[Federal Register Volume 86, Number 119 (Thursday, June 24, 2021)]
[Notices]
[Pages 33427-33439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13286]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92183; File No. SR-FINRA-2021-015]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend 
FINRA Rules 1210 (Registration Requirements) and 1240 (Continuing 
Education Requirements)

June 15, 2021.
    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 June 3, 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. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

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[[Page 33428]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to amend FINRA Rule 1240 (Continuing Education 
Requirements). The proposed rule change also makes conforming 
amendments to FINRA Rule 1210 (Registration Requirements). Among other 
changes, the proposed rule change requires that the Regulatory Element 
of continuing education be completed annually rather than every three 
years and provides a path through continuing education for individuals 
to maintain their qualification following the termination of a 
registration.
    The text of the proposed rule change is available on FINRA's 
website at http://www.finra.org, at the principal office of FINRA 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, 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
(i) Background
    The continuing education program for registered persons of broker-
dealers (``CE Program'') currently requires registered persons to 
complete continuing education consisting of a Regulatory Element and a 
Firm Element. The Regulatory Element, which is administered by FINRA, 
focuses on regulatory requirements and industry standards, while the 
Firm Element is provided by each firm and focuses on securities 
products, services and strategies the firm offers, firm policies and 
industry trends. The CE Program is codified under the rules of the 
self-regulatory organizations (``SROs''). The CE Program for registered 
persons of FINRA members is codified under Rule 1240.\3\
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    \3\ See also Rule 1210.07 (All Registered Persons Must Satisfy 
the Regulatory Element of Continuing Education).
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a. Regulatory Element
    Rule 1240(a) (Regulatory Element) 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.\4\ FINRA may extend these time frames for good cause shown.\5\ 
Registered persons who have not completed the Regulatory Element within 
the prescribed time frames will have their FINRA registrations deemed 
inactive and will be designated as ``CE inactive'' in the CRD system 
until the requirements of the Regulatory Element have been 
satisfied.\6\ A CE inactive person is prohibited from performing, or 
being compensated for, any activities requiring FINRA 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).\7\
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    \4\ See Rules 1240(a)(1) (Requirements) and (a)(4) 
(Reassociation in a Registered Capacity). An individual's 
registration anniversary date is generally the date they initially 
registered with FINRA in the Central Registration Depository 
(``CRD[supreg]'') 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. Non-registered individuals who are participating in the waiver 
program under Rule 1210.09 (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 Rule 1240(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 Rule 1240(a)(3) (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.
    \5\ See Rule 1240(a)(2) (Failure to Complete).
    \6\ See supra note 5. 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.
    \7\ 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.
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    The Regulatory Element consists of a subprogram for registered 
persons generally, and a subprogram for principals and supervisors.\8\ 
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.\9\
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    \8\ The S101 (General Program for Registered Persons) and the 
S201 (Registered Principals and Supervisors).
    \9\ The 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.
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    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, 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. This online delivery 
provides FINRA with 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
    Rule 1240(b) (Firm Element) currently requires each firm to develop 
and administer an annual Firm Element training program for covered 
registered persons.\10\ The rule requires firms to conduct an annual 
needs analysis to determine the appropriate training.\11\ Currently, at 
a minimum, the Firm Element must cover training in ethics and 
professional responsibility as well as the following items concerning 
securities products, services and strategies offered by the member: (1) 
General investment features and associated risk factors; (2) 
suitability and sales practice considerations; and (3) applicable 
regulatory requirements.\12\
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    \10\ The rule defines ``covered registered persons'' as any 
registered person who has direct contact with customers in the 
conduct of a member's securities sales, trading and investment 
banking activities, any individual who is registered as an 
Operations Professional or a Research Analyst, and the immediate 
supervisors of any such persons. See Rule 1240(b)(1) (Persons 
Subject to the Firm Element).
    \11\ See Rule 1240(b)(2) (Standards for the Firm Element).
    \12\ See supra note 11.
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    A firm, consistent with its needs analysis, may determine to apply

[[Page 33429]]

toward the Firm Element other required training. The current rule does 
not expressly recognize other required training, such as training 
relating to the anti-money laundering (``AML'') compliance program and 
training relating to the annual compliance meeting,\13\ for purposes of 
satisfying Firm Element training.
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    \13\ See FINRA Rules 3310(e) and 3110(a)(7).
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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 principal-level examination 
or if they obtain a waiver of such examination(s) (the ``two-year 
qualification period'').\14\ The two-year qualification period was 
adopted prior to the creation of the CE Program and was intended to 
ensure that individuals who reregister are relatively current on their 
regulatory and securities knowledge.
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    \14\ See Rule 1210.08 (Lapse of Registration and Expiration of 
SIE). The two-year qualification period is calculated from the date 
individuals terminate their registration and the date FINRA 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. For instance, it would not 
apply to an individual who maintains his registration as a General 
Securities Representative but who terminates his registration as an 
Investment Company and Variable Contracts Products Representative. 
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 FINRA 
Rule 8310 (Sanctions for Violation of the Rules) may only requalify 
by retaking the applicable representative- or principal-level 
examination in order to reregister as representatives or principals, 
in addition to satisfying the eligibility conditions for association 
with a firm. Waivers are granted either on a case-by-case basis 
under Rule 1210.03 (Qualification Examinations and Waivers of 
Examinations) or as part of the waiver program under Rule 1210.09.
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(ii) Proposed Rule Change
    After extensive work with the Securities Industry/Regulatory 
Council on Continuing Education (``CE Council'') and discussions with 
stakeholders, including industry participants and the North American 
Securities Administrators Association (``NASAA''), FINRA proposes the 
following changes to the CE Program under Rule 1240.\15\
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    \15\ The proposed changes are based on the CE Council's 
September 2019 recommendations to enhance the CE Program. See 
Recommended Enhancements for the Securities Industry Continuing 
Education Program, available at http://cecouncil.org/media/266634/council-recommendations-final-.pdf. The CE Council is composed of 
securities industry representatives and representatives of SROs. The 
CE Council was formed in 1995 upon a recommendation from the 
Securities Industry Task Force on Continuing Education and was 
tasked with facilitating the development of uniform continuing 
education requirements for registered persons of broker-dealers.
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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.\16\ Therefore, to provide registered persons with 
more timely and relevant training on significant regulatory 
developments, FINRA proposes amending Rule 1240(a) to require 
registered persons to complete the Regulatory Element annually by 
December 31.\17\ 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.\18\
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    \16\ When the CE Program was 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 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).
    \17\ See proposed Rules 1240(a)(1) and (a)(4). Some commenters 
supported the proposed change to an annual requirement, while others 
disagreed with it or expressed concerns with the burdens it would 
impose on firms and registered persons. See infra Item II.C.(a) and 
(b)(i).
    \18\ See proposed Rules 1210.07 and 1240(a)(1). Commenters 
generally supported the development of tailored content that is 
specific to each registration category. See infra Item II.C.(a). 
However, some commenters questioned whether there would be 
sufficient content for certain registration categories in a given 
year, while others were concerned that some individuals could be 
subject to duplicate or excessive content. See infra Item II.C.(a) 
and (b)(i).
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    Under the proposed rule change, firms would have the flexibility to 
require their registered persons to complete the Regulatory Element 
sooner than December 31, which would allow firms to coordinate the 
timing of the Regulatory Element with other training requirements, 
including the Firm Element.\19\ For example, a firm could require its 
registered persons to complete both their Regulatory Element and Firm 
Element by October 1 of each year.
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    \19\ See proposed Rules 1240(a)(1) and (a)(4).
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    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.\20\ 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.\21\
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    \20\ See proposed Rule 1240(a)(1).
    \21\ See proposed Rule 1240(a)(4).
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    Consistent with current requirements, individuals who fail to 
complete their Regulatory Element within the prescribed period would be 
automatically designated as CE inactive.\22\ However, the proposed rule 
change preserves FINRA's ability to extend the time by which a 
registered person must complete the Regulatory Element for good cause 
shown.\23\
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    \22\ See proposed Rule 1240(a)(2). In Regulatory Notice 20-05 
(February 2020), FINRA had proposed a 15-day grace period prior to 
being designated as CE inactive, provided that the member documented 
the reasons for the individual's failure to complete the Regulatory 
Element within the prescribed calendar year and retained the 
documentation for recordkeeping purposes. Some commenters noted that 
the proposed grace period would increase administrative and 
operational burdens, while one commenter requested that FINRA 
provide a longer grace period. See infra Item II.C.(b)(i). FINRA has 
determined to eliminate the proposed grace period to avoid any 
unnecessary burdens.
    \23\ See supra note 22. The proposed rule change clarifies that 
the request for an extension of time must be in writing and include 
supporting documentation, which is consistent with current practice.
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    FINRA also proposes amending Rule 1240(a) to clarify 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

