Federal Register / Vol. 87, No. 84 / Monday, May 2, 2022 / Notices 25683 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 93097 

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

2021) (SR–FINRA–2021–015) (‘‘FINRA Continuing 

Education Rule Change’’). 

4See Securities Exchange Release No. 91262 

(March 5, 2021), 86 FR 13935 (March 11, 2021) (SR– 

FINRA–2021–003). 

5See supra notes 3 and 4. 

6The Firm Element of the FINRA Continuing 

Education (‘‘CE’’) Program was adopted in 1995 and 

requires broker-dealers to establish a formal training 

program to keep covered registered persons up to 

date on job and product-related subjects. Each 

broker-dealer must administer its Firm Element CE 

Program in accordance with its annual Needs 

Analysis and Written Training Plan and maintain 

records documenting the content and completion of 

the program. Each firm is required to analyze and 

evaluate its training needs in light of the firm’s size, 

organizational structure, scope of business, types of 

products and services it offers, as well as regulatory 

developments and the performance of its registered 

persons in the Regulatory Element. When the 

Exchange was approved in May 2012 there was no 

requirement for the Exchange to adopt the Firm 

Continued 

how the long haul exception impacts 

‘Start-the-Clock’ events; (2) the 

inclusion of Reply Mail in the 

measurement of Single-Piece First-Class 

Letters/Cards/Flats; and (3) a revision to 

the critical entry time (CET) applicable 

to Periodicals,’’ as well as a variety of 

stylistic and grammatical changes. 

Notice at 1. The Postal Service asserts 

that these changes were developed in 

response to the recommendations of the 

Commission and the Public 

Representative in Docket No. PI2021–3 

and will produce more accurate, 

reliable, and representative 

measurement of service performance by 

incorporating technological 

advancements to enhance measurement, 

updating business rules to leverage 

additional scan data, and promoting 

simplification of mail processing 

operations. Id. at 2–4. 

Interested persons are invited to 

comment on the Postal Service’s 

proposed revisions to its SPM Plan. 

Commenters are reminded that the 

scope of this docket is limited to the 

Postal Service’s proposed revisions to 

its SPM Plan, not the propriety of any 

underlying service standard changes 

that have been or will be addressed by 

the Commission in a separate docket. 

Comments are due May 18, 2022. The 

Commission does not anticipate the 

need for reply comments at this time. 

The Commission intends to evaluate the 

comments received and use those 

suggestions to help carry out its service 

performance measurement 

responsibilities under Title 39 of the 

United States Code. Material filed in 

this docket will be available for review 

on the Commission’s website, http://

www.prc.gov. The Commission appoints 

Christopher C. Mohr to represent the 

interests of the general public (Public 

Representative) in this docket. 

It is ordered: 

1. Docket No. PI2022–3 is established 

for the purpose of considering the Postal 

Service’s proposed revisions to its 

Service Performance Measurement Plan 

for its Market Dominant products. 

2. Interested persons may submit 

written comments on any or all aspects 

of the Postal Service’s proposals no later 

than May 18, 2022. 

3. Christopher C. Mohr is designated 

to represent the interests of the general 

public in this docket. 

4. The Secretary shall arrange for 

publication of this Notice in the Federal 

Register. 

By the Commission. 

Erica A. Barker, 

Secretary. 

[FR Doc. 2022–09309 Filed 4–29–22; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94794; File No. SR–BOX– 

2022–16] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend IM–2040–3, 

IM–2040–5 and Establish BOX Rule 

2130 (Continuing Education Program 

for Persons Maintaining Their 

Qualification Following the 

Termination of a Registration 

Category) and IM–2130–1 

April 26, 2022. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 13, 

2022, BOX Exchange LLC (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

BOX IM–2040–5 and establish BOX 

Rule 2130 (Continuing Education 

Program for Persons Maintaining Their 

Qualification Following the 

Termination of a Registration Category) 

and IM–2130–1 to require that the 

Regulatory Element of continuing 

education be completed annually rather 

than every three years and provide a 

path through continuing education for 

individuals to maintain their 

qualification following the termination 

of a registration. The Exchange also 

proposes to amend its manual signature 

requirement in IM–2040–3. The text of 

the proposed rule change is available 

from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s internet website at http://

boxoptions.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization has 

prepared summaries, set forth in 

sections A, B, and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend IM– 

2040–5 and establish BOX Rule 2130 

(Continuing Education Program for 

Persons Maintaining Their Qualification 

Following the Termination of a 

Registration Category) to amend its 

continuing education requirements. 

