[Federal Register Volume 89, Number 122 (Tuesday, June 25, 2024)]
[Notices]
[Pages 53151-53153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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 www.nyse.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 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

     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-NYSECHX-2024-23 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-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 (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-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