[Federal Register Volume 89, Number 112 (Monday, June 10, 2024)]
[Notices]
[Pages 48922-48925]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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 www.iextrading.com, 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

     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-IEX-2024-10 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-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 (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 
10:00 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