2023, 
must complete any prescribed 2022 and 2023 continuing education 
content by March 31, 2024.] Individuals enrolled in the continuing 
education program under this Supplementary Material .01 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 May 22, 2024, 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 May 22, 2024, shall be deemed to have completed 
such content by July 1, 2024, for purposes of this Supplementary 
Material .01.
    .02 No Change.
* * * * *

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
    FINRA 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

[[Page 40521]]

MQP); and (2) individuals who were participating in the Financial 
Services Affiliate Waiver Program (``FSAWP'') under FINRA 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\ FINRA 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. 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.
    \5\ In March 2023, FINRA amended Rule 1240.01 to provide Look-
Back Individuals with a second opportunity to participate in the 
MQP. See Securities Exchange Act Release No. 97184 (March 22, 2023), 
88 FR 18359 (March 28, 2023) (Notice of Filing and Immediate 
Effectiveness of File No. SR-FINRA-2023-005).
    \6\ 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 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 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\ FINRA believes 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\ 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\ 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 is proposing to amend 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, to be eligible to continue their 
participation in the MQP.\10\ FINRA 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. FINRA plans to reach out to all impacted 
individuals and inform them of the new CE completion period. FINRA 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.
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    FINRA has filed the proposed rule change for immediate 
effectiveness and has requested that the SEC waive the requirement that 
the proposed rule change not become operative for 30 days after the 
date of the filing. The operative date will be the date of filing of 
the proposed rule change, if the SEC grants the waiver.
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 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. 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. 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. FINRA continues to believe that participation in the 
MQP reduces unnecessary impediments to requalification without 
diminishing investor protection.\12\ 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. FINRA 
believes that reopening the CE completion period, as proposed, will 
further these goals and objectives.
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    \11\ 15 U.S.C. 78o-3(b)(6).
    \12\ 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

    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. Further, FINRA provided an 
extensive economic impact assessment relating to the MQP as part of the 
rule filing that proposed the adoption of the MQP.\13\
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    \13\ See Securities Exchange Act Release No. 92183 (June 15, 
2021), 86 FR 33427 (June 24, 2021) (Notice of Filing of File No. SR-
FINRA-2021-015).
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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

[[Page 40522]]

as the Commission may designate, it has become effective pursuant to 
Section 19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6) 
thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\17\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. FINRA 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, FINRA 
states that it plans to reach out to all impacted individuals and 
inform them of the new CE completion period established by this rule 
change. FINRA has indicated that the immediate operation of the 
proposed rule change is appropriate so that FINRA can communicate the 
rule change to impacted individuals promptly. FINRA also believes that 
immediate operation of the proposed rule change is appropriate because 
it would provide clarity to impacted individuals without unnecessary 
delay. 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.\18\
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ 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

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-FINRA-2024-006 on the subject line.

Paper Comments

     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-2024-006. 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 (https://www.sec.gov/rules/sro.shtml). 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 such filing also 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-2024-006 and should be submitted 
on or before May 31, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-10196 Filed 5-9-24; 8:45 am]
BILLING CODE 8011-01-P