19146 Federal Register / Vol. 87, No. 63 / Friday, April 1, 2022 / Notices 

12 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)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5See Securities and Exchange Act No. 93097 

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

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– 

Phlx–2022–13 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–Phlx–2022–13. 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–Phlx–2022–13 and should 

be submitted on or before April 22, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06853 Filed 3–31–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94528; File No. SR– 

CboeBZX–2022–022] 

Self-Regulatory Organizations; Cboe 

BZX 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 and 

Move Those Rules From Interpretation 

and Policy .02 of Rule 2.5 to Proposed 

Rule 2.16 and To Amend Related 

Registration Requirements Provided 

Under Various Interpretations and 

Policies of Rule 2.5 

March 28, 2022. 

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 March 15, 

2022, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(the ‘‘SEC’’ or ‘‘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 ‘‘noncontroversial’’ 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

rules relating to the Continuing 

Education for Registered Persons and 

move those rules from Interpretation 

and Policy .02 of Rule 2.5 to proposed 

Rule 2.16 and to amend related 

registration requirements provided 

under various Interpretations and 

Policies of Rule 2.5. 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://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), 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 

(i) Existing CE Program Background 

The continuing education program for 

registered persons of broker-dealers 

(‘‘CE Program’’) generally requires 

registered persons to complete 

continuing education consisting of a 

Regulatory Element. The Regulatory 

Element is delivered through a webbased delivery method called ‘‘CE 

Online,’’ which is administered through 

the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) online 

continuing education system, and 

focuses on regulatory requirements and 

industry standards. The CE Program for 

registered persons is currently codified 

under Interpretation and Policy .02 of 

Exchange Rule 2.5. The Exchange now 

proposes to expand the CE Program to 

adopt rules pertaining to a Firm Element 

component of continuing education. 

The Firm Element would be provided 

by each firm and focus on securities 

products, services and strategies the 

firm offers, firm policies and industry 

trends. In addition, the Exchange 

proposes other changes to amend, move, 

reorganize and enhance its rules 

regarding its CE Program, as described 

below. 

The Commission recently approved a 

proposal submitted by FINRA relating to 

its CE Program.5 The Exchange 


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2021) (SR–FINRA–2021–015) (Order Approving a 

Proposed Rule Change To Amend FINRA Rules 

1210 (Registration Requirements) and 1240 

(Continuing Education Requirements)). 

6See FINRA Regulatory Notice 21–41 (November 

17, 2021). 

7An individual’s initial annual Regulatory 

Element due date will be December 31, 2023. 

8See Rule 2.5.02(a). An individual’s registration 

anniversary date is generally the date they initially 

registered in the Central Registration Depository 

(‘‘CRD®’’) system. However, an individual’s 

registration anniversary date would be reset if the 

individual has been out of the industry for two or 

more years and is required to requalify by 

examination, or obtain an examination waiver, in 

order to reregister. An individual’s registration 

anniversary date would also be reset if the 

individual obtains a conditional examination 

waiver that requires them to complete the 

Regulatory Element by a specified date. Nonregistered individuals who are participating in the 

waiver program under proposed Rule 2.5.07 

(Waiver of Examinations for Individuals Working 

for a Financial Services Industry Affiliate of a 

Member) (‘‘FSAWP participants’’) are also subject to 

the Regulatory Element. See also proposed Rule 

2.16(a)(5) (Definition of Covered Person). The 

Regulatory Element for FSAWP participants 

correlates to their most recent registration(s), and it 

must be completed based on the same cycle had 

they remained registered. FSAWP participants are 

eligible for a single, fixed seven-year waiver period 

from the date of their initial designation, subject to 

specified conditions. Registered persons who 

become subject to a significant disciplinary action, 

as specified in proposed Rule 2.16(a)(2) 

(Disciplinary Actions), may be required to retake 

the Regulatory Element within 120 days of the 

effective date of the disciplinary action, if they 

remain registered. Further, their cycle for 

participation in the Regulatory Element may be 

adjusted to reflect the effective date of the 

disciplinary action rather than their registration 

anniversary date. 

9See Rule 2.5.02(b). 

10Supra note 8. Individuals must complete the 

entire Regulatory Element session to be considered 

to have ‘‘completed’’ the Regulatory Element; 

partial completion is the same as non-completion. 

11See Rule 2.5.02(b). This CE inactive two-year 

period is calculated from the date such persons 

become CE inactive, and it continues to run 

regardless of whether they terminate their 

registrations before the end of the two-year period. 

Therefore, if registered persons terminate their 

registrations while in a CE inactive status, they 

must satisfy all outstanding Regulatory Element 

prior to the end of the CE inactive two-year period 

in order to reregister with a Member without having 

to requalify by examination or having to obtain an 

examination waiver. 

