Federal Register / Vol. 87, No. 9 / Thursday, January 13, 2022 / Notices 2193 

13See supra note 6. 

14 15 U.S.C. 78s(b)(3)(A)(ii). 

15 17 CFR 240.19b–4(f)(2). 16 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

Exchange’s proposed membership fees 

will be lower than the cost of 

membership on other exchanges,13 and 

therefore, may stimulate intramarket 

competition by attracting additional 

firms to become Members on the 

Exchange or at least should not deter 

interested participants from joining the 

Exchange. In addition, membership fees 

are subject to competition from other 

exchanges. Accordingly, if the changes 

proposed herein are unattractive to 

market participants, it is likely the 

Exchange will see a decline in 

membership as a result. The proposed 

fee change will not impact intermarket 

[sic] competition because it will apply 

to all Members equally. The Exchange 

operates in a highly competitive market 

in which market participants can 

determine whether or not to join the 

Exchange based on the value received 

compared to the cost of joining and 

maintaining membership on the 

Exchange. 

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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 14 and Rule 

19b–4(f)(2) 15 thereunder. 

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 

change 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MEMX–2021–19 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–MEMX–2021–19. 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 (http://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. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–MEMX–2021–19 and 

should be submitted on or before 

February 3, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00489 Filed 1–12–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93928; File No. SR–FINRA– 

2021–034] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Section 4 of 

Schedule A to the FINRA By-Laws 

Relating to the Continuing Education 

Fees 

January 7, 2022. 

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 December 

30, 2021, 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, II, and III below, which Items 

have been prepared by FINRA. FINRA 

has designated the proposed rule change 

as ‘‘establishing or changing a due, fee 

or other charge’’ under Section 

19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 

4(f)(2) thereunder,4 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to amend Section 

4 of Schedule A to the FINRA By-Laws 

to: (1) Revise the fee for the Regulatory 

Element of continuing education (‘‘CE’’); 

(2) establish the fee for individuals who 

elect to maintain their qualification 

following the termination of a 

registration category through the 

Maintaining Qualifications Program 

(‘‘MQP’’); and (3) make a technical 

change to clarify that the fee for failing 

to timely appear for a scheduled 

qualification examination appointment 

and for cancelling or rescheduling a 

qualification examination close to the 

scheduled appointment date equally 

applies to online administrations of 

qualification examinations. 

Below is the text of the proposed rule 

change. Proposed new language is in 

italics; proposed deletions are in 

brackets. 

* * * * * 


jspears on DSK121TN23PROD with NOTICES1
2194 Federal Register / Vol. 87, No. 9 / Thursday, January 13, 2022 / Notices 

5See Securities Exchange Act Release No. 93097 

(September 21, 2021), 86 FR 53358 (September 27, 

2021) (Order Approving File No. SR–FINRA–2021– 

015). The Regulatory Element is administered by 

FINRA and focuses on regulatory requirements and 

industry standards. The proposed rule change also 

included amendments to the Firm Element training, 

which is provided by each firm annually to its 

registered persons and focuses on securities 

products, services and strategies the firm offers, 

firm policies and industry trends. 

6See supra note 5. Currently, individuals must 

requalify by examination if they have not 

reregistered within two years after their 

registrations have been terminated (‘‘the two-year 

qualification period’’). Individuals may also seek to 

obtain a waiver of the applicable qualification 

examination(s). MQP participants will have a 

maximum of five years following the termination of 

a representative or principal registration category to 

reregister with FINRA without having to requalify 

by examination or having to obtain an examination 

waiver, subject to satisfying the conditions of the 

MQP. Among other conditions, MQP participants 

will be required to complete annual MQP content 

consisting of a combination of Regulatory Element 

content and Practical Element content developed by 

FINRA and the Securities Industry/Regulatory 

Council on Continuing Education. 

7See Regulatory Notice 21–41 (November 17, 

2021) announcing the SEC approval and effective 

dates of the amendments. 

8The annual Regulatory Element fee is set forth 

in proposed Section 4(f)(1) of Schedule A to the 

FINRA By-Laws. See also FINRA Rule 1240(a) 

(Regulatory Element). 

9The annual MQP fee is set forth in proposed 

Section 4(f)(2) of Schedule A to the FINRA ByLaws. See also FINRA Rule 1240(c) (Continuing 

Education Program for Persons Maintaining Their 

Qualification Following the Termination of a 

Registration Category). 