This is a conforming filing that is based 

on a filing submitted by the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’), and is intended to 

harmonize the Exchange’s continuing 

education rules with those of FINRA so 

as to promote uniform standards across 

the securities industry.3 The Exchange 

also proposes to amend its manual 

signature requirements in IM–2040–3 to 

align with changes FINRA has made to 

similar rules.4 Each change is discussed 

in detail below. 

The proposed changes are based on 

the changes approved by the 

Commission in the approval order for 

SR–FINRA–2021–015 and as noticed in 

SR–FINRA–2021–003.5 The Exchange is 

proposing to adopt such changes 

substantially in the same form as 

proposed by FINRA, with the exception 

of differences necessary to conform to 

the Exchange’s existing rules. The 

Exchange has excluded changes in 

1240(b) (Firm Element) 6 as the 


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Element portion of FINRA’s CE Program and 

therefore the Firm Element was not included in the 

Exchange’s Rulebook. However, the Exchange 

believes that all BOX Participants are currently 

complying with the Firm Element requirements due 

to their memberships at other options exchanges. 

Specifically, BOX Participants who are FINRA 

Members are meeting FINRA’s Continuing 

Education requirements under Rule 1240 which 

includes both a Regulatory Element and a Firm 

Element. BOX Participants who are CBOE Members 

are meeting CBOE’s Continuing Education 

Requirements under Rule 3.33 which includes both 

a Regulatory Element and a Firm Element. Finally, 

BOX Participants who are NASDAQ–OMX–PHLX 

Members are meeting NASDAQ–OMX–PHLX’s 

requirements of Continuing Education under 

General 4, Rules 1210 and 1240 which includes 

both a Regulatory Element and a Firm Element. 

BOX is in discussions with FINRA to include the 

Firm Element as part of its examination program 

and anticipates adding this requirement to the BOX 

rulebook in the near future. 

7See also IM–2040–5(b) (Continuing Education 

Requirements). 

8See IM–2040–5(b) (Continuing Education 

Requirements) and (f) (Reassociation in a Registered 

Capacity). An individual’s registration anniversary 

date is generally the date they initially registered 

with the Exchange in the Central Registration 

Depository (‘‘CRD®’’) system. However, an 

individual’s registration anniversary date would be 

reset if the individual has been out of the industry 

for two or more years and is required to requalify 

by examination, or obtain an examination waiver, 

in order to reregister. See also IM–2040–5(g) 

(Definition of Covered Person). In BOX’s proposed 

rule change all references to the Financial Services 

Affiliate Waiver Program (‘‘FSAWP’’) have been 

omitted as BOX has never included the FSAWP 

rules within the BOX Rule Book. Registered persons 

who become subject to a significant disciplinary 

action, as specified in IM–2040–5(e) (Disciplinary 

Actions), may be required to retake the Regulatory 

Element within 120 days of the effective date of the 

disciplinary action, if they remain registered. 

Further, their cycle for participation in the 

Regulatory Element may be adjusted to reflect the 

effective date of the disciplinary action rather than 

their registration anniversary date. 

9See IM–2040–5(c) (Failure to Complete), and 

IM–2040–5(d) (Requirements of the applicable 

provisions of these Rules). 

10See supra note 8. Individuals must complete 

the entire Regulatory Element session to be 

considered to have ‘‘completed’’ the Regulatory 

Element; partial completion is the same as noncompletion. 

11This CE inactive two-year period is calculated 

from the date such persons become CE inactive, and 

it continues to run regardless of whether they 

terminate their registrations before the end of the 

two-year period. Therefore, if registered persons 

terminate their registrations while in a CE inactive 

status, they must satisfy all outstanding Regulatory 

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

period in order to reregister with a member without 

having to requalify by examination or having to 

obtain an examination waiver. 

12The S101 (General Program for Registered 

Persons) and the S201 (Registered Principals and 

Supervisors). 

13The current content is presented in a single 

format leading individuals through a case that 

provides a story depicting situations that they may 

encounter in the course of their work. 

14See IM–2040–5(k) (Lapse of Registration and 

Expiration of SIE). The two-year qualification 

period is calculated from the date individuals 

terminate their registration and the date the 

Exchange receives a new application for 

registration. The two-year qualification period does 

not apply to individuals who terminate a limited 

registration category that is a subset of a broader 

registration category for which they remain 

qualified. 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 BOX Rule 12110 

(Judgment and Sanctions) may only requalify by 

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

representatives or principals, in addition to 

satisfying the eligibility conditions for association 

with a firm. 