12The S101 (General Program for Registered 

Persons) and the S201 (Registered Principals and 

Supervisors). 

13The current content is presented in a single 

format leading individuals through a case that 

provides a story depicting situations that they may 

encounter in the course of their work. 

14See Rule 2.5.02(d). The two-year qualification 

period is calculated from the date individuals 

terminate their registration and the date the 

Exchange receives a new application for 

registration. The two-year qualification period does 

not apply to individuals who terminate a limited 

registration category that is a subset of a broader 

registration category for which they remain 

qualified. Such individuals have the option of 

reregistering in the more limited registration 

category without having to requalify by 

examination or obtain an examination waiver so 

long as they continue to remain qualified for the 

broader registration category. Further, the two-year 

qualification period only applies to the 

representative- and principal-level examinations; it 

does not extend to the Securities Industry Essentials 

(‘‘SIE’’) examination. The SIE examination is valid 

for four years, but having a valid SIE examination 

alone does not qualify an individual for registration 

as a representative or principal. Individuals whose 

registrations as representatives or principals have 

been revoked pursuant to Exchange Rule 8.11 

(Judgment and Sanction) may only requalify by 

retaking the applicable representative- or principallevel examination in order to reregister as 

representatives or principals, in addition to 

satisfying the eligibility conditions for association 

with a firm. Waivers are granted on a case-by-case 

basis under Rule 2.5.01(b). 

understands that other exchanges have 

or will propose similar amendments 

based on FINRA’s rule changes. 

Therefore, the Exchange proposes to 

amend and enhance its own CE Program 

as provided under proposed Rule 2.16 

and its related registration requirements 

as provided under various 

Interpretations and Policies of Rule 2.5 

in response to FINRA’s amended CE 

Program and to facilitate compliance 

with the Exchange’s CE Program 

requirements by members of multiple 

exchanges. The Exchange proposes to 

implement the proposed rule changes to 

align with FINRA’s CE Program 

implementation dates.6 Specifically, the 

proposed implementation dates are as 

follows: Changes relating to proposed 

Rule 2.16(c) (Continuing Education 

Program for Persons Maintaining Their 

Qualification Following the 

Termination of a Registration Category) 

will become effective March 15, 2022; 

changes to recognize waiver of 

examination programs for individuals 

working for a financial services industry 

affiliate of a member that are 

administered by the Exchange’s 

affiliates, Cboe Exchange, Inc. (‘‘Cboe’’) 

and Cboe C2 Exchange, Inc. (‘‘C2’’), and 

by FINRA (referred to as the ‘‘FSA 

waiver programs’’ or ‘‘FSAWPs’’) will 

become effective March 15, 2022; and 

all other changes, including changes 

reflected in proposed Rules 2.16(a) 

(Regulatory Element) 7 and 2.16(b) (Firm 

Element) will become effective January 

1, 2023. 

a. Regulatory Element 

Interpretation and Policy .02(a) of 

Rule 2.5 currently requires a registered 

person to complete the applicable 

Regulatory Element initially within 120 

days after the person’s second 

registration anniversary date and, 

thereafter, within 120 days after every 

third registration anniversary date.8 The 

Exchange may extend these time frames 

for good cause shown.9 Unless 

otherwise determined, any registered 

persons who have not completed the 

Regulatory Element of the program 

within the prescribed time frames will 

have their registration(s) deemed 

inactive and will be designated as ‘‘CE 

inactive’’ in the CRD system until the 

requirements of the Regulatory Element 

have been satisfied.10 A CE inactive 

person is prohibited from performing, or 

being compensated for, any activities 

requiring registration, including 

supervision. Moreover, if registered 

persons remain CE inactive for two 

consecutive years, they must requalify 

by retaking required examinations (or 

obtain a waiver of the applicable 

qualification examinations).11

The Regulatory Element currently 

consists of a subprogram for registered 

persons generally, and a subprogram for 

principals and supervisors.12 While 

some of the current Regulatory Element 

content is unique to particular 

registration categories, most of the 

content has broad application to both 

representatives and principals.13 The 

Regulatory Element was originally 

designed at a time when most 

individuals had to complete the 

Regulatory Element at a test center, and 

its design was shaped by the limitations 

of the test center-based delivery model. 