10Eligible individuals must make their election to 

participate in the MQP at the time of their Form U5 

(Uniform Termination Notice for Securities 

Industry Registration) submission or within two 

years from the termination of a registration 

category. Individuals who elect to participate in the 

MQP at the later date will be required to complete, 

within two years from the termination of the 

registration category, any CE that becomes due 

under the MQP between the time of their Form U5 

submission and the date that they commence their 

participation in the MQP. 

By-Laws of the Corporation 

* * * * * 

Schedule A to the By-Laws of the 

Corporation 

* * * * * 

Section 4—Fees 

(a) through (b) No Change. 

(c) The following fees shall be assessed to 

each individual who takes an examination as 

described below. These fees are in addition 

to the registration fee described in paragraph 

(b) and any other fees that the owner of an 

examination that FINRA administers may 

assess. 

* * * * * 

(1) through (2) No Change. 

(3) There shall be a service charge equal to 

the examination or Regulatory Element 

session fee assessed to each individual who, 

having made an appointment for [a specific 

time and place for] an [test center-based] 

administration of an examination listed 

above or a test center-based Regulatory 

Element session, fails to timely appear for 

such appointment or cancels or reschedules 

such appointment within two business days 

prior to the [test center] appointment date. 

(4) There shall be a service charge equal to 

one-half of the examination or Regulatory 

Element session fee assessed to each 

individual who, having made an 

appointment for [a specific time and place 

for] an [test center-based] administration of 

an examination listed above or a test centerbased Regulatory Element session, cancels or 

reschedules such appointment three to 10 

business days prior to the [test center] 

appointment date. 

(d) through (e) No Change. 

(f)(1) There shall be a session fee of $18 

[$55] assessed to each individual who 

completes the Regulatory Element of the 

Continuing Education requirements pursuant 

to FINRA rules. 

(2) There shall be assessed to each 

individual electing to participate in the 

continuing education program under Rule 

1240(c) a fee of $100 for each year that such 

individual is participating in the program. 

Individuals who elect to participate in the 

program within two years from the 

termination of a registration would also be 

assessed any accrued annual fee. 

(g) through (i) 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 

On September 21, 2021, the SEC 

approved amendments to FINRA Rules 

1210 (Registration Requirements) and 

1240 (Continuing Education 

Requirements) to, among other things, 

require registered persons to complete 

the Regulatory Element of CE annually 

by December 31 of each year, rather 

than every three years, and to complete 

Regulatory Element content for each 

representative or principal registration 

category that they hold.5 In addition, the 

amendments 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.6 The annual Regulatory Element 

requirement will become effective on 

January 1, 2023; eligible individuals can 

make their election to participate in the 

MQP beginning on January 31, 2022.7

FINRA currently charges a fee of $55 

to each individual who completes the 

Regulatory Element. In conjunction with 

the amendments to transition to an 

annual Regulatory Element requirement, 

FINRA is proposing amendments to 

Section 4 of Schedule A to the FINRA 

By-Laws to revise the fee for the 

Regulatory Element from $55 to $18.8

The proposed $18 annual fee is 

comparable to the current $55 fee over 

a three-year period. Moreover, the 

proposed fee for the annual Regulatory 

Element would be the same for all 

registered persons, regardless of the 

amount of annual content that they 

would be required to complete (that is, 

an individual who holds multiple 

registrations would be subject to the 

same proposed $18 annual fee as an 

individual who holds a single 

registration). 

Further, in conjunction with the 

amendments to adopt the MQP, FINRA 

is proposing amendments to Section 4 

of Schedule A to the FINRA By-Laws to 

charge an annual fee of $100 to each 

MQP participant.9 The proposed annual 

fee would be a flat fee, regardless of the 

number of registrations for which an 

individual elects to remain qualified 

under the MQP (that is, an individual 

who elects to remain qualified for 

multiple registrations under the MQP 

would be subject to the same proposed 

$100 annual fee as an individual who 

elects to remain qualified for a single 

registration under the MQP). The 

proposed annual fee would be assessed 

at the time an eligible individual elects 

to participate in the MQP and thereafter 

annually each year that the individual 

continues in the MQP. Eligible 

individuals who elect to participate in 

the MQP within two years from the 

termination of a registration category 

would be assessed any accrued annual 

fee.10

Finally, FINRA is proposing 

amendments to Section 4 of Schedule A 

to the FINRA By-Laws to make a 

technical change to clarify that the 

administrative fee for failing to timely 

appear for a scheduled appointment and 

for cancelling or rescheduling a 

qualification examination close to the 

scheduled appointment date equally 

applies to online administrations of 

qualification examinations. FINRA 

qualification examinations are currently 

administered in test centers as well as 

online. Similar to test-center 


jspears on DSK121TN23PROD with NOTICES1
Federal Register / Vol. 87, No. 9 / Thursday, January 13, 2022 / Notices 2195 

11Additional information regarding the online 

appointment process is available at https://

www.finra.org/registration-exams-ce/qualificationexams/testonline. 