[[Page 33430]]

period, to return to active status; \24\ (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; \25\ (3) individuals who become subject to a significant 
disciplinary action may be required to complete assigned continuing 
education content as prescribed by FINRA; \26\ (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; \27\ and (5) the 
Regulatory Element requirements apply to individuals who are 
registered, or in the process of registering, as a representative or 
principal.\28\ In addition, FINRA proposes making conforming amendments 
to Rule 1210.07.
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    \24\ See supra note 22.
    \25\ See supra note 22.
    \26\ See proposed Rule 1240(a)(3). As previously noted, Rule 
1240(a)(3) currently provides that such individuals may be required 
to retake the Regulatory Element. See supra note 4.
    \27\ See proposed Rule 1240(a)(4).
    \28\ See proposed Rule 1240(a)(5).
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    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.\29\ 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.\30\ 
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 supervisory-specific content on the same topics. The less 
common registration combinations may result in less topic overlap and 
more content overall.
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    \29\ As previously noted, some commenters questioned whether 
there would be sufficient annual content for certain registration 
categories and some commenters were concerned that some individuals 
might be subject to duplicate or excessive content on an annual 
basis. See supra note 18; see infra Item II.C.(a) and (b)(i).
    \30\ As discussed in the economic impact assessment, individuals 
with multiple registrations represent a smaller percentage of the 
population of registered persons.
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b. Recognition of Other Training Requirements for Firm Element and 
Extension of Firm Element to All Registered Persons
    To better align the Firm Element requirement with other required 
training, FINRA proposes amending Rule 1240(b) to expressly allow firms 
to consider training relating to the AML compliance program and the 
annual compliance meeting toward satisfying an individual's annual Firm 
Element requirement.\31\ FINRA also proposes amending the rule to 
extend the Firm Element requirement to all registered persons, 
including individuals who maintain solely a permissive registration 
consistent with Rule 1210.02 (Permissive Registrations), thereby 
further aligning the Firm Element requirement with other broadly-based 
training requirements.\32\ In conjunction with this proposed change, 
FINRA proposes modifying the current minimum training criteria under 
Rule 1240(b) to instead provide that the training must cover topics 
related to the role, activities or responsibilities of the registered 
person and to professional responsibility.\33\
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    \31\ See proposed Rule 1240(b)(2)(D). Commenters overwhelmingly 
supported this proposed change. See infra Item II.C.(b)(ii).
    \32\ See proposed Rule 1240(b)(1). As noted earlier, the current 
requirement only applies to ``covered registered persons'' and not 
all registered persons. Not all commenters agreed with this proposed 
change. See infra Item II.C.(b)(ii).
    \33\ See proposed Rule 1240(b)(2)(B). In Regulatory Notice 20-
05, FINRA had proposed to retain the current minimum training 
criteria under Rule 1240(b)(2)(B). One commenter stated that the 
current criteria is overly prescriptive and that the requirement 
should be more flexible. See infra Item II.C.(b)(ii). FINRA is 
revising the rule in response.
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c. Maintenance of Qualification After Termination of Registration
    FINRA proposes adopting paragraph (c) under Rule 1240 and 
Supplementary Material .01 and .02 to Rule 1240 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.\34\ 
The proposed rule change would not eliminate the two-year qualification 
period.\35\ 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.
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    \34\ Commenters overwhelmingly supported this proposed change. 
See infra Item II.C.(b)(iii). The proposed option would also be 
available to individuals who terminate any permissive registrations 
as provided under Rule 1210.02. However, the proposed option would 
not be available to individuals who terminate a limited registration 
category that is a subset of a broader registration category for 
which they remain qualified. As previously noted, such individuals 
currently 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. In addition, the 
proposed option would not be available to individuals who are 
maintaining an eliminated registration category, such as the 
category for Corporate Securities Representative, or individuals who 
have solely passed the Securities Industry Essentials examination, 
which does not, in and of itself, confer registration.
    \35\ One commenter requested that FINRA eliminate the two-year 
qualification period. See infra Item II.C.(b)(iii).
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    The proposed rule change would impose the following conditions and 
limitations:
    <bullet> 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; \36\
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    \36\ See proposed Rule 1240(c)(1).
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    <bullet> individuals could elect to participate when they terminate 
a registration or within two years from the termination of a 
registration; \37\
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    \37\ See proposed Rule 1240(c)(2). Individuals who elect to 
participate at the later date would be required to complete, within 
two years from the termination of their registration, any continuing 
education that becomes due between the time of their Form U5 
(Uniform Termination Notice for Securities Industry Registration) 
submission and the date that they commence their participation. In 
addition, FINRA would enhance its systems to notify individuals of 
their eligibility to participate, enable them to affirmatively opt 
in, and notify them of their annual continuing education requirement 
if they opt in.

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[[Page 33431]]