In 2015, the delivery of the Regulatory 

Element was transitioned to an online 

platform, referred to above as CE 

Online, which allows individuals to 

complete the content online at a 

location of their choosing, including 

their private residence. This online 

delivery provides for much greater 

flexibility in updating content in a 

timelier fashion, developing content 

tailored to each registration category 

and presenting the material in an 

optimal learning format. 

b. Firm Element 

As noted above, Exchange Rules do 

not currently provide for a Firm 

Element of the CE Program. However, as 

discussed in more detail further below, 

the Exchange is now proposing to 

introduce a Firm Element, which would 

be modeled after FINRA Rule 1240 and 

Cboe Rule 3.33(c). 

c. Termination of a Registration 

Currently, individuals whose 

registrations as representatives or 

principals have been terminated for two 

or more years may reregister as 

representatives or principals only if they 

requalify by retaking and passing the 

applicable representative- or principallevel examination or if they obtain a 

waiver of such examination(s) (the 

‘‘two-year qualification period’’).14 The 

two-year qualification period was 

intended to ensure that individuals who 


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15When other self-regulatory organizations’ CE 

Programs were originally adopted in 1995, 

registered persons were required to complete the 

Regulatory Element on their second, fifth and 10th 

registration anniversary dates. See Securities 

Exchange Act Release No. 35341 (February 8, 1995), 

60 FR 8426 (February 14, 1995) (Order Approving 

File Nos. SR–AMEX–94–59; SR–CBOE–94–49; SR– 

CHX–94–27; SR–MSRB–94–17; SR–NASD–94–72; 

SR–NYSE–94–43; SR–PSE–94–35; and SR–PHLX– 

94–52). The change to the current three-year cycle 

in the other self-regulatory organizations’ CE 

Programs was made in 1998 to provide registered 

persons more timely and effective training, 

consistent with the overall purpose of the 

Regulatory Element. See Securities Exchange Act 

Release No. 39712 (March 3, 1998), 63 FR 11939 

(March 11, 1998) (Order Approving File Nos. SR– 

CBOE–97–68; SR–MSRB–98–02; SR–NASD–98–03; 

and SR–NYSE–97–33). 

16See proposed Rules 2.16(a)(1) and (a)(4). 

17See proposed Rules 2.5.04 and 2.16(a)(1). 

18See proposed Rules 2.16(a)(1) and (a)(4). 

19See proposed Rule 2.16(a)(1). 

20See proposed Rule 2.16(a)(4). 

21See proposed Rule 2.16(a)(2). 

22 Id. The proposed rule change provides that the 

request for an extension of time must be in writing 

and include supporting documentation, which is 

consistent with current practice. 

23 Id. 

24 Id. 

25 Id. 

26See proposed Rule 3.33(a)(4). 

27See proposed Rule 3.33(a)(5). 

reregister are relatively current on their 

regulatory and securities knowledge. 

(ii) Proposed Rule Change 

After extensive work with the 

Securities Industry/Regulatory Council 

on Continuing Education (‘‘CE 

Council’’), FINRA, other Self-Regulatory 

Organizations and industry participants, 

the Exchange proposes the following 

changes to the Exchange’s CE Program 

under Rule 2.5 and proposed Rule 2.16 

to align with FINRA Rule 1240 and 

Cboe Rule 3.33. 

a. Transition to Annual Regulatory 

Element for Each Registration Category 

As noted above, currently, the 

Regulatory Element generally must be 

completed every three years, and the 

content is broad in nature. Based on 

changes in technology and learning 

theory, the Regulatory Element content 

can be updated and delivered in a 

timelier fashion and tailored to each 

registration category, which would 

further the goals of the Regulatory 

Element.15 Therefore, to provide 

registered persons with more timely and 

relevant training on significant 

regulatory developments, the Exchange 

proposes adopting Rule 2.16(a) to 

require registered persons to complete 

the Regulatory Element annually by 

December 31.16 The proposed 

amendment would also require 

registered persons to complete 

Regulatory Element content for each 

representative or principal registration 

category that they hold, which would 

also further the goals of the Regulatory 

Element.17

Under the proposed rule change, 

Members would have the flexibility to 

require their registered persons to 

complete the Regulatory Element sooner 

than December 31, which would allow 

Members to coordinate the timing of the 

Regulatory Element with other training 

requirements, including the Firm 

Element.18 For example, a Member 

could require its registered persons to 

complete both their Regulatory Element 

and Firm Element by October 1 of each 

year. 