12Further information regarding the rescheduling 

and cancellation policy is available at https://

www.finra.org/registration-exams-ce/qualificationexams/cancellation-policy. 

13 15 U.S.C. 78o–3(b)(5). 

14The $100 fee would provide each MQP 

participant with all the content required of that 

participant, including the Regulatory Element 

content. 

15See Securities Exchange Act Release No. 90176 

(October 14, 2020), 85 FR 66592, 66594 (October 20, 

2020) (Notice of Filing and Immediate Effectiveness 

of File No. SR–FINRA–2020–032). 

16See 85 FR 66594 n.14. 

17The analysis uses data from 2019 and expected 

for 2023. The year 2019 was indicative of historical 

program performance. The year 2019 also pre-dates 

a change from FINRA’s proprietary delivery 

platform to a vendor-supplied learning management 

system and one-time costs associated with changes 

to the format, content and frequency of the 

Regulatory Element. The year 2023 is the first year 

that the annual Regulatory Element requirement 

will be in effect. 

18 Given that eligible individuals can begin 

making their election to participate in the MQP on 

January 31, 2022, 2023 will be the first fiscal year 

that the proposed annual MQP fee would be in 

effect for the entire year. 

19FINRA estimates that approximately 90,000 

individuals end their registration with all firms 

with which they are registered in a typical year. 

Among them, FINRA estimates that approximately 

40,500 individuals (or 45 percent) do not reregister 

within two years of terminating their registrations 

and would therefore need to participate in the MQP 

to be able to reregister with FINRA without having 

to requalify by examination or having to obtain an 

examination waiver. FINRA expects that out of 

these individuals, approximately 8,100 individuals 

(or 20 percent) would likely choose to participate 

in the MQP to maintain their qualification. After 

adding approximately 15,000 individuals who may 

terminate their permissive registrations in 2023 and 

instead elect to participate in the program, as well 

as approximately 14,850 individuals who may have 

terminated their registrations between 2020 to 2022 

and who elect to join the program, FINRA estimates 

that the total number of individuals who would 

participate in the program in 2023 to be 

approximately 38,000 individuals. 

20See supra note 6. FINRA expects that the 

number of individuals who will participate in the 

MQP each year (approximately 38,000 individuals 

in 2023) will be significantly smaller than the 

population of registered persons, which, as noted 

below, is currently approximately 620,000 

individuals. 

21See 85 FR 66599–600 (including the discussion 

of the role of oversight, transparency and rebates in 

providing cost discipline). A portion of the 

proposed annual fee for the MQP will replace the 

contribution to FINRA’s overall regulatory 

operations from qualification examinations that will 

no longer be taken. 

administrations of qualification 

examinations, candidates must schedule 

an appointment and satisfy other 

requirements to take a qualification 

examination online.11 Likewise, there is 

an administrative fee for failing to 

timely appear for a scheduled online 

appointment and for cancelling or 

rescheduling a qualification 

examination close to the scheduled 

online appointment date.12

FINRA has filed the proposed rule 

change for immediate effectiveness. 

However, the proposed annual MQP fee 

will be implemented on January 31, 

2022 to coincide with the date that 

eligible individuals can begin making 

their election to participate in the MQP. 

In addition, the proposed revised fee for 

the Regulatory Element will be 

implemented on January 1, 2023 to 

coincide with the effective date of the 

transition to an annual Regulatory 

Element requirement. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(5) of the Act,13 which 

requires, among other things, that 

FINRA rules provide for the equitable 

allocation of reasonable dues, fees and 

other charges among members and 

issuers and other persons using any 

facility or system that FINRA operates 

or controls. 