15See supra note 3. FINRA’s 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/councilExchange does not currently have 

provisions analogous within its Rule 

Book. The Exchange has also omitted 

cross-references and rules that are 

applicable to FINRA members but not to 

Exchange members. 

Continuing Education Rules 

(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. The Regulatory 

Element, which is administered by 

FINRA, focuses on regulatory 

requirements and industry standards. 

The CE Program is codified under the 

rules of the self-regulatory organizations 

(‘‘SROs’’). The CE Program for registered 

persons of Exchange members is 

codified under IM–2040–5.7

a. Regulatory Element 

IM–2040–5 currently requires a 

registered person to complete the 

applicable Regulatory Element initially 

within 120 days after the person’s 

second registration anniversary date 

and, thereafter, within 120 days after 

every third registration anniversary 

date.8 The Exchange may extend these 

time frames for good cause shown.9

Registered persons who have not 

completed the Regulatory Element 

within the prescribed time frames will 

have their Exchange registrations 

deemed inactive and will be designated 

as ‘‘CE inactive’’ in the CRD system 

until the requirements of the Regulatory 

Element have been satisfied.10 A CE 

inactive person is prohibited from 

performing, or being compensated for, 

any activities requiring 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).11

The Regulatory Element consists of a 

subprogram for registered persons 

generally, and a subprogram for 

principals and supervisors.12 While 

some of the current Regulatory Element 

content is unique to particular 

registration categories, most of the 

content has broad application to both 

representatives and principals.13

The Regulatory Element was 

originally designed at a time when most 

individuals had to complete the 

Regulatory Element at a test center, and 

its design was shaped by the limitations 

of the test center-based delivery model. 

In 2015, 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. Termination of a Registration 

Currently, individuals whose 

registrations as representatives or 

principals have been terminated for two 

or more years may reregister as 

representatives or principals only if they 

requalify by retaking and passing the 

applicable representative or principallevel examination or if they obtain a 

waiver of such examination(s) (the 

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

two-year qualification period was 

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. 

(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 adopted the 

following changes to the CE Program 

under its rules.15 In order to promote 


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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 brokerdealers. 

16When 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). 

17See proposed IM–2040–5(b)(1), and (f). 

18See proposed IM–2040–5(b)(1). 

19See proposed IM–2040–5(b)(1), and (f). 20See proposed IM–2040–5(b)(1). 21See proposed IM–2040–5(f). 22See proposed IM–2040–5(c), and (d). 23See supra note 21. 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. 24See supra note 21. 25See supra note 21. 26See proposed IM–2040–5(e). As previously 

noted, IM–2040–5(e) currently provides that such 

individuals may be required to retake the 

Regulatory Element. See supra note 8. 

27See proposed IM–2040–5(f). 

28See proposed IM–2040–5(g). 

29As discussed in the economic impact 

assessment in the FINRA Continuing Education 

Rule Change, individuals with multiple 

registrations represent a smaller percentage of the 

population of registered persons. 

uniform standards across the securities 

industry, the Exchange now proposes to 

adopt changes to its continuing 

education rules substantially in the 

same form as proposed by FINRA, with 

the exception of differences necessary to 

conform to the Exchange’s existing 

rules. The Exchange has excluded 

changes in 1240(b) (Firm Element) as 

the Exchange does not currently have 

provisions analogous within its Rule 

Book. The Exchange has also omitted 

cross-references and rules that are 

applicable to FINRA members but not to 

Exchange members. 

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, the Exchange 

proposes amending IM–2040–5(b) 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

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.19 For example, a firm 

could require its registered persons to 

complete their Regulatory Element by 

October 1 of each year. 

Individuals who would be registering 

as a representative or principal for the 

first time on or after the implementation 

date of the proposed rule change would 

be required to complete their initial 

Regulatory Element for that registration 

category in the next calendar year 

following their registration.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

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 the Exchange’s ability 

to extend the time by which a registered 

person must complete the Regulatory 

Element for good cause shown.23

The Exchange also proposes 

amending IM–2040–5 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 

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 the Exchange; 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, the Exchange proposes making 

conforming amendments to IM–2040–5. 