Individuals who would be registering 

as a representative or principal for the 

first time on or after the implementation 

date of the proposed rule change would 

be required to complete their initial 

Regulatory Element for that registration 

category in the next calendar year 

following their registration.19 In 

addition, subject to specified 

conditions, individuals who would be 

reregistering as a representative or 

principal on or after the implementation 

date of the proposed rule change would 

also be required to complete their initial 

Regulatory Element for that registration 

category in the next calendar year 

following their reregistration.20

Consistent with current requirements, 

individuals who fail to complete their 

Regulatory Element within the 

prescribed period would be 

automatically designated as CE 

inactive.21 However, the proposed rule 

change preserves the Exchange’s ability 

to extend the time by which a registered 

person must complete the Regulatory 

Element for good cause shown.22

The Exchange also proposes adopting 

Rule 2.16(a) to provide that: (1) 

Individuals who are designated as CE 

inactive would be required to complete 

all of their pending and upcoming 

annual Regulatory Element, including 

any annual Regulatory Element that 

becomes due during their CE inactive 

period, to return to active status; 23 (2) 

the two-year CE inactive period is 

calculated from the date individuals 

become CE inactive, and it continues to 

run regardless of whether individuals 

terminate their registrations; 24 (3) 

individuals who become subject to a 

significant disciplinary action may be 

required to complete assigned 

continuing education content as 

prescribed by the Exchange; 25 (4) 

individuals who have not completed 

any Regulatory Element content for a 

registration category in the calendar 

year(s) prior to reregistering would not 

be approved for registration for that 

category until they complete that 

Regulatory Element content, pass an 

examination for that registration 

category or obtain an unconditional 

examination waiver for that registration 

category, whichever is applicable; 26 and 

(5) the Regulatory Element requirements 

apply to individuals who are registered, 

or in the process of registering, as a 

representative or principal.27

Under the proposed rule change, the 

amount of content that registered 

persons would be required to complete 

in a three-year, annual cycle for a 

particular registration category is 

expected to be comparable to what most 

registered persons are currently 

completing every three years. In some 

years, there may be more required 

content for some registration categories 

depending on the volume of rule 

changes and regulatory issues. In 

addition, an individual who holds 

multiple registrations may be required 

to complete additional content 

compared to an individual who holds a 

single registration because, as noted 

above, individuals would be required to 

complete content specific to each 

registration category that they hold. 

However, individuals with multiple 

registrations would not be subject to 

duplicative regulatory content in any 

given year. The more common 

registration combinations would likely 

share much of their relevant regulatory 

content each year. For example, 

individuals registered as General 

Securities Representatives and General 

Securities Principals would receive the 

same content as individuals solely 

registered as General Securities 

Representatives, supplemented with a 

likely smaller amount of supervisoryspecific content on the same topics. The 

less common registration combinations 

may result in less topic overlap and 

more content overall. 

b. Adoption of Firm Element, 

Recognition of Other Training 

Requirements for Firm Element, and 

Application of Firm Element to Covered 

Registered Persons 

The Exchange proposes to adopt 

proposed Rule 2.16(b) to include a Firm 

Element component for its CE Program 

that aligns with Cboe Rule 3.33(b) and 

FINRA Rule 1240(b). The proposed rule 

would require Members to maintain a 

continuing and current education 

program for its registered persons to 

enhance their securities knowledge, 

skills and professionalism. At a 

minimum, each Member would be 

required to at least annually evaluate 

and prioritize its training needs and 

develop a written training plan. The 


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28See proposed Rule 2.16(b)(2)(D). 

29The group of persons who may be considered 

a ‘‘covered registered person’’ under the Firm 

Element provisions in proposed Rule 2.16(b)(1) is 

a subset of the group of persons who may be 

considered a ‘‘covered person’’ under the 

Regulatory Element provisions in proposed Rule 

2.15(a)(5). 

30See proposed Rule 2.16(c)(1). 

31See proposed Rule 2.16(c)(2). 

32See proposed Rule 2.16(c)(3). However, upon a 

participant’s request and for good cause shown, the 

Exchange would have the ability to grant an 

extension of time for the participant to complete the 

prescribed continuing education. A participant who 

is also a registered person must directly request an 

extension of the prescribed continuing education 

from the Exchange. 

33See proposed Rule 2.16(c). 

34See proposed Rule 2.16(c)(4) and (c)(5). 

35See proposed Rules 2.16(c)(1) and (c)(6). 

Individuals who are subject to a statutory 

disqualification would not be eligible to enter the 

proposed continuing education program. 

Individuals who become subject to a statutory 

disqualification while participating in the proposed 

continuing education program would not be eligible 

to continue in the program. Further, any content 

completed by such participants would be 

retroactively nullified upon disclosure of the 

statutory disqualification. The following example 

illustrates the application of the proposed rule 

change to individuals who become subject to a 

statutory disqualification while participating in the 

proposed continuing education program. Individual 

A participates in the proposed continuing 

education program for four years and completes the 

prescribed content for each of those years. During 

year five of his participation, he becomes subject to 

a statutory disqualification resulting from a foreign 

regulatory action. In that same year, the Exchange 

receives a Form U4 submitted by a member on 

behalf of Individual A requesting registration with 

the Exchange. The Form U4 discloses the statutory 

disqualification event. The Exchange would then 

retroactively nullify any content that Individual A 

completed while participating in the proposed 

continuing education program. Therefore, in this 

example, in order to become registered with the 

Exchange, he would be required to requalify by 

examination. This would be in addition to 

satisfying the eligibility conditions for association 

with a Member. See also Exchange Act Sections 

3(a)(39) and 15(b)(4). 