    <bullet> individuals would be required to complete annually all 
prescribed continuing education; \38\
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    \38\ See proposed Rule 1240(c)(3). However, upon a participant's 
request and for good cause shown, FINRA 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 FINRA. The continuing education 
content for participants would consist of a combination of 
Regulatory Element content and content selected by FINRA and the CE 
Council from the Firm Element content catalog discussed below. One 
commenter suggested that the content, subject matter and volume of 
training be the same for both participants and registered persons. 
See infra Item II.C.(b)(iii). The content would correspond to the 
registration category for which individuals wish to maintain their 
qualifications. Participants who are maintaining their qualification 
status for a principal registration category that includes one or 
more corequisite representative registrations must also complete 
required annual continuing education for the corequisite 
registrations in order to maintain their qualification status for 
the principal registration category. In Regulatory Notice 20-05, 
FINRA had proposed that participants complete the prescribed 
continuing education annually. The proposed rule change clarifies 
that the prescribed continuing education must be completed by 
December 31 of the calendar year, which is consistent with the 
timing for the proposed annual Regulatory Element.
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    <bullet> individuals would have a maximum of five years in which to 
reregister; \39\
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    \39\ See proposed Rule 1240(c). As described in greater detail 
in Item II.C. of this filing, in Regulatory Notice 20-05, FINRA had 
proposed a seven-year participation period, and some commenters 
suggested that there should not be any time limit on the 
participation period. See infra Item II.C.(b)(iii). However, based 
on discussions with NASAA and its support for a participation period 
of five years, the proposed rule change provides a five-year 
participation period in the interest of consistency and promoting 
registration efficiency. See infra Item II.C.(b)(iii). The proposed 
five-year participation period would continue to serve the diversity 
and inclusion goals of the proposed rule change. In addition, 
individuals applying for reregistration must satisfy all other 
requirements relating to the registration process (e.g., submit a 
Form U4 (Uniform Application for Securities Industry Registration or 
Transfer) and undergo a background check).
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    <bullet> 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; \40\ 
and
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    \40\ See proposed Rules 1240(c)(4) and (c)(5).
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    <bullet> 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.\41\
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    \41\ See proposed Rules 1240(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, FINRA receives a Form U4 submitted by a member on behalf 
of Individual A requesting registration with FINRA. The Form U4 
discloses the statutory disqualification event. FINRA 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 
FINRA, he would be required to requalify by examination. This would 
be in addition to satisfying the eligibility conditions for 
association with a FINRA member firm. See Exchange Act Sections 
3(a)(39) and 15(b)(4) and Article III of the FINRA By-Laws.
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    The proposed rule change also includes a look-back provision that 
would, subject to specified conditions, extend the proposed option to 
individuals who have been registered as a representative or principal 
within two years immediately prior to the implementation date of the 
proposed rule change and individuals who have been FSAWP participants 
immediately prior to the implementation date of the proposed rule 
change.\42\
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    \42\ See proposed Supplementary Material .01 to Rule 1240. Such 
individuals would be required to elect whether to participate by the 
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 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. The current waiver program for FSAWP participants would 
not be available to new participants upon implementation of the 
proposed rule change. See proposed Rule 1210.09. However, 
individuals who are FSAWP participants immediately prior to the 
implementation date of the proposed rule change could elect to 
continue in that waiver program until the program has been retired. 
As noted above, FSAWP participants may participate for up to seven 
years in that waiver program, subject to specified conditions. See 
supra note 4. In Regulatory Notice 20-05, FINRA had proposed to 
eliminate the FSAWP given that the participation period of seven 
years for FSAWP participants would have been the same for 
participants in the proposed continuing education program. As 
discussed above, the proposed rule change provides a five-year 
participation period for participants in the proposed continuing 
education program. So as not to disadvantage FSAWP participants, 
FINRA has determined to preserve that waiver program for individuals 
who are participating in the FSAWP immediately prior to the 
implementation date of the proposed rule change. Because the 
proposed rule change transitions the Regulatory Element to an annual 
cycle, FSAWP participants who remain in that waiver program 
following the implementation of the proposed rule change would be 
subject to an annual Regulatory Element requirement. See proposed 
Rule 1240(a)(1). Finally, the proposed rule change preserves FINRA's 
ability to extend the time by which FSAWP participants must complete 
the Regulatory Element for good cause shown. See proposed Rule 
1240(a)(2).
---------------------------------------------------------------------------

    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 firm for a period of at 
least one year and subsequently terminate their registration, provided 
that they satisfy the other participation conditions and 
limitations.\43\ Finally, FINRA proposes making conforming amendments 
to Rule 1210, including adding references to proposed Rule 1240(c) 
under Rule 1210.08.
---------------------------------------------------------------------------

    \43\ See proposed Supplementary Material .02 to Rule 1240.
---------------------------------------------------------------------------

    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. Moreover, if the proposed rule change 
is implemented, FINRA will evaluate its efficacy following 
implementation to ensure that it is meeting its goals.
    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.\44\ 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.\45\
---------------------------------------------------------------------------

    \44\ See The Female Face of Family Caregiving (November 2018), 
available at https://www.nationalpartnership.org/our-work/resources/economic-justice/female-face-family-caregiving.pdf.
    \45\ See 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-recession-equality/ 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.

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[[Page 33432]]

d. Other Enhancements to CE Program
    FINRA and the CE Council also plan to enhance the CE Program in 
other ways.\46\ FINRA will work with the CE Council to incorporate a 
variety of instructional formats to present the Regulatory Element 
content. In addition, FINRA will work with the CE Council to publish in 
advance the Regulatory Element learning topics for the next year.\47\ 
This will allow firms to review the Regulatory Element topics when 
developing their Firm Element training plan to avoid unnecessary 
duplication of topics. The proposed transition to an annual Regulatory 
Element requirement would increase the number of registered persons who 
would be required to complete the Regulatory Element on an annual 
basis. To assist compliance with this proposed change, FINRA would 
enhance its systems to provide firms and registered persons with 
additional notification, management and tracking functionality. In 
response to comments, FINRA would also make the Regulatory Element 
available via a mobile compatible format.\48\
---------------------------------------------------------------------------

    \46\ These additional enhancements do not require any changes to 
the FINRA rules. Most commenters supported these enhancements, while 
some commenters had concerns and questions. See infra Item 
II.C.(b)(iv).
    \47\ If there are any other critical rule changes or other 
regulatory developments that arise during a given year, FINRA and 
the CE Council will work to provide registered persons timely and 
sufficient training on such rule changes and developments.
    \48\ See infra Item II.C.(b)(i).
---------------------------------------------------------------------------

    FINRA and the CE Council also will improve the guidance and 
resources available to firms to develop effective Firm Element training 
programs, such as updated guidance for developing and documenting 
training plans and specific principles. Further, FINRA and the CE 
Council will develop a catalog of continuing education content that 
would serve as an optional resource for firms to select relevant Firm 
Element content and create learning plans for their registered persons. 
The catalog would include content developed by third-party training 
providers, FINRA and the other SROs participating in the CE Program. 
Firms would have the option of using the content in the catalog for 
purposes of their Firm Element training; they would not be obligated to 
select content from the catalog.
    If the Commission approves the proposed rule change, FINRA will 
announce the implementation dates of the proposed rule change in a 
Regulatory Notice to be published no later than 90 days following 
Commission approval.
2. Statutory Basis
    The proposed rule change is consistent with the provisions of 
Section 15A(b)(6) of the Act,\49\ which requires, among other things, 
that FINRA rules must be designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest, and Section 15A(g)(3) of the Act,\50\ which authorizes 
FINRA to prescribe standards of training, experience and competence for 
persons associated with FINRA members.
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78o-3(b)(6).
    \50\ 15 U.S.C. 78o-3(g)(3).
---------------------------------------------------------------------------

    FINRA believes that the proposed changes to the Regulatory Element 
and Firm Element will ensure that all registered persons receive timely 
and relevant training, which will, in turn, enhance compliance and 
investor protection. Further, FINRA 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.

B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change would result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. All members would be subject to 
the proposed rule change.
Economic Impact Assessment
    FINRA has undertaken an economic impact assessment, as set forth 
below, to further 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 its regulatory objective.
Regulatory Need
    FINRA is proposing to make changes to the CE Program, including the 
related FINRA rules, as part of ongoing efforts to address and 
implement the CE Council's recommendations. As described above, the 
proposed rule change focuses on: (1) Ensuring that all registered 
persons receive relevant and sufficient Regulatory Element and Firm 
Element training on an annual basis; (2) providing a path through 
continuing education for individuals to maintain their qualification 
following the termination of a registration; and (3) providing firms 
with the guidance and resources necessary to design effective and 
efficient Firm Element training programs.
    The proposed rule change is expected to result in a more efficient 
CE Program that addresses relevant regulatory requirements and provides 
individuals with improved tools and resources to understand and comply 
with such requirements, enhancing investor protection. Moreover, the 
proposed rule change would provide new channels for individuals to 
maintain their qualification status for a terminated registration 
category and, in so doing, could increase the likelihood that 
professionals who need to step away from the industry for a period 
could return, subject to satisfying all other requirements relating to 
the registration process.
Economic Baseline
    The economic baseline for the proposed rule change is the existing 
CE Program. As described above, registered persons of broker-dealers 
are required to participate in continuing education consisting of a 
Regulatory Element and a Firm Element. The Regulatory Element is 
generally delivered every three years and focuses on regulatory 
requirements and industry standards, while the Firm Element is an 
annual requirement and focuses on securities products, services and 
strategies firms offer, firm policies and industry trends.
    As stated above, under the current regime, individuals generally 
have a two-year window from the termination of their association with a 
member to reregister without requalifying by examination or obtaining a 
waiver. According to FINRA's analysis, the total number of registered 
persons, approximately 620,000, has shown a slow decrease over the past 
few years even as individual registered persons regularly change their 
status by ending and renewing their association with a firm.\51\ Across 
this pool of registered persons, approximately 65% hold only one FINRA 
registration category (for example either a General Securities 
Representative (Series 7) registration or an Investment Company and 
Variable Contracts Products Representative (Series 6) registration), 
25% hold two FINRA registrations (for example a General Securities 
Representative