Under the proposed rule change, the 

amount of content that registered 

persons would be required to complete 

in a three-year, annual cycle for a 

particular registration category is 

expected to be comparable to what most 

registered persons are currently 

completing every three years. In some 

years, there may be more required 

content for some registration categories 

depending on the volume of rule 

changes and regulatory issues. In 

addition, an individual who holds 

multiple registrations may be required 

to complete additional content 

compared to an individual who holds a 

single registration because, as noted 

above, individuals would be required to 

complete content specific to each 

registration category that they hold.29

However, individuals with multiple 

registrations would not be subject to 

duplicative regulatory content in any 

given year. The more common 

registration combinations would likely 

share much of their relevant regulatory 

content each year. For example, 

individuals registered as General 

Securities Representatives and General 

Securities Principals would receive the 

same content as individuals solely 

registered as General Securities 

Representatives, supplemented with a 

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

less common registration combinations 

may result in less topic overlap and 

more content overall. 

b. Maintenance of Qualification After 

Termination of Registration 

The Exchange proposes adopting BOX 

Rule 2130 (Continuing Education 


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30The proposed option would also be available to 

individuals who terminate any permissive 

registrations as provided under BOX Rule 2070. 

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. 

31See proposed BOX Rule 2130(a). 

32See proposed BOX Rule 2130(b). 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. 

33See proposed BOX Rule 2130(c). However, 

upon a participant’s request and for good cause 

shown, the Exchange would have the ability to 

grant an extension of time for the participant to 

complete the prescribed continuing education. A 

participant who is also a registered person must 

directly request an extension of the prescribed 

continuing education from the Exchange. The 

continuing education content for participants 

would consist of the Regulatory Element content 

discussed below. 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. 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. 

The Exchange does not currently have provisions 

analogous to FINRA Rule 1240(b) (Firm Element) 

and thus has omitted language referring to such 

provisions in its proposed Rules. 

34See proposed Rule 2130. 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). 

35See proposed Rules 2130(d) and (e). 

36See proposed Rules 2130(a) and (f). Further, 

any content completed by participants would be 

retroactively nullified upon disclosure of the 

statutory disqualification. The following example 

illustrates the application of the proposed rule 

change to individuals who become subject to a 

statutory disqualification while participating in the 

proposed continuing education program. Individual 

A participates in the proposed continuing 

education program for four years and completes the 

prescribed content for each of those years. During 

year five of his participation, he becomes subject to 

a statutory disqualification resulting from a foreign 

regulatory action. In that same year, the Exchange 

receives a Form U4 submitted by a member on 

behalf of Individual A requesting registration with 

the Exchange. The Form U4 discloses the statutory 

disqualification event. The Exchange would then 

retroactively nullify any content that Individual A 

completed while participating in the proposed 

continuing education program. Therefore, in this 

example, in order to become registered with the 

Exchange, he would be required to requalify by 

examination. This would be in addition to 

satisfying the eligibility conditions for association 

with an Exchange member firm. See Exchange Act 

Sections 3(a)(39) and 15(b)(4) and BOX Rule 2020. 

37See proposed IM–2130–1. Such individuals 

would be required to elect whether to participate 

by the effective 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 effective. In addition, if 

such individuals elect to participate, their initial 

participation period would be adjusted based on the 

date that their registration was terminated. As 

discussed above, the proposed rule change provides 

a five-year participation period for participants in 

the proposed continuing education program. 

38See proposed IM–2130–1(b). 

Program for Persons Maintaining Their 

Qualification Following the 

Termination of a Registration Category) 

and IM–2130–1 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.30 The proposed rule change 

would not eliminate the two-year 

qualification period. Rather, it would 

provide such individuals an alternative 

means of staying current on their 

regulatory and securities knowledge 

following the termination of a 

registration(s). Eligible individuals who 

elect not to participate in the proposed 

continuing education program would 

continue to be subject to the current 

two-year qualification period. The 

proposed rule change is generally 

aligned with other professional 

continuing education programs that 

allow individuals to maintain their 

qualification to work in their respective 

fields during a period of absence from 

their careers (including an absence of 

more than two years) by satisfying 

continuing education requirements for 

their credential. 

The proposed rule change would 

impose the following conditions and 

limitations: 

• Individuals would be required to be 

registered in the terminated registration 

category for at least one year 

immediately prior to the termination of 

that category; 31

• individuals could elect to 

participate when they terminate a 

registration or within two years from the 

termination of a registration; 32

• individuals would be required to 

complete annually all prescribed 

continuing education; 33

• individuals would have a maximum 

of five years in which to reregister; 34

• 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; 35 and 

• individuals who are subject to a 

statutory disqualification, or who 

become subject to a statutory 

disqualification following the 

termination of their registration or 

during their participation, would not be 

eligible to participate or continue.36

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 effective 

date of the proposed rule change.37

In addition, the proposed rule change 

includes a re-eligibility provision that 

would allow individuals to regain 

eligibility to participate each time they 

reregister with a firm for a period of at 

least one year and subsequently 

terminate their registration, provided 

that they satisfy the other participation 

conditions and limitations.38 Finally, 

the Exchange proposes to adopt new 

paragraph (k) to IM–2040–5, entitled 

Lapse of Registration and Expiration of 

SIE based on FINRA Rule 1210.08. 