36See proposed Rule 2.16.01. Such individuals 

would be required to elect whether to participate 

by the March 15, 2022 implementation date of the 

proposed rule change. If such individuals elect to 

participate, they would be required to complete 

their initial annual content by the end of 2022 (i.e., 

the end of the calendar year in which the proposed 

rule change is implemented). In addition, if such 

individuals elect to participate, their initial 

participation period would be adjusted based on the 

date that their registration was terminated. 

plan must take into consideration the 

Member’s size, organizational structure, 

and scope of business activities, as well 

as regulatory developments and the 

performance of registered persons in the 

Regulatory Element. If a Member’s 

analysis determines a need for 

supervisory training for persons with 

supervisory responsibilities such 

training must be included in the 

Member’s training plan. The proposed 

rule would also require that programs 

used to implement a Member’s training 

plan must be appropriate for the 

business of the Member and, at a 

minimum, must cover training topics 

related to the role, activities or 

responsibilities of the registered person 

and to professional responsibility. In 

addition, the proposed rule would 

provide that each Member must 

administer its continuing education 

Firm Element program in accordance 

with its annual evaluation and written 

plan and must maintain records 

documenting the content of the 

programs and completion of the 

programs by registered persons. 

To align the Firm Element 

requirement with other required 

training, proposed Rule 2.16(b) would 

also expressly allow Members to 

consider training relating to the AML 

compliance program and the annual 

compliance meeting toward satisfying 

an individual’s annual Firm Element 

requirement.28 The Exchange also 

proposes to apply the Firm Element 

requirement to ‘‘covered registered 

persons,’’ which would include any 

person registered with a Member, 

including person who is permissively 

registered as a representative or 

principle pursuant to proposed Rule 

2.5.08, as discussed below, thereby 

aligning the description of ‘‘covered 

registered persons’’ in the Firm Element 

requirement with the description of 

‘‘covered persons’’ in the Regulatory 

Element requirement.29

c. Maintenance of Qualification After 

Termination of Registration 

The Exchange proposes to adopt 

Rules 2.16(c), 2.16.01, and 2.16.02 to 

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 continuing education. The 

proposed rule change would not 

eliminate the two-year qualification 

period. Rather, it would provide such 

individuals an alternative means of 

staying current on their regulatory and 

securities knowledge following the 

termination of a registration(s). Eligible 

individuals who elect not to participate 

in the proposed continuing education 

program would continue to be subject to 

the current two-year qualification 

period. The proposed rule change is 

generally aligned with other 

professional continuing education 

programs that allow individuals to 

maintain their qualification to work in 

their respective fields during a period of 

absence from their careers (including an 

absence of more than two years) by 

satisfying continuing education 

requirements for their credential. 

The proposed rule change would 

impose the following conditions and 

limitations: 

• Individuals would be required to be 

registered in the terminated registration 

category for at least one year 

immediately prior to the termination of 

that category; 30

• individuals could elect to 

participate when they terminate a 

registration or within two years from the 

termination of a registration; 31

• individuals would be required to 

complete annually all prescribed 

continuing education; 32

• individuals would have a maximum 

of five years in which to reregister; 33

• individuals who have been CE 

inactive for two consecutive years, or 

who become CE inactive for two 

consecutive years during their 

participation, would not be eligible to 

participate or continue; 34 and 

• individuals who are subject to a 

statutory disqualification, or who 

become subject to a statutory 

disqualification following the 

termination of their registration or 

during their participation, would not be 

eligible to participate or continue.35

The proposed rule change also 

includes a look-back provision that 

would, subject to specified conditions, 

extend the proposed 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 prior to the March 

15, 2022 implementation date of the 

proposed rule change; and (ii) 

individuals who have been FSWAP 

participants immediately prior to the 

March 15, 2022 implementation date of 

the proposed rule change.36 With 

respect to the FSAWP, the Exchange 

itself does not have an FSW waiver 

program. However, the Exchange 

proposes to recognize waivers granted to 

individuals who are designated as 

participants in, and satisfying the 

conditions of, the FSW waiver 

program(s) of Cboe, C2 and/or FINRA, 

and also to make the look-back 

provision for the new maintaining 

qualifications requirements available to 

individuals who are participants in the 

FSA waiver programs of Cboe, C2 and/ 

or FINRA immediately preceding March 

15, 2022. The Exchange understands 

that, effective March 15, 2022, Cboe, C2 

and FINRA do not plan to accept any 

new initial designations for individuals 

under their respective FSA waiver 

programs. Thus, what will remain of 

those programs will only be applicable 

to pre-existing participants. The 

Exchange also understands that, 


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37See proposed Rules 2.5.07 and 2.16.01. 