[[Page 33433]]

registration and an Investment Banking Representative registration), 
and the remainder hold three FINRA registrations or more. Moreover, 
across the pool of registered persons, in addition to the FINRA 
registration, approximately 90% hold at least one state registration, 
and 50% hold more than five state registrations. With respect to 
registration with a FINRA member, in recent years, out of the 
approximately 620,000 registered persons, approximately 90,000 end 
their registration with all firms with whom they are registered at some 
point during the year. Out of these, about half do not renew their 
registration and are considered to have left the securities industry.
---------------------------------------------------------------------------

    \51\ The number of registered persons has been decreasing at an 
annual rate of approximately 1% per year. See, e.g., 2020 FINRA 
Industry Snapshot, available at https://www.finra.org/rules-guidance/guidance/reports-studies/2020-industry-snapshot.
---------------------------------------------------------------------------

    Under the current baseline, registered persons who terminate a 
registration are given a two-year grace period in which they can 
reregister without being required to retake a qualification examination 
or obtain an examination waiver. Individuals who seek to reregister 
more than two years after terminating their association are required to 
requalify by passing an examination or obtaining an examination waiver. 
Requalification imposes costs in the form of time spent preparing for 
and taking the 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. FINRA 
understands anecdotally that these costs currently deter some 
significant portion of the population that give up their registrations 
from reregistering.
    Figure 1, as an example, presents a plot of the number of 
registered persons that reregister within a given number of years after 
having terminated their registrations for at least 60 days.\52\ The 
focus is on registered persons who terminated their registrations in 
either 2007, 2008 or 2009 and the period of time until they reregister 
with the same or a different firm.\53\ Each bar in Figure 1 represents 
a 100-day period and, roughly speaking, three-and-a-half bars represent 
one year. As can be observed in Figure 1, for all three origination 
years, there is an increase in the number of previously registered 
persons who reregister towards the end of the second year from their 
date of termination. This is consistent with the incentive in the 
current rule permitting individuals to reregister without having to 
requalify by passing an examination or having to obtain an examination 
waiver (i.e., the current two-year qualification period) and supports 
the assumption that the requalification process imposes direct and 
indirect economic costs. After this point, there is a significant drop 
in the number of individuals who reregister.
---------------------------------------------------------------------------

    \52\ The minimum 60 days for employment gap follows the 
definition used in the 2020 FINRA Industry Snapshot, available at 
https://www.finra.org/rules-guidance/guidance/reports-studies/2020-industry-snapshot.
    \53\ The period of 2007-2009 covers the events before, during 
and after the 2008 financial crisis. These events had an effect on 
the number of individuals leaving the industry, which indeed rose 
during this period. However, the trends observed for these years do 
not appear to be extreme outliers and, moreover, potentially reflect 
changes in labor markets that the proposed rule change is targeting. 
Further, the three years selected for the analysis provide the means 
to study the trends of individuals returning to the industry for up 
to a period of 10 years of being away from it.
---------------------------------------------------------------------------

    Moreover, following the end of the second year after terminating 
their registrations, the number of individuals reregistering remains 
low and tapers off slowly. Finally, an analysis of the stage in the 
Regulatory Element cycle at which registered persons terminate their 
registrations, on average, across the time period of 2007-2016, 
suggests that registered persons who terminate their registrations tend 
to do so approximately 530 days before their next Regulatory Element 
would be due (i.e., on average in the middle of a current three-year 
Regulatory Element cycle).
[GRAPHIC] [TIFF OMITTED] TN24JN21.001

    Figure 1: Plot of the number of previously registered persons that 
reregister within a given number of years after having terminated their 
registrations for at least 60 days in either 2007, 2008 or 2009. Each 
bar represents 100 days, and every year is accordingly represented by 
approximately three-and-a-half bars.

[[Page 33434]]

    With respect to firms, the economic baseline is derived from the 
current processes and procedures used to implement the existing CE 
Program. Firms are currently responsible for the appropriate monitoring 
of the compliance of their registered persons with the three-year 
Regulatory Element cycle and for administering the annual Firm Element. 
Further, firms may experience material negative impact where 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.
Economic Impacts
    FINRA believes that economic impacts of the proposed rule change 
would result in both benefits and costs to firms and registered persons 
and would potentially benefit the investor community. FINRA will 
undertake an evaluation of the efficacy of the program within a 
reasonable period following the implementation date. The aim of such an 
evaluation is to ensure that the program is meeting its goals and 
objectives, without resulting in unintended diminished investor 
protections, or unintended increase in regulatory burden on any 
relevant parties.
Anticipated Benefits
    FINRA believes that the proposed rule change would result in two 
main benefits to registered persons.
    First, as discussed above, the proposed rule change would 
transition the Regulatory Element from a three-year requirement to an 
annual requirement. Such an annual requirement is implemented for other 
professionals, such as Certified Public Accountants (``CPAs''), 
Chartered Financial Analysts (``CFAs'') and lawyers.\54\ The 2015 
transition to CE Online resulted in a more efficient program and added 
a new dimension of flexibility to the CE Program in terms of the 
content, timing and availability of the program. This change would 
allow the Regulatory Element to focus on current issues and recent 
regulatory changes and enhance registered persons' understanding of the 
changes through more frequent assessments. A transition to an annual 
cycle is expected to benefit registered persons by helping to ensure 
that they understand recent regulatory changes and are thus able to 
perform their work in a compliant and effective manner. Under the 
current program, a regulatory change could take place in the beginning 
of a three-year Regulatory Element cycle and thus result in some 
portion of the individuals in that cycle being assessed on their 
knowledge of the change at a significantly later date.
---------------------------------------------------------------------------

    \54\ In general, the CFA requires 20 hours of continuing 
education on an annual basis. See CFA's Continuing Education (CE) 
Program, available at https://www.cfainstitute.org/en/membership/professional-development/pl. The American Institute of CPAs 
(``AICPA'') requires 120 credit hours of continuing education over a 
three-year period, with the requirement of 40 credit hours per year. 
See AICPA's Continuing Professional Education (CPE) Requirements for 
CPAs, available at https://www.aicpa.org/cpe-learning/cperequirements.html. The continuing education requirement for 
lawyers is different across states, but it generally ranges between 
10-15 credit hours per year. See https://www.americanbar.org/content/dam/aba/directories/policy/aba_model_rule_comparison_by_state_meet_model_rule_noted.pdf. None 
of these three professions requires members to be active 
practitioners to maintain their credentials.
---------------------------------------------------------------------------

    Second, FINRA believes that a significant benefit of the proposed 
rule change for registered persons would be the increased flexibility 
in terms of maintaining their qualification for a terminated 
registration category. As can be observed in Figure 1, there is an 
increase in the number of individuals who reregister towards the end of 
the two-year period, which is the current grace period for maintaining 
their qualification status. Extending this period to five years through 
the completion of continuing education would provide flexibility to 
individuals, as well as potentially result in increased retention of 
expertise in the industry.
    With respect to increased flexibility, extending the current two-
year period to five years would allow individuals to manage significant 
life events, including professional changes and development (such as 
pursuing educational goals, a career change to a role in the firm that 
is not part of the broker-dealer, working overseas for an extended 
period due to a career change or an attempt at a different career path) 
or personal life events (such as birth or adoption of a child, 
unexpected loss in the family or relocation due to family needs).\55\ 
Through discussions with industry representatives, FINRA has learned 
that the proposed rule change could potentially lower the barrier to 
reentry to the industry. Some firms indicated that a significant 
benefit may arise in cases where an individual leaves the broker-dealer 
to gain experience in an affiliate of a parent company, for instance in 
an affiliated commercial bank, investment adviser or foreign affiliate. 
Other firms indicated that the proposed rule change could potentially 
be relevant for under-represented populations in the securities 
industry, such as, for example, female registrants.\56\
---------------------------------------------------------------------------