Currently, IM–2040–3 states that any 

person who last passed the Securities 

Industry Essentials Examination (‘‘SIE’’) 

or who was last registered as a 

representative, whichever occurred last, 

four or more years immediately 

preceding the date of receipt by the 

Exchange of a new application for 

registration as a representative shall be 

required to pass the SIE in addition to 

a representative qualification 

examination appropriate to his or her 

category of registration. This same 

language is contained in FINRA Rule 

1210.08 but with additional detail. The 

Exchange proposes adopting new 

paragraph (k) in IM–2040–5 to more 

closely align with FINRA Rule 1210.08. 

As proposed, any person who was last 

registered in a representative 

registration category two or more years 

immediately preceding the date of 

receipt by FINRA of a new application 

for registration in that registration 

category shall be required to pass a 

representative qualification examination 

appropriate to that registration category 

as specified in IM–2040–3 unless the 

person has maintained his or her 

qualification status for that registration 

category in accordance with proposed 


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Federal Register / Vol. 87, No. 84 / Monday, May 2, 2022 / Notices 25687 

39See The Female Face of Family Caregiving 

(November 2018), available at https://www.national

partnership.org/our-work/resources/economicjustice/femaleface-family-caregiving.pdf. 

40See The COVID–19 Recession is the Most 

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

2020), available at https://www.washingtonpost.

com/graphics/2020/business/coronavirusrecessionequality/ 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/pandemicunemployment-older-workers. 

41See supra note 3. As described in more detail 

in the FINRA Continuing Education Rule Change, 

FINRA will work with the CE Council to develop 

and incorporate additional resources in connection 

with the Regulatory and Firm Elements. Similar to 

FINRA, these additional enhancements do not 

require any changes to the Exchange rules. 

42See FINRA Regulatory Notice 21–41 at https:// 

www.finra.org/rulesguidance/notices/21-41. 

43See supra note 4. 

44See Securities Exchange Release No. 92562 

(August 4, 2021), 86 FR 143701 (August 10, 2021) 

(SR–CBOE–2021–043). 

45See accord Securities Exchange Act Release 

No. 85282 (March 11, 2019), 84 FR 9573 (March 15, 

2019) (Order Approving File No. SR–FINRA–2018– 

040) (discussing valid electronic signatures under 

existing guidance). 

46 15 U.S.C. 78f(b). 

47 15 U.S.C. 78f(b)(5). 

BOX Rule 2130 or as otherwise 

permitted by the Exchange. Any person 

who was last registered in a principal 

registration category two or more years 

immediately preceding the date of a 

new application for registration in that 

registration category shall be required to 

pass a principal qualification 

examination appropriate to that 

registration category as specified in IM– 

2040–5, unless the person has 

maintained his or her qualification 

status for that registration category in 

accordance with proposed BOX Rule 

2130 or as otherwise permitted by the 

Exchange. Any person whose 

registration has been revoked pursuant 

to BOX Rule 12110 and any person who 

has a continuing education deficiency 

for a period of two years as provided 

under proposed BOX Rule 2130 shall be 

required to pass a representative or 

principal qualification examination 

appropriate to his or her category of 

registration as specified in IM–2040–5, 

to be eligible for registration. Lastly, for 

purposes of proposed paragraph (k), an 

application shall not be considered as a 

new application for registration if that 

application does not result in a 

registration. 

The proposed rule change will have 

several important benefits. It will 

provide individuals with flexibility to 

address life and career events and 

necessary absences from registered 

functions without having to requalify 

each time. It will also incentivize them 

to stay current on their respective 

securities industry knowledge following 

the termination of any of their 

registrations. The continuing education 

under the proposed option will be as 

rigorous as the continuing education of 

registered persons, which promotes 

investor protection. Further, the 

proposed rule change will enhance 

diversity and inclusion in the securities 

industry by attracting and retaining a 

broader and diverse group of 

professionals. 