38See proposed Rule 2.16.02. 

39See The Female Face of Family Caregiving 

(November 2018), available at https://

www.nationalpartnership.org/our-work/resources/ 

economic-justice/femaleface-family-caregiving.pdf. 

40See The COVID–19 Recession is the Most 

Unequal in Modern U.S. History (September 30, 

2020), available at https://

www.washingtonpost.com/graphics/2020/business/ 

coronavirus-recessionequality/ and 

Unemployment’s Toll on Older Workers Is Worst in 

Half a Century (October 21, 2020), available at 

https://www.aarp.org/work/working-at-50-plus/ 

info-2020/pandemic-unemployment-older-workers/. 

ultimately, the FSA waiver programs 

will expire in favor of the maintenance 

of qualification requirements under the 

Cboe, C2 and FINRA Rules, for which 

the Exchange’s maintenance of 

qualification requirements under 

proposed are modeled.37

In addition, the proposed rule change 

includes a re-eligibility provision that 

would allow individuals to regain 

eligibility to participate each time they 

reregister with a Member for a period of 

at least one year and subsequently 

terminate their registration, provided 

that they satisfy the other participation 

conditions and limitations.38 The 

proposed rule change will have several 

important benefits. It will provide 

individuals with flexibility to address 

life and career events and necessary 

absences from registered functions 

without having to requalify each time. It 

will also incentivize them to stay 

current on their respective securities 

industry knowledge following the 

termination of any of their registrations. 

The continuing education under the 

proposed option will be as rigorous as 

the continuing education of registered 

persons, which promotes investor 

protection. Further, the proposed rule 

change will enhance diversity and 

inclusion in the securities industry by 

attracting and retaining a broader and 

diverse group of professionals. 

Significantly, the proposed rule 

change will be of particular value to 

women, who continue to be the primary 

caregivers for children and aging family 

members and, as a result, are likely to 

be absent from the industry for longer 

periods.39 In addition, the proposed rule 

change will provide longer-term relief 

for women, individuals with low 

incomes and other populations, 

including older workers, who are at a 

higher risk of a job loss during certain 

economic downturns and who are likely 

to remain unemployed for longer 

periods.40

d. Other Changes to Exchange Rule 2.5 

The Exchange proposes to adopt 

Rules 2.5.05 through 2.5.07 to conform 

to Cboe Rules 3.30.07 through 3.30.09, 

respectively, and to adopt Rule 2.5.08 to 

conform to Cboe Rule 3.30.02. Further, 

based on the Exchange’s proposal to 

move the subject matter of current Rule 

2.5.02 to proposed Rule 2.16, the 

Exchange also proposes to renumber 

various Interpretations and Policies 

under Rule 2.5 accordingly. The 

Exchange proposes to adopt Rule 2.5.05 

to provide that all registered 

representatives and principals must 

satisfy the regulatory element of 

continuing education. Specifically, 

proposed Rule 2.5.05 provides that all 

registered representatives and 

principals, including those individuals 

who solely maintain permissive 

registrations pursuant to proposed Rule 

2.5.08 shall satisfy the Regulatory 

Element of continuing education for 

each representative or principal 

registration category that they hold as 

specified in Rule 2.5.01(i). If a person 

registered with a Member has a 

continuing education deficiency with 

respect to that registration as provided 

under proposed Rule 2.16, such person 

shall not be permitted to be registered 

in another registration category under 

Rule 2.5.01(i) with that Member or to be 

registered in any registration category 

under Rule 2.5.01(i), with another 

Member, until the person has satisfied 

the deficiency. 

The Exchange also proposes to adopt 

Rule 2.5.06 to address lapses of 

registrations and expirations of the SIE. 

Specifically, proposed Rule 2.5.06 

would provide that any person who was 

last registered in a representative 

registration category two or more years 

immediately preceding the date of 

receipt by the Exchange of a new 

application for registration in that 

registration category shall be required to 

pass a representative qualification 

examination appropriate to that 

registration category as specified in Rule 

2.5.01(i), unless the person has 

maintained his or her qualification 

status for that registration category in 

accordance with proposed Rule 2.16(c) 