    \55\ See, e.g., Christy Spivey, Time Off at What Price? The 
Effects of Career Interruptions on Earnings, 59(1) Indus. & Lab. 
Rel. Rev. 119-140 (2005); Jill K. Hayter, Career Interrupted for 
What Reason? Job Interruptions and Their Wage Effects, 30(4) J. App. 
Bus. Res. 1197-1210 (2014). Spivey (2005) uses the National 
Longitudinal Survey of Youth (``NLSY'') data, and finds that the 
total time spent out of the labor force for men was 2.9 years on 
average, with a standard deviation of 3.7. The paper finds that 
women spent on average 5.3 years out of the labor force, with a 
standard deviation of 5.1. Finally, the paper reports that the 
average number of interruptions was 2.53 for women and 0.93 for men. 
Hayter (2014) also studies the NLSY data. The paper reports the 
percentage of women and men in the sample who experienced various 
types of employment disruptions, and the average cumulative length 
of disruptions by type, conditional on having at least one 
interruption. Non-family disruptions are found to have similar 
impacts across genders. However, women are much more likely (15% 
versus 2%) to experience family-related disruptions and the total 
reported length out of the work force resulting from the disruption 
is three times longer for women versus men (150 weeks versus 53 
weeks).
    \56\ FINRA has repeated the analysis presented in Figure 1, 
separating registered persons by gender. The analysis found that 
female registered persons are underrepresented, at an approximate 
ratio of one to four. With respect to the pattern of reregistering 
under the baseline that is presented in Figure 1, the analysis found 
that the pattern was similar for either male or female registered 
persons, when studied separately. However, this does not rule out 
that female registrants could especially benefit from the proposed 
rule change, for the reasons discussed above.
---------------------------------------------------------------------------

    With respect to firms, FINRA believes that the proposed rule change 
will result in three main benefits. First, FINRA believes that the 
transition to an annual Regulatory Element cycle will reduce firms' 
regulatory risk, as well as enhance compliance and reduce compliance-
related costs. This benefit would potentially result from the enhanced 
timeliness and relevance afforded by the proposed annual cycle.
    Second, the proposed rule change would further enhance and 
streamline the Firm Element requirement. These changes include an 
express recognition of existing firm training programs, such as the 
annual compliance meeting, toward satisfying a registered individual's 
Firm Element requirement, potentially saving firms compliance resources 
currently devoted to developing and implementing different training 
programs. In addition, in conjunction with the proposed rule change, 
FINRA and the CE Council would develop a content catalog, managed by 
FINRA, that would serve as an optional resource from which firms could 
select or supplement their Firm Element content.\57\ Such a catalog 
could provide firms with a more cost-efficient resource for Firm 
Element content.
---------------------------------------------------------------------------

    \57\ See supra Item II.A.1.(ii)d.
---------------------------------------------------------------------------

    Third, with respect to the extended time period for maintaining a 
qualification status, FINRA believes that

[[Page 33435]]

the proposed rule change could result in added flexibility for firms in 
terms of hiring qualified candidates. This could ultimately extend the 
potential pool of securities industry professionals and potentially 
benefit firms regardless of their size. Through discussions with 
industry representatives, FINRA has learned that this could permit 
firms to better retain skilled professionals, more easily provide 
individuals with professional development outside the broker-dealer, 
and facilitate the hiring process for experienced professionals who 
have required the career flexibility.
    In addition, FINRA believes that the investor community will 
ultimately benefit from the proposed rule change. These benefits will 
stem from the potential increase in the knowledge and ongoing training 
of registered persons, as well as through the increased flexibility of 
retention of skill and experience in the industry.
    Finally, FINRA notes that these benefits may be limited for 
individuals seeking to maintain FINRA and state registrations if there 
are significant differences between the relevant requirements across 
the various regulatory frameworks. For instance, currently, state 
regulators require an individual to retake examinations for terminated 
licenses after two years. Some individuals may be dissuaded from 
remaining in the industry where the state requirements are more binding 
than those proposed in this filing. Others may be dissuaded from taking 
advantage of the flexibility provided by the proposed rule change at 
the expense of other obligations. As discussed above, approximately 90% 
of registered individuals hold some combination of FINRA and state 
registrations. This may serve as an upper bound on an estimate of the 
proportion of the population that may be limited in the full advantages 
of the proposed rule change, depending on the combinations of 
registrations held and individual state rules.\58\
---------------------------------------------------------------------------

    \58\ As of November 2020, out of the approximately 620,000 FINRA 
registered persons, approximately 84% held a Series 7 or a Series 6. 
This population is expected to potentially be impacted by regulatory 
differences (or an estimate of the percentage of the relevant 
population that may be constrained by differences between FINRA and 
state rules). Further, approximately 78% of the total registered 
persons population have at least one state license. Depending on 
roles and responsibilities of FINRA registered persons, there is not 
always a state licensure requirement (specifically, non-customer-
facing roles). The anticipated benefits of the proposed rule change 
might be more fully achieved for these individuals. Finally, the 
impacts of the potential differences may be particularly pronounced 
in a few states that have more than 200,000 individuals licensed in 
them. For these states, approximately 90% of these individuals (on 
average across these states) hold a Series 7 or a Series 6.
---------------------------------------------------------------------------

Anticipated Costs
    FINRA believes that, alongside the anticipated benefits discussed 
above, the proposed rule change would also result in costs for both 
firms and registered persons.
    With respect to registered persons, FINRA anticipates three main 
costs that may result from the proposed rule change. First, the move to 
an annual Regulatory Element cycle will increase the frequency of the 
required training and the associated impact of failing to complete the 
annual content.\59\ Further, this anticipated increase in burdens is 
expected to be smaller for individuals with a single registration 
category than for individuals with more than one registration category. 
Individuals with more than one registration category (approximately 35% 
of registered persons) may have more Regulatory Element content 
(including the associated time commitment) in a given year, in 
comparison to individuals with only a single registration category. 
Second, the introduction of Regulatory Element notifications directly 
to registered persons could shift some of the time management burden to 
them. Third, the eligibility requirements for maintaining a 
qualification status for a terminated registration category will 
require an individual to have been registered with FINRA in that 
registration category for at least one year, which could limit 
potential career changes that may occur within a shorter period.
---------------------------------------------------------------------------

    \59\ However, as discussed above, 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. See supra Item II.A.1.(ii)a. Some 
commenters expressed concerns regarding the costs and burdens that 
the proposed annual requirement would impose on firms and registered 
persons. See infra Item II.C.(a) and (b)(i). FINRA recognizes that 
the transition to an annual Regulatory Element requirement may 
result in potential costs and burdens. However, FINRA believes that 
any such costs and burdens are appropriate and justified given the 
significant regulatory benefit of more tailored and timelier 
Regulatory Element. Further, FINRA believes that some of the 
potential costs and burdens would be mitigated by the proposed 
enhancements to the program.
---------------------------------------------------------------------------

