[Federal Register Volume 89, Number 125 (Friday, June 28, 2024)]
[Notices]
[Pages 54101-54104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14212]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100409; File No. SR-CBOE-2024-022]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Rules Relating to the Continuing Education for Registered Persons 
as Provided Under Exchange Rule 3.33.01

June 24, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on June 12, 2024, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe 
Options'') 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 Exchange. The Exchange 
filed the proposal as a ``non-controversial'' proposed rule change 
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ 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\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 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

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to amend its rules relating to the Continuing Education for Registered 
Persons as provided under Exchange Rule 3.33.01. The text of the 
proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the 
Secretary, 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 proposed rule change amends Exchange Rule 3.33.01 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 content.
    In 2021, the Financial Industry Regulatory Authority, Inc. 
(``FINRA'') implemented rule changes, which amended FINRA's Continuing 
Education (``CE'') Program requirements to, among other things, provide 
eligible individuals who terminate 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, the MQP.\5\ Under FINRA Rule 1240.01, 
the MQP designated a look-back provision that, subject to specified 
conditions, 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

[[Page 54102]]

Waiver Program (``FSAWP'') \6\ 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'').
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    \5\ See Securities Exchange Act Release No. 93097 (September 21, 
2021), 86 FR 53358 (September 27, 2021) (Order Approving File No. 
SR-FINRA-2021-015). Other exchanges, including Cboe Options, 
subsequently filed copycat rule filings to align their CE rules with 
those of FINRA. See Securities Exchange Act Release No. 94513 (March 
24, 2022), 87 FR 18446 (March 30, 2022), (SR-CBOE-2022-012).
    \6\ 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.
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    In 2023, FINRA amended FINRA Rule 1240.01, to provide Look-Back 
Individuals a second opportunity to elect to participate in the MQP 
(the ``FINRA Second Enrollment Period'').\7\ The proposed rule change 
required that Look-Back Individuals who elect to participate in the MQP 
during the FINRA Second Enrollment Period complete any prescribed 2022 
and 2023 MQP content by March 31, 2024. 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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    \7\ See Securities Exchange Act Release No. 97184 (March 22, 
2023), 88 FR 18359 (March 28, 2023) (SR-FINRA-2023-005).
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    In response to FINRA's rule changes and to facilitate compliance 
with the Exchange's CE Program requirements by members of multiple 
exchanges, the Exchange implemented rule changes to align with FINRA's 
CE Program.\8\ Such rules, among other things, provide eligible 
individuals who terminate any of their representative or principal 
registrations the option of maintaining their qualification for any of 
the terminated registrations by completing CE through the MQP. Further, 
Exchange Rule 3.33.01 includes a look-back provision that, subject to 
specified conditions, extends the option for maintaining qualifications 
following a registration category termination to (i) individuals who 
have been registered as a representative or principal within two years 
immediately preceding March 15, 2022, and (ii) individuals who have 
been participants of the FSAWP immediately preceding March 15, 2022 
implementation (i.e., Look-Back Individuals). Exchange Rule 3.33.01 
also provided Look-Back Individuals with a second enrollment period, 
between August 23, 2023, and December 31, 2023 (the ``Exchange Second 
Enrollment Period''). Exchange Rule 3.33.01 requires that Look-Back 
Individuals who elect to participate in the MQP during the Exchange 
Second Enrollment Period complete any prescribed 2022 and 2023 MQP 
content by March 31, 2024.\9\
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    \8\ See Rules 3.33(c), 3.33.01, and 3.33.02.
    \9\ 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 August 23, 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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    FINRA recently submitted a proposal related to its CE Program (the 
``FINRA Rule Change'').\10\ The proposal set forth changes to FINRA 
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.\11\ In addition, the proposed 
rule change provides 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.
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    \10\ See Securities Exchange Act Release No. 100067 (May 6, 
2024), 89 FR 40520 (May 10, 2024) (SR-FINRA-2024-006).
    \11\ 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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    In the FINRA Rule Change, FINRA noted that FINRA sent multiple 
reminders, including a March 16, 2024 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. In the FINRA Rule 
Change, FINRA further noted that in the week leading up to the 
deadline, FINRA noticed that several thousand of those individuals were 
renewing their participation in the MQP for 2024 instead of completing 
their prescribed CE.\12\ Per the FINRA Rule Change, 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.\13\
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    \12\ 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.
    \13\ 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 similar reasons and to facilitate compliance with the 
Exchange's CE Program requirements by members of multiple exchanges, 
the Exchange is also proposing to amend its rules (i.e., Exchange Rule 
3.33.01) 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 the effective date of this filing, and July 1, 2024, to be 
eligible to continue their participation in the MQP.\14\ In addition, 
the proposed rule change provides that any such individuals who will 
have completed their prescribed 2022 and 2023 CE content between March 
31, 2024, and the effective date of this filing, will be deemed to have 
completed such content by July 1, 2024, for purposes of the rule.
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    \14\ 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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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\15\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \16\ requirements that the rules of an exchange be 
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 regulating, clearing, 
settling, processing information with respect to, and 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

[[Page 54103]]

investors and the public interest. Additionally, the Exchange believes 
the proposed rule change is consistent with the Section 6(b)(5) \17\ 
requirement that the rules of an exchange not be designed to permit 
unfair discrimination between customers, issuers, brokers, or dealers.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
    \17\ Id.
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    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. As FINRA noted in the 
FINRA Rule Change, 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 believes that participation in the MQP 
reduces unnecessary impediments to requalification for these 
individuals without diminishing investor protection. In addition, 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 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.
    Further, the Exchange believes the proposed amendments reduce the 
possibility of a regulatory gap between Exchange and FINRA rules, 
providing more uniform standards across the securities industry. The 
Exchange believes that the proposed rule change will bring consistency 
and uniformity with FINRA's recently amended CE Program, which will, in 
turn, assist Trading Permit Holders and their associated persons in 
complying with these rules and improve regulatory efficiency. The 
proposed rule changes make ministerial changes to the Exchange's CE 
rules to align them with the CE rules of FINRA, in order to prevent 
unnecessary regulatory burdens and to promote efficient administration 
of the rules.

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 changes which are, in all material respects, based 
upon and substantially similar to, recent rule changes 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

    The Exchange neither solicited nor received comments on 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 \18\ and Rule 19b-
4(f)(6) thereunder.\19\
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 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) \20\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-142244(f)(6)(iii),\21\ 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. The 
Exchange, like FINRA, requests that the proposed rule change become 
operative as quickly as possible so FINRA, on behalf of the Exchange, 
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.\22\
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    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ 17 CFR 240.19b-4(f)(6)(iii).
    \22\ 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) \23\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \23\ 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-CBOE-2024-022 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-CBOE-2024-022. 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

[[Page 54104]]

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-CBOE-2024-022 and 
should be submitted on or before July 19, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-14212 Filed 6-27-24; 8:45 am]
BILLING CODE 8011-01-P