or as otherwise permitted by the 

Exchange. In addition, any person who 

last passed the SIE or who was last 

registered as a representative, whichever 

occurred last, four or more years 

immediately preceding the date of 

receipt by the Exchange of a new 

application for registration as a 

representative shall be required to pass 

the SIE in addition to a representative 

qualification examination appropriate to 

his or her category of registration as 

specified in Rule 2.5.01(i). Any person 

who was last registered in a principal 

registration category two or more years 

immediately preceding the date of 

receipt by the Exchange of a new 

application for registration in that 

registration category shall be required to 

pass a principal qualification 

examination appropriate to that 

registration category as specified in Rule 

2.5.01(i), unless the person has 

maintained his or her qualification 

status for the registration category in 

accordance with proposed Rule 2.16(c) 

or as otherwise permitted by the 

Exchange. Any person whose 

registration has been revoked and any 

person who has a continuing education 

deficiency for a period of two years as 

provided under Rule 2.5.01(i) shall be 

required to pass a representative or 

principal qualification examination 

appropriate to his or her category of 

registration as specified in Rule 

2.5.01(i), to be eligible for registration 

with the Exchange. Finally, for purposes 

of Rule 2.5.06, an application shall not 

be considered to have been received by 

the Exchange if that application does 

not result in a registration. 

The Exchange proposes to adopt Rule 

2.5.07 which, as discussed above, would 

recognize a waiver for participants in 

the financial services industry affiliate 

waiver program(s) of Cboe, C2 and/or 

FINRA. Specifically, Rule 2.5.07 would 

provide that upon request by a Member, 

the Exchange shall waive the applicable 

qualification examination(s) for an 

individual designated as a participant 

in, and satisfying the conditions of, the 

FSA waiver program(s) of Cboe under 

its Rule 3.30.09, C2 under its Chapter 3, 

Section B, and/or FINRA under its Rule 

2110.09. 

By way of background, very generally, 

these FSA waiver programs provide that 

a member of Cboe, C2 or FINRA, 

respectively, may request that the 

exchange/FINRA waive the applicable 

qualification examination(s) for an 

individual designated with it as working 

for a financial services industry affiliate 

of a member if the following conditions 

are met: 

• Prior to the individual’s initial 

designation, the individual was 

registered as a representative or 

principal with Cboe, C2 or FINRA, as 

applicable, for a total of five years 

within the most recent 10 year period, 

including for the most recent year with 

the member that initially designated the 

individual; 

• The waiver request is made within 

seven years of the individual’s initial 

designation; 

• The initial designation and any 

subsequent designation(s) were made 

concurrently with the filing of the 

individual’s related Form U5; 

• The individual continuously 

worked for the financial services 


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41 15 U.S.C. 78f(b). 

42 15 U.S.C. 78f(b)(5). 

43 Id. 

44Supra note 5. 

industry affiliate(s) of a member since 

the individual’s last Form U5 filing; 

• The individual has complied with 

the Regulatory Element of continuing 

education as specified in the Cboe, C2 

or FINRA Rules, as applicable; and 

• The individual does not have any 

pending or adverse regulatory matters, 

or terminations, that are reportable on 

the Form U4, and has not otherwise 

been subject to a statutory 

disqualification as defined in Section 

3(a)(39) of the Exchange Act while the 

individual was designated as eligible for 

a waiver. 

As used in Rule 2.5.07, a ‘‘financial 

services industry affiliate’’ is a legal 

entity that controls, is controlled by or 

is under common control with a 

member and is regulated by the SEC, 

CFTC, state securities authorities, 

federal or state banking authorities, state 

insurance authorities, or substantially 

equivalent foreign regulatory 

authorities. 

Last, the Exchange proposes to adopt 

Rule 2.5.08, which would provide for 

permissive registrations. Specifically, 

proposed Rule 2.5.08 would provide 

that a Member may make application for 

or maintain the registration as a 

representative or principal of any 

associated person of a Member and any 

individual engaged in the securities 

business of a foreign securities affiliate 

or subsidiary of the Member. 

Individuals maintaining such 

permissive registrations shall be 

considered registered persons and 

subject to all Exchange rules, to the 

extent relevant to their activities. 

Consistent with the requirements of the 

Exchange’s supervision rules, Members 

shall have adequate supervisory systems 

and procedures reasonably designed to 

ensure that individuals with permissive 

registrations do not act outside the 

scope of their assigned functions. With 

respect to an individual who solely 

maintains a permissive registration(s), 

the individual’s direct supervisor shall 

not be required to be a registered 

person. However, for purposes of 

compliance with the Exchange’s 

supervision rules, a Member shall assign 

a registered supervisor who shall be 

responsible for periodically contacting 

such individual’s direct supervisor to 

verify that the individual is not acting 

outside the scope of his or her assigned 

functions. If such individual is 

permissively registered as a 

representative, the registered supervisor 

shall be registered as a representative or 

principal. If the individual is 

permissively registered as a principal, 

the registered supervisor shall be 

registered as a principal. Moreover, the 

registered supervisor of an individual 

who solely maintains a permissive 

registration(s) shall not be required to be 

registered in the same representative or 

principal registration category as the 

permissively-registered individual. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.41 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 42 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 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 43 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that the 

proposal to move to an annual 

Regulatory Element training with 

content tailored to an individual’s 

representative or principal registration 

categories is designed to protect 

investors and is in the public interest. 

