[Federal Register Volume 89, Number 110 (Thursday, June 6, 2024)]
[Notices]
[Pages 48451-48453]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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 https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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

     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-NASDAQ-2024-023 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-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 (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 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