Proposed Fees 

As described above, FINRA is 

proposing to charge an annual fee of $18 

for completing the Regulatory Element 

requirement and an annual fee of $100 

to each MQP participant.14 The 

proposed fees are based on the use of a 

particular service by registered persons 

and are therefore use-based fees as that 

term was used in FINRA’s 2020 

comprehensive fee filing.15 FINRA 

employs use-based fees for some of the 

specific services and data it provides to 

members and the public in support of 

its regulatory mission.16

With respect to the Regulatory 

Element, in 2019, FINRA delivered 

approximately 202,600 Regulatory 

Element sessions and charged a fee of 

$55 per session.17 These sessions 

produced approximately $11.1 million 

in (gross) revenue. In 2023, when the 

annual Regulatory Element requirement 

is in effect, FINRA anticipates 

delivering approximately 626,000 

annual sessions. Assuming the proposed 

$18 fee is in effect, the annual 

Regulatory Element requirement would 

produce approximately $11.3 million in 

revenue. Revenue is nearly the same in 

2019 as is anticipated for 2023 since the 

reduction in the session fee and the 

increase in the number of sessions are 

expected to balance each other. 

With respect to the MQP, in 2023, 

when the MQP has been in effect for an 

entire year,18 FINRA expects that 

approximately 38,000 individuals 

would be enrolled in the MQP.19

Assuming the proposed $100 fee is in 

effect, the MQP would produce 

approximately $3.8 million in revenue. 

Changes in the assumptions, for 

example concerning the projected 

number of program participants, may 

have a significant impact on the 

projected aggregate revenue over time. 

Reasonableness of the Proposed Fees 

FINRA believes that the proposed fees 

are reasonable. With respect to the 

Regulatory Element, as discussed above, 

revenue is nearly the same in 2019 as is 

anticipated for 2023 since the reduction 

in the session fee and the increase in the 

number of sessions are expected to 

balance each other. Further, FINRA’s 

annual costs for developing, 

maintaining and delivering the 

Regulatory Element are also expected to 

remain fairly constant over this period. 

Thus, the proposed annual fee of $18 

will produce similar annual revenues 

and provide a similar annual 

contribution to FINRA’s overall 

regulatory operations as the current 

Regulatory Element program for which 

member firms pay $55 every three years 

on behalf of their registered persons. 

The annual Regulatory Element will 

serve the same function as the current 

Regulatory Element program, and the 

amount of content completed in a threeyear, annual cycle, is expected to be 

comparable to what most registered 

persons are currently completing every 

three years. 

With respect to the MQP, the 

proposed fee is designed to recover the 

systems and operational costs of 

establishing the annual MQP, and the 

annual costs for developing, 

maintaining and delivering the annual 

MQP content, which, as noted earlier, 

will include a combination of 

Regulatory Element content and 

Practical Element content.20 The 

proposed fee is also expected to provide 

a contribution to FINRA’s overall 

regulatory operations as with the 

Regulatory Element fee. As explained in 

FINRA’s 2020 comprehensive fee filing, 

it is not feasible to associate a direct 

affiliated revenue stream for each of 

FINRA’s programs, and thus numerous 

operations and services must be funded 

by other revenue sources, which include 

both general regulatory assessments and 

use-based fees.21 The contribution from 

the proposed MQP fee in each year is 

anticipated to be similar to or less than 

that of the current (and proposed) 

Regulatory Element program as a share 

of revenue raised. For comparison 

purposes, FINRA reviewed state-level 

information on the annual cost of 

continuing education for other financial 

service providers and found that the 


jspears on DSK121TN23PROD with NOTICES1
2196 Federal Register / Vol. 87, No. 9 / Thursday, January 13, 2022 / Notices 

22See Securities Exchange Act Release No. 72280 

(May 29, 2014), 79 FR 32351, 32353 (June 4, 2014) 

(Order Approving File No. SR–FINRA–2014–018) 

(approving fees for ATS data that varied according 

to use and discussing the SEC’s prior approval of 

similar use-based TRACE fees). 

23See Securities Exchange Act Release No. 92183 

(June 15, 2021), 86 FR 33427, 33432–33436 (June 

24, 2021) (Notice of File No. SR–FINRA–2021–015). 

24See Regulatory Notice 15–28 (August 2015). 

25See 2020 FINRA Industry Snapshot, available 

at https://www.finra.org/sites/default/files/2020-07/ 

2020-industry-snapshot.pdf. 

26See supra note 23. 

27See FINRA Rule 1210.08 (Lapse of Registration 

and Expiration of SIE). 