As noted in the order approving the 

similar changes to the FINRA CE 

Program,44 the Commission found that 

‘‘the rule is reasonably designed to 

minimize the potential adverse impact 

on firms and their registered persons. 

Furthermore, increasing the timeliness 

of registered persons’ training, as well as 

the relevance of the training’s content 

by tailoring it to each registration 

category that they hold, would enhance 

their education and compliance with 

their regulatory obligations.’’ 

The Exchange believes that the 

proposed changes to the Regulatory 

Element and the proposal to adopt the 

Firm Element portions of its CE Program 

will ensure that all registered persons 

receive timely and relevant training, 

which will, in turn, enhance 

compliance and investor protection. 

Further, the Exchange believes that 

establishing a path for individuals to 

maintain their qualification following 

the termination of a registration will 

reduce unnecessary impediments to 

requalification and promote greater 

diversity and inclusion in the securities 

industry without diminishing investor 

protection. 

The Exchange also believes that the 

proposed rule change will bring 

consistency and uniformity with Cboe’s 

and FINRA’s recently amended CE 

Program rules, which will, in turn, 

assist Members and their associated 

persons in complying with these rules 

and improve regulatory efficiency. The 

proposed rule changes conform certain 

of the Exchange’s continuing education 

and registration rules to align them with 

rules of Cboe, which will, in turn, 

prevent unnecessary regulatory burdens 

and to promote efficient administration 

of the rules. Finally, the proposed 

amendment also makes minor updates 

and corrections to the Exchange’s rules 

which improve readability. 

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 and Cboe, 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 


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19152 Federal Register / Vol. 87, No. 63 / Friday, April 1, 2022 / Notices 

45 15 U.S.C. 78s(b)(3)(A)(iii). 

46 17 CFR 240.19b–4(f)(6). 

47 17 CFR 240.19b–4(f)(6)(iii). 

48For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. See 15 U.S.C. 

78c(f). 49 17 CFR 200.30–3(a)(12). 

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 45 and Rule 19b– 

4(f)(6) thereunder.46

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii), 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 

this proposed rule change may become 

operative immediately upon filing. In 

addition, Rule 19b–4(f)(6)(iii) 47 requires 

a self-regulatory organization to give the 

Commission written notice of its intent 

to file a proposed rule change under that 

subsection at least five business days 

prior to the date of filing, or such 

shorter time as designated by the 

Commission. The Exchange has 

provided such notice. 

Waiver of the 30-day operative delay 

would allow the Exchange to implement 

proposed changes to its Continuing 

Education Rules by March 15, 2022 to 

coincide with one of FINRA’s 

announced implementation dates, 

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 Members 

of the Exchange that are also FINRA 

members. For this reason, the 

Commission believes that waiver of the 

30-day operative delay for this proposal 

is consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.48

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– 

CboeBZX–2022–022 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–CboeBZX–2022–022. 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 (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–CboeBZX–2022–022 and 

should be submitted on or before April 

22, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.49

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–06851 Filed 3–31–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

TIME AND DATE: Notice is hereby given, 

pursuant to the provisions of the 

Government in the Sunshine Act, Public 

Law 94–409, that the Securities and 

Exchange Commission will hold an 

Open Meeting on Wednesday, April 6, 

2022 at 10:00 a.m. 

PLACE: The meeting will be webcast on 

the Commission’s website at 

www.sec.gov. 

STATUS: The meeting will begin at 10:00 

a.m. (ET) and will be open to the public 

via webcast on the Commission’s 

website at www.sec.gov. 

MATTERS TO BE CONSIDERED: 1. The 

Commission will consider whether to 

propose rules under the Securities 

Exchange Act of 1934 for the 

registration and regulation of securitybased swap execution facilities 

(‘‘SBSEFs’’) and related matters. The 

proposed rules would also address the 

cross-border application of registration 

and execution requirements for securitybased swaps. Additionally, the 

Commission will consider whether to 

propose rules designed to mitigate 

conflicts of interest at SBSEFs and 

national securities exchanges that trade 

security-based swaps. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information and to ascertain 

what, if any, matters have been added, 

deleted or postponed, please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Authority: 5 U.S.C. 552b. 

Dated: March 30, 2022. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2022–07068 Filed 3–30–22; 4:15 pm] 

BILLING CODE 8011–01–P 


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