    With respect to firms, FINRA anticipates some costs that may result 
from the proposed rule change. The transition to an annual Regulatory 
Element requirement could ultimately increase the administrative and 
operational burden on firms due to changes to compliance systems. This 
is anticipated in terms of the resources required to implement and 
monitor compliance with the program on an annual basis. These resources 
would also need to be potentially further increased to address the 
proposed extension of the Firm Element requirement to all registered 
persons.\60\
---------------------------------------------------------------------------

    \60\ Some commenters noted that the extension of the Firm 
Element to all registered persons could result in unnecessary costs 
and burdens, and they also noted that this proposed change could 
have a disparate impact on firms with large home offices and firms 
with large numbers of registered support staff and others holding 
permissive registrations. See infra Item II.C.(b)(ii).
---------------------------------------------------------------------------

    It is anticipated that costs stemming from the change to an annual 
Regulatory Element requirement will tend to increase with the number of 
representatives at a firm and thus be higher in aggregate at larger 
firms. However, economies of scale likely exist in the application of 
the proposed requirements. Thus, the average additional cost per 
representative at larger firms will likely be lower than that at 
smaller firms.\61\
---------------------------------------------------------------------------

    \61\ One commenter suggested that the transition to an annual 
Regulatory Element could increase administrative workloads and costs 
on smaller firms and independent contractors. See infra Item 
II.C.(b)(i).
---------------------------------------------------------------------------

Alternatives Considered
    FINRA has considered a range of alternatives in developing the 
proposed rule change. These included alternative frequency of the 
Regulatory Element requirement (periodic versus annual), alternative 
time periods for becoming eligible to maintain a qualification status 
for a terminated registration category (one year versus more than one 
year) and alternative time periods for maintaining a qualification 
status (seven years versus 10 or five years).
    The proposed rule change reflects a consideration of the various 
alternatives. Within each of these alternatives there is a trade-off 
between providing the flexibility to encourage more registered persons 
to remain in the industry when other, outside demands arise versus 
ensuring that those individuals are likely to be aware of current 
regulations and best practices. For example, with respect to 
maintaining qualifications, FINRA believes that a length of five years 
could achieve the main goals and anticipated benefits of the program. 
FINRA considered whether a seven-year period would better balance 
flexibility against investor protection risks. Such a seven-year period 
would also likely provide a reasonable upper limit on the length of the 
proposed requalification option, in so far as a longer period might 
erode the benefits of the proposed option. While the proposed 
participation period of five years may limit some individuals' ability 
to remain in the industry, it may better mitigate the impact of 
differences

[[Page 33436]]

with state licensing requirements.\62\ Considering the discussion above 
regarding economic impacts, issues stemming from other regulatory 
frameworks, as well as the views expressed by commenters in response to 
Regulatory Notice 20-05, including NASAA's support for a participation 
period of five years, FINRA believes that a five-year period is more 
appropriate.\63\
---------------------------------------------------------------------------

    \62\ Some commenters expressed support for an indefinite 
participation period. See infra Item II.C.(b)(iii).
    \63\ See infra Item II.C.(b)(iii).
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

(a) Comments Relating to Regulatory Notice 18-26
    In September 2018, the CE Council published an initial document 
outlining several potential enhancements to the CE Program under 
consideration by the CE Council. In support of the CE Council, FINRA 
published Regulatory Notice 18-26 (September 2018) (``Notice 18-26'') 
requesting comment on the potential enhancements. In response to Notice 
18-26, FINRA, on behalf of the CE Council, received 22 comment letters. 
A copy of Notice 18-26 is available on FINRA's website at http://www.finra.org. Copies of the comment letters received in response to 
Notice 18-26 are also available on FINRA's website.
    Most commenters generally supported the potential enhancements 
outlined by the CE Council. The commenters expressed overwhelming 
interest in implementing a mechanism for allowing previously registered 
individuals to maintain their qualification after the termination of 
their registrations for longer than the current two-year period. In 
addition, most commenters agreed that there is value in moving to an 
annual Regulatory Element requirement in order to provide registered 
persons with more timely and relevant education and training. However, 
many expressed concern that doing so could increase the administrative 
and operational burden on both firms and registered persons, 
particularly for firms with a narrowly focused business model (e.g., 
the sale of mutual funds and variable annuities). One commenter 
expressed concern that increasing the frequency of the Regulatory 
Element may exacerbate the existing burden on those without ready 
access to a high-speed internet connection, which is currently required 
for online access. Many commenters supported Regulatory Element content 
that is tailored and specific to each registration category rather than 
content that applies generally to all registered persons. Some of these 
commenters questioned whether there are sufficient regulatory 
developments occurring annually that would be relevant to individuals 
with limited registrations, such as registered persons engaged in the 
sale of mutual funds and variable annuities. Further, commenters widely 
supported the creation of a content catalog that firms could leverage 
for administering education and training for their Firm Element 
programs. Finally, several commenters requested more guidance on the 
Firm Element component, including express guidance that other training 
requirements may count toward satisfying the Firm Element requirement.
    Following a review of the public comments and further discussions 
with industry and SRO participants, in September 2019, the CE Council 
published its recommendations to enhance the CE Program.\64\ As 
previously noted, the proposed rule change is based on the CE Council's 
recommendations.\65\
---------------------------------------------------------------------------

    \64\ See supra note 15.
    \65\ See supra note 15.
---------------------------------------------------------------------------

(b) Comments Relating to Regulatory Notice 20-05
    The proposed rule change was published for comment in Regulatory 
Notice 20-05 (February 2020) (``Notice 20-05''). FINRA received 26 
comment letters in response to Notice 20-05. A copy of Notice 20-05 is 
available on FINRA's website at http://www.finra.org. Copies of the 
comment letters received in response to Notice 20-05 are also available 
on FINRA's website.\66\
---------------------------------------------------------------------------

    \66\ See SR-FINRA-2021-015 (Form 19b-4, Exhibit 2d) for a list 
of abbreviations assigned to commenters (available on FINRA's 
website at http://www.finra.org).
---------------------------------------------------------------------------

    Below is a summary of the comments on Notice 20-05 and FINRA's 
responses.
(i) Transition to Annual Regulatory Element for Each Registration 
Category
    Most of the commenters addressing the proposed annual Regulatory 
Element requirement supported the change. Some of these commenters 
qualified their support. ARM supported the proposed change if 
individuals with multiple registrations would not be subject to 
additional or duplicative requirements. SIFMA, Morgan Stanley, LPL and 
Fidelity suggested an annual ``cap'' on the number of modules that 
individuals must complete. Huntington was concerned about the potential 
increase in compliance and supervisory burdens and duplicative 
training. Monahan & Roth requested that the cost of the annual 
requirement be proportionately less. STANY requested that FINRA be 
mindful of the impact of costs and compliance efforts, especially for 
smaller firms.
    Further, Integrated Solutions suggested that registrations that 
have been held for longer periods be subject to less frequent 
Regulatory Element. CFA suggested that an individual's ``primary'' 
registration be subject to an annual requirement and that the 
individual's other registrations be subject to less frequent Regulatory 
Element. PFS requested that Investment Company and Variable Contracts 
Products Representatives be subject to less frequent Regulatory Element 
because there may not be enough material to develop annual content for 
such individuals. Morgan Stanley suggested that FINRA consider a phased 
approach followed by a cost-benefit analysis to further assess the 
impact of the transition. ARM and Foreside stated that the 15-day grace 
period for completing the Regulatory Element, which was originally 
proposed in Regulatory Notice 20-05, would increase administrative and 
operational burdens. Morgan Stanley requested that FINRA provide a 30-
day grace period. Morgan Stanley and SIFMA also requested that FINRA 
provide hiring firms with information regarding an individual's 
Regulatory Element status at the prehire stage, subject to the 
individual's consent.
    Several commenters did not support the proposed annual Regulatory 
Element requirement or raised other concerns with the proposed change. 
Executive Advisors, MML, Nationwide and Pacer did not support the 
proposed annual requirement. FSI stated that the proposed change would 
potentially increase administrative workloads and costs on smaller 
firms and independent contractors as well as duplicative training. FSI 
also requested clarification regarding the impact of a CE inactive 
status on an individual's state registrations, including advisory 
registrations, and adequate time for firms to implement the proposed 
rule change. PFS stated that the proposed change to an annual 
requirement would disparately impact those without broadband internet, 
which is currently required to complete the Regulatory Element.
    Registered persons would not be subject to duplicative regulatory 
content in any given year, regardless of how many registrations they 
hold. Further, FINRA does not believe that it is