28The current fees for FINRA qualification 

examinations are available at https://www.finra.org/ 

registration-exams-ce/qualification-exams. In order 

to requalify for a registration, an individual may 

need to repeat the Securities Industry Essentials 

(SIE) examination as well as a representative- or 

principal-level qualification examination. Thus, the 

direct cost of requalifying for a single registration, 

such as the General Securities Representative 

registration, could range from $300 to $380 (for both 

the SIE and Series 7); requalifying for two 

registrations, such as the General Securities 

Representative and Investment Banking 

proposed annual fee of $100 is generally 

lower. 

The Proposed Fees are Equitable and 

Not Unfairly Discriminatory 

FINRA believes that the proposed fees 

are equitable and not unfairly 

discriminatory. With respect to the 

Regulatory Element, the requirement to 

complete Regulatory Element content on 

an annual basis will be applicable to 

every registered person based on the 

same terms and they will pay the same 

proposed fee. With respect to the MQP, 

all eligible individuals who elect to 

participate in the MQP to maintain their 

qualification for a terminated 

registration category will be subject to 

the same terms and will pay the same 

proposed fee. In addition, FINRA 

believes that the proposed fee for the 

MQP is low enough that individuals 

who expect to obtain meaningful 

benefits from the MQP will not be 

discouraged from participating due to 

the fee. 

Further, as explained above, the 

proposed fees are use-based fees. The 

SEC has stated its belief that a ‘‘usebased approach is consistent with 

equitable distribution of fees’’ and 

approved use-based fees when 

reasonably related to costs.22 As 

discussed above, the proposed usebased fees are reasonably related to 

costs. The proposed fees will cover the 

cost of developing, maintaining and 

delivering the annual Regulatory 

Element content and the annual MQP 

content and the systems and operational 

costs of establishing and managing the 

annual Regulatory Element and the 

annual MQP. The proposed fees in each 

year are anticipated to provide a 

contribution to FINRA’s overall 

regulatory operations as a share of 

revenue raised that is similar to or less 

than that of the current Regulatory 

Element program. 

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. 

Economic Impact Assessment 

FINRA has undertaken an economic 

impact assessment, as set forth below, to 

analyze the regulatory need for the 

proposed rule change, its potential 

economic impacts, including 

anticipated costs, benefits, and 

distributional and competitive effects, 

relative to the current baseline, and the 

alternatives FINRA considered in 

assessing how best to meet FINRA’s 

regulatory objectives. 

Regulatory Need 

FINRA previously established the 

regulatory need for the annual 

Regulatory Element and the annual 

MQP.23 This filing addresses the fees for 

those programs. 

Regulatory Element 

Economic Baseline 

All FINRA registered persons must 

take the Regulatory Element two years 

after they initially became registered 

and then every three years ongoing. In 

2015, FINRA transitioned the delivery 

of the Regulatory Element to an online 

platform (CE Online), which allows 

individuals to complete the content 

online at a location of their choosing, 

including their private residence.24 The 

transition in 2015 to CE Online reduced 

the associated Regulatory Element fee 

from $100 to $55 per individual, which 

is the current fee. 

The population of FINRA registered 

persons is approximately 620,000 

individuals.25 FINRA delivered 

approximately 202,600 Regulatory 

Element sessions in 2019. FINRA 

expects to deliver approximately 

204,000 Regulatory Element sessions in 

2021. 

Economic Impacts 

FINRA previously considered the 

economic impacts of the Regulatory 

Element program.26 The proposed fee is 

slightly less than one-third of the $55 

fee that is currently paid every three 

years for the Regulatory Element. Thus, 

the proposed rule change impacts the 

timing of payments but leaves the total 

collected over three years essentially 

unchanged. In addition, instead of 

taking the Regulatory Element two years 

after first becoming registered, 

individuals would be required to 

complete the Regulatory Element one 

year after first becoming registered. This 

would result in an extra one-time fee. 

The change in timing may necessitate 

some small adjustments among certain 

firms and individuals. For example, 

small firms with a stable number of 

registered persons for which previously 

no registered persons took the 

Regulatory Element in some years will 

see a shift from a varying annual 

expense to a flat annual expense. Large 

firms are less likely to see this effect, 

since they are more likely to have 

registered persons taking the Regulatory 

Element every year under the current 

program. If firms pay the Regulatory 

Element fee and do not reduce 

compensation or other benefits, there 

would be no financial impact on 

individuals from these changes. If 

individuals pay the Regulatory Element 

fee, then they will see a shift from a 

varying annual expense to a flat annual 

expense. 