[[Page 33437]]

necessary to establish an annual ``cap'' on the amount of regulatory 
content as suggested by some commenters. Rather, with respect to 
individuals who hold a significant number of registrations, FINRA and 
the CE Council would review the amount of content that such individuals 
would be required to complete each year and, if necessary, the amount 
would be adjusted so that it is reasonable and balanced. FINRA will 
file a separate proposed rule change to establish the session fee for 
the proposed annual Regulatory Element; we generally expect that the 
fee for the annual Regulatory Element would be reduced and be the same 
for all registered persons, regardless of the amount of content that 
they would be required to complete (that is, an individual who holds 
multiple registrations would be subject to the same annual fee as an 
individual who holds a single registration).
    FINRA believes that the implementation of less frequent Regulatory 
Element for certain registration categories or a phased implementation 
as suggested by some commenters would be overly complex and cause 
confusion. FINRA will work with the CE Council to ensure that there is 
sufficient and appropriate content for each registration category. With 
respect to the originally proposed 15-day grace period prior to being 
designated as CE inactive, FINRA has eliminated the grace period from 
the proposed rule change to avoid any unnecessary burdens on firms and 
registered persons, as was suggested by some commenters. However, the 
proposed rule change preserves the ability of a firm to request an 
extension of time for an individual, if necessary. In addition, as is 
currently the case, an individual's CE inactive status would impact the 
individual's ability to function in a FINRA-registered capacity. As is 
the case today, any questions regarding the impact of a CE inactive 
status on state registrations should be directed to the appropriate 
state securities regulator.
    Finally, in conjunction with the proposed rule change, FINRA would 
enhance its systems to reduce the overall burden on firms and 
registered persons. As part of these enhancements, FINRA would work 
with firms to determine what information would be helpful and 
appropriate prior to associating with or hiring individuals. FINRA 
would also provide firms with adequate time to implement the proposed 
rule change. Further, to mitigate any potential disparate impact on 
individuals who do not have ready access to a high-speed internet 
connection, FINRA would make the Regulatory Element available via a 
mobile compatible format.
(ii) Recognition of Other Training Requirements for Firm Element and 
Extension of Firm Element to All Registered Persons
    Commenters overwhelmingly supported the express recognition of AML 
compliance program training and annual compliance meeting training 
toward satisfying the Firm Element. Some of these commenters requested 
additional flexibility and clarification regarding the Firm Element 
requirement.
    Foreside requested that firms be provided with the flexibility to 
combine the requirements of the Regulatory Element, Firm Element and 
annual compliance meeting. Cambridge suggested that completion of 
additional modules of Regulatory Element be applied toward satisfying 
the Firm Element. Cambridge also recommended that ethics and 
professional responsibility training be included in the Regulatory 
Element rather than the Firm Element. Monahan & Roth stated that the 
current Firm Element training criteria is overly prescriptive and that 
the requirement should be more flexible, allowing firms to train to the 
scope of their business and changing environment. NRS stated that other 
training should count toward satisfying Firm Element training if the 
other training is applicable to an individual's job function. STANY 
requested that industry conferences count toward satisfying the Firm 
Element. SIFMA requested that firms should continue to have the 
flexibility to determine if leveraging other training makes sense given 
their business model and the flexibility to cover the topics in the 
Regulatory Element in Firm Element training. SIFMA also requested that 
the Firm Element requirement recognize the unique needs of limited 
purpose broker-dealers and suggested that Firm Element training be 
designed to apply to other professional designations or training 
requirements. NASAA stated that satisfaction of AML compliance program 
training or annual compliance meeting training alone should not satisfy 
Firm Element training.
    Not all commenters supported the extension of the Firm Element 
requirement to all registered persons. FSI and STANY recommended that 
it be optional for registered persons who are not currently covered 
under the rule. STANY stated that extending the requirement to 
individuals holding permissive registrations could create unnecessary 
burdens and discourage permissive registrations. LPL stated that the 
proposed change may result in unnecessary costs. MML stated that it 
would have a disparate impact on firms with large home offices. SIFMA 
stated that it would be overly burdensome, particularly for firms with 
large numbers of registered support staff and others holding permissive 
registrations who are not currently covered under the rule.
    The Regulatory Element cannot be combined with other training 
requirements. Registered persons must complete prescribed regulatory 
content provided by FINRA to establish that they have an appropriate 
level of knowledge relating to regulatory requirements. However, the 
Firm Element and annual compliance meeting may be combined, provided 
that the criteria for each requirement is satisfied.
    FINRA and the CE Council will consider the possibility of making 
additional Regulatory Element topics available to firms, which they 
could apply toward satisfying Firm Element training based on their 
needs analysis. FINRA and the CE Council will also consider whether 
ethics and professional responsibility training should be covered in 
the Regulatory Element.
    In response to comments, FINRA has revised the proposed rule change 
to replace the current prescriptive Firm Element criteria with a 
requirement that the training cover topics related to the role, 
activities or responsibilities of the registered person and to 
professional responsibility. Nothing in the proposed rule change would 
preclude firms from covering the Regulatory Element topics in their 
Firm Element training, consistent with their needs analysis. Further, 
consistent with their needs analysis, firms would continue to have the 
flexibility to determine whether other training, including industry 
conferences, may be applied toward the Firm Element. In addition, the 
CE Council will consider issuing best practices and guidance to help 
firms evaluate other financial industry continuing education programs 
for purposes of satisfying the Firm Element.
    The recognition of other training requirements toward satisfying 
the Firm Element would still require firms to conduct a needs analysis 
to determine the appropriateness of applying such other training toward 
the Firm Element. However, based on a needs analysis, a firm may 
determine that such other training requirements fully satisfy the Firm 
Element requirement. FINRA is not considering developing Firm Element 
training specifically to satisfy other professional designations or

[[Page 33438]]

training requirements, but some existing training is, and would 
continue to be, appropriate for both Firm Element and other 
professional requirements.
    The extension of the Firm Element requirement to all registered 
persons would ensure that firms enhance the securities knowledge, skill 
and professionalism of all registered persons, which is consistent with 
the overall goal of the Firm Element. It would also ensure that 
registered persons are provided more specific learning materials 
relevant to their day-to-day activities, which will provide each 
registered person a more complete training cycle. As indicated by 
commenters, some firms already require that all their registered 
persons complete Firm Element training. In addition, while firms with a 
larger number of registered persons, including individuals who are 
permissively registered, may incur additional burdens in implementing 
the proposed rule change, some of that burden would be mitigated based 
on the express recognition of other training requirements toward 
satisfying the Firm Element requirement. In some cases, registered 
persons may not have to complete any additional training beyond what 
they are required to complete today. For example, with respect to 
permissively registered persons working in a clerical or administrative 
capacity for a firm, the firm may determine, based on a needs analysis, 
that such individuals have satisfied the annual Firm Element 
requirement by participating in the firm-wide annual compliance 
meeting.
(iii) Maintenance of Qualification After Termination of Registration
    Commenters overwhelmingly supported the proposed change to provide 
individuals the option of maintaining their qualification following the 
termination of a registration by completing annual continuing 
education. Some commenters requested additional changes, which are 
discussed below.
    NASAA supported the goals of the proposed rule change, but it had 
concerns regarding the seven-year participation period originally 
proposed in Regulatory Notice 20-05. NASAA has expressed support for a 
participation period of five years. CFA, Fidelity, Foreside, Integrated 
Solutions and STANY stated that there should not be any time limit on 
the participation period. FSI, Foreside, MML, SIFMA and STANY requested 
that the proposed rule change also extend to state licenses.
    Cambridge suggested that the content, subject matter and volume of 
training be the same for both participants and registered persons. 
Cambridge also suggested that the learning topics for participants be 
available to firms so that they may elect to apply it to their 
registered persons. FSI recommended that individuals who elect to 
participate at a later date following their Form U5 submission should 
not be required to complete any content that is outdated. MML wanted to 
know what would happen if a participant misses an annual cycle. In 
addition, MML requested that individuals who became CE inactive within 
three years prior to the implementation date of the proposed rule 
change should be able to participate. SIFMA requested that hiring firms 
be provided with information regarding a participant's status. CFA 
recommended that the current two-year qualification period be 
eliminated.
    The proposed time limit for participation is necessary to ensure 
that previously registered individuals maintain an appropriate level of 
securities experience throughout their professional careers. FINRA 
believes that a seven-year period better serves the diversity and 
inclusion goals of the proposed rule change. However, FINRA also 
recognizes the benefits to the industry of having further alignment 
between FINRA qualification requirements and state licensing 
requirements. Therefore, in the interest of consistency and promoting 
registration efficiency, the proposed rule change provides individuals 
a maximum of five years in which to reregister, which will still serve 
the diversity and inclusion goals. As noted above, following 
implementation of the proposed rule change, FINRA will review the 
efficacy of the program, which will include a review of the 
participation period. In addition, FINRA will work with NASAA and state 
regulators to provide for an appropriate process and system support to 
allow states to track and process registration requests for individuals 
operating under the two- or five-year examination provisions.
    Participants, including registered persons who elect to participate 
for a terminated registration category, may be subject to more overall 
content compared to registered persons who are not participants because 
participants would be required to complete a minimum amount of non-
regulatory content selected by FINRA and the CE Council. FINRA and the 
CE Council will consider publishing the learning topics for 
participants for those firms that may elect to apply it to their 
registered persons. FINRA and the CE Council will also work to ensure 
that eligible individuals who elect to participate are not subject to 
outdated content.
    Participants who miss an annual cycle for a registration category 
would be provided with an opportunity to continue by completing any 
missed content, provided that the registration category has not been 
terminated for two or more years.\67\ Individuals who have been CE 
inactive for two consecutive years prior to the implementation date of 
the proposed rule change would not be eligible to participate because 
of the long lapse in continuing education. FINRA would work with firms 
to determine what information regarding a participant's status would be 
helpful and appropriate. The current two-year qualification period 
would not be eliminated because participation is optional and eligible 
individuals may elect not to participate.\68\
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    \67\ Participants who fail to complete the required annual 
content for a registration category that has been terminated for two 
or more years would not be eligible to continue. For example, if the 
proposed rule change were implemented on January 1, 2022, a 
participant who completes the required annual content for the 
General Securities Representative category in 2022, 2023 and 2024 
but fails to complete the 2025 annual content would not be eligible 
to continue beyond 2025. In the example above, if the individual 
reregisters with a firm as a General Securities Representative in 
2025, the individual would be required to complete any annual 
Regulatory Element applicable to the General Securities 
Representative registration category by December 31, 2025. If the 
individual fails to complete such Regulatory Element by December 31, 
2025, the individual would be designated as CE inactive in the CRD 
system beginning on January 1, 2026. Alternatively, if the 
individual decides to reregister with a firm as a General Securities 
Representative at any point beyond 2025, the individual would be 
required to requalify by examination, or obtain an examination 
waiver, in order to reregister.
    \68\ In this regard, it should be noted that if an individual 
who holds a single registration terminates that registration and 
elects not to participate, the registration would be subject to the 
two-year qualification period. Similarly, if an individual with 
multiple registration categories terminates only some of those 
registration categories (that is, files a partial termination) and 
elects not to participate, the terminated registration category or 
categories would also be subject to the two-year qualification 
period, unless the terminated category is a subset of a broader 
registration category for which they remain qualified.
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(iv) Other Enhancements to CE Program
    Most commenters supported the other enhancements to the CE Program. 
However, some commenters had concerns and questions. SIFMA requested 
that consideration be given to potential technical limitations and 
challenges of registrants when designing diverse instructional formats 
for the Regulatory Element. FSI, MML and SIFMA requested that the 
Regulatory Element learning topics for each upcoming year be published 
early.

[[Page 33439]]

    SIFMA suggested that firms be allowed to set the timing and 
frequency of FINRA-generated notifications to registered persons, 
especially where the firm's Regulatory Element deadline is sooner than 
December 31. SIFMA also suggested that FINRA should consider providing 
firms with the means to ``audit'' notifications sent to registered 
persons regarding the Regulatory Element via the FINRA Financial 
Professional Gateway (``FinPro[supreg]'') system and that continuing 
education completion information, including information relating to 
participants who elect the proposed option, should be displayed on 
BrokerCheck[supreg]. Morgan Stanley requested that FINRA provide firms 
with the option to communicate directly with registered persons so 
firms may set their own internal timelines to fulfill the annual 
Regulatory Element requirement. MML suggested that sending a 
notification to the personal email of a registered person via the 
FinPro system is inconsistent with general supervision and 
recordkeeping requirements relating to business-related electronic 
communications.
    NRS supported the development of a centralized Firm Element content 
directory, which includes course title, description and length, 
intended audience, learning objectives and skill level, rather than the 
development of a content catalog. Among other reasons, NRS stated that 
SROs should not create Firm Element content because it may have the 
unintended consequence of being considered regulatory guidance.
    FINRA and the CE Council will work to create optimal instructional 
formats for the Regulatory Element, taking into consideration the user 
experience. Further, FINRA and the CE Council will consider the 
possibility of publishing the Regulatory Element learning topics for 
each upcoming year early to provide firms with sufficient time to 
design their training for the upcoming year. FINRA will work with firms 
to determine the necessary enhancements to the FinPro system to 
facilitate the proposed transition to an annual Regulatory Element 
requirement. The use of the FinPro system notification functionality 
would not be inconsistent with the requirements relating to electronic 
communications. Firms that elect to use the functionality would receive 
copies of the system-generated notifications, which they could review 
and retain.
    With respect to the availability of continuing education 
information on BrokerCheck, an individual's CE inactive status is 
currently displayed on BrokerCheck and it will continue to be displayed 
under the proposed rule change. FINRA will also consider whether the 
continuing education status of participants who elect the proposed 
option should be displayed on BrokerCheck. Finally, with respect to the 
development of a Firm Element content catalog, which most commenters 
supported, SROs have historically created Firm Element content and have 
provided firms with the option of using such content. FINRA and the CE 
Council are considering creating a centralized location for such 
content and to partner with third-party training providers to include 
their content in the catalog. Based on the comments and industry 
feedback, a content catalog would be a valuable resource and would 
facilitate compliance by all firms, regardless of firm type.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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

    <bullet> Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#bbc9ced7de96d8d4d6d6ded5cfc8fbc8ded895dcd4cd"><span class="__cf_email__" data-cfemail="89fbfce5eca4eae6e4e4ece7fdfac9faeceaa7eee6ff">[email protected]</span></a>. Please include 
File Number SR-FINRA-2021-015 on the subject line.

Paper Comments

    <bullet> 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-2021-015. 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-2021-015 and should be submitted 
on or before July 15, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\69\
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    \69\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-13286 Filed 6-23-21; 8:45 am]
BILLING CODE 8011-01-P


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