Alternatives Considered 

In establishing the proposed fee, 

FINRA sought to minimize changes in 

the fees paid over three years by firms 

and individuals while covering program 

costs and maintaining the contribution 

of the Regulatory Element to FINRA’s 

overall regulatory operations. FINRA 

considered a range of possible fees and 

found that the proposed fee and annual 

revenue come within narrow ranges of 

meeting these goals. 

MQP 

Economic Baseline 

The economic baseline for the 

proposed fee is the existing 

requalification requirements and the 

fees and costs to individuals and their 

potential employers relating to those 

requirements.27 As stated earlier, under 

the current regime, individuals 

generally have a two-year window from 

the termination of their registration(s) to 

reregister without having to requalify by 

examination or having to obtain an 

examination waiver. Requalification 

imposes costs in the form of time spent 

preparing for and taking the applicable 

examinations, potential limitations to 

the activities permitted to be conducted 

until the requalification is completed, 

opportunity costs for the individual and 

the potential employers in terms of lost 

business, and the direct registration 

costs.28 Member firms may also 


jspears on DSK121TN23PROD with NOTICES1
Federal Register / Vol. 87, No. 9 / Thursday, January 13, 2022 / Notices 2197 

Representative registrations, could range from $600 

to $680 (for the SIE, Series 7 and Series 79). The 

qualification examination fees used in the examples 

above are based on the revised fees that will go into 

effect on January 1, 2022. See supra note 15. 

29See 2020 FINRA Industry Snapshot, available 

at https://www.finra.org/sites/default/files/2020-07/ 

2020-industry-snapshot.pdf. 

30See supra note 23. 

31 In the event of a partial termination, some firms 

may determine to reimburse individuals who elect 

to remain qualified for a terminated registration 

through the MQP. 

32 15 U.S.C. 78s(b)(3)(A). 

33 17 CFR 240.19b–4(f)(2). 34 17 CFR 200.30–3(a)(12). 

experience material costs when they are 

not able to retain qualified experienced 

persons because of professional and 

personal events that require such 

individuals to take an extended leave of 

absence from the industry. 

As noted above, the population of 

FINRA-registered persons is 

approximately 620,000 individuals.29 In 

recent years, out of the approximately 

620,000 individuals, approximately 

90,000 individuals end their registration 

with all firms with which they are 

registered at some point during the year. 

Out of these, approximately half do not 

reregister and are considered to have left 

the securities industry. 

Economic Impacts 

FINRA previously considered the 

economic impacts of the MQP.30 As 

discussed above, the proposed fee of 

$100 will permit recovery of the costs 

for the development, maintenance and 

delivery of the MQP content and the 

systems and operational costs of 

establishing and managing the MQP. 

The proposed fee will also provide for 

a contribution to FINRA’s overall 

regulatory operations. 

The proposed $100 annual fee is 

imposed on individuals following the 

termination of a registration category.31

As such, FINRA anticipates that the 

proposed fee will not impose costs on 

member firms. 

Participating in the MQP is voluntary, 

so individuals will pay the fee when the 

anticipated benefits outweigh the costs. 

Potential beneficiaries are not limited to 

individuals who under the current 

baseline requalify and reregister 

between two and five years after their 

registrations are terminated. Some 

individuals who currently do not 

terminate their registrations, and others 

who terminate their registrations and 

never reregister, may also benefit from 

the option provided by the MQP and 

paying the proposed $100 fee. 

Alternatives Considered 

In establishing the proposed fee, 

FINRA sought to minimize the burden 

to individuals who would elect to 

participate in the MQP while covering 

program costs and maintaining the 

contribution of the testing and CE 

programs to FINRA’s overall regulatory 

operations. FINRA considered a range of 

possible fees and found that the 

proposed fee and annual revenue come 

within narrow ranges of meeting these 

goals. 

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 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 32 and paragraph (f)(2) of Rule 

19b–4 thereunder.33 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

FINRA–2021–034 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–2021–034. 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 (http://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 such 

filing also will be available for 

inspection and copying at the principal 

office of FINRA. All comments received 

will be posted without change. Persons 

submitting comments are cautioned that 

we do not redact or edit personal 

identifying information from comment 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–FINRA– 

2021–034 and should be submitted on 

or before February 3, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00490 Filed 1–12–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–512, OMB Control No. 

3235–0570] 

Proposed Collection; Comment 

Request; Extension: Form N–CSR 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission (the 

‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget (‘‘OMB’’) for 

extension and approval. 

Form N–CSR (17 CFR 249.331 and 

274.128) is a combined reporting form 


jspears on DSK121TN23PROD with NOTICES1