Significantly, the proposed rule 

change will be of particular value to 

women, who continue to be the primary 

caregivers for children and aging family 

members and, as a result, are likely to 

be absent from the industry for longer 

periods.39 In addition, the proposed rule 

change will provide longer-term relief 

for women, individuals with low 

incomes and other populations, 

including older workers, who are at a 

higher risk of a job loss during certain 

economic downturns and who are likely 

to remain unemployed for longer 

periods.40

c. CE Program Implementation 

As stated in the FINRA Continuing 

Education Rule Change, FINRA and the 

CE Council also plan to enhance the CE 

Program in other ways, and these 

additional enhancements do not require 

any changes to the FINRA rules.41 As it 

relates to the rule changes themselves, 

the changes relating to the Maintaining 

Qualifications Program (BOX Rule 2130) 

will become effective upon filing. All 

other changes related to the FINRA 

Continuing Education Rule Change, 

including the changes relating to the 

Regulatory Element and the two-year 

qualification period, will have an 

implementation date of January 1, 

2023.42

Manual Signature 

IM–2040–3 currently provides that 

every initial and transfer electronic 

Form U4 filing and any amendments to 

the disclosure information on Form U4 

must be based on a manually signed 

Form U4 provided to the member or 

applicant for membership by the person 

on whose behalf the Form U4 is being 

filed, consistent with FINRA Rule 

1010(c). Similarly, the Exchange’s IM– 

2040–3 currently provides that in the 

event a member is not able to obtain an 

associated person’s manual signature or 

written acknowledgement of amended 

disclosure information on that person’s 

Form U4 prior to filing of such 

amendment reflecting the information 

pursuant to IM–2040–3 the member 

must enter ‘‘Representative Refused to 

Sign/Acknowledge’’ or ‘‘Representative 

Not Available’’ or a substantially similar 

entry in the electronic Form U4 field for 

the associated person’s signature. 

However, FINRA has since amended 

their Rule 1010(c) to permit firms to 

choose to rely on electronic signatures 

to satisfy the signature requirements 

when filing Form U4.43 Cboe Exchange, 

Inc. (‘‘CBOE’’) has also updated its Rule 

3.34 to reflect FINRA’s updated Rule 

1010(c).44

The Exchange proposes to amend IM– 

2040–3 to similarly allow firms to rely 

on electronic signatures when filing 

Form U4, consistent with FINRA Rule 

1010(c). Specifically, the Exchange 

proposes to remove the term ‘‘manual’’ 

from ‘‘manual signature’’ and the term 

‘‘manually’’ from ‘‘manually signed’’. 

The proposed rule change provides 

members, and applicants for 

membership, with an opportunity to 

better manage operational challenges. 

Particularly, the COVID–19 pandemic 

amplified the need to better manage 

operational challenges like those that 

arose during the pandemic and that may 

continue to arise in the future. 

Additionally, the proposed rule change 

would not require the use of a particular 

type of technology to obtain a valid 

electronic signature from the associated 

person. The Exchange believes that 

some firms may be unable to obtain the 

manual signature of applicants for 

registration resulting in a significant 

operational backlog. By permitting these 

firms to rely on electronic signatures to 

satisfy the signature requirements of 

IM–2040–3, the proposed rule change 

may reduce or eliminate this backlog. 

For purposes of the proposed rule 

change, a valid electronic signature 

would be any electronic mark that 

clearly identifies the signatory and is 

otherwise in compliance with the 

Electronic Signatures in Global and 

National Commerce Act (‘‘E-Sign Act’’) 

and the guidance issued by the SEC 

relating to the E-Sign Act.45

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),46 in general, and Section 6(b)(5) 

of the Act,47 in particular, in that it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general to protect investors and the 


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25688 Federal Register / Vol. 87, No. 84 / Monday, May 2, 2022 / Notices 

48The proposed changes to IM–2040–5 is based 

on and substantially similar to FINRA Rules 

1240(a)(1)–(4). The proposed BOX Rule 2130 is 

based on and is substantially similar to FINRA Rule 

1240(c) and Supplementary Materials .01 and .02 to 

FINRA Rule 1240. The Exchange does not currently 

have provisions analogous to FINRA Rules 1210.02, 

1210.09, or 1240(b) and thus has omitted language 

referring to such provisions in its proposed Rules. 49See supra, notes 3 and 4. 

50 15 U.S.C. 78s(b)(3)(A)(iii). 

51 17 CFR 240.19b–4(f)(6). 

52 17 CFR 240.19b–4(f)(6)(iii). 

public interest. In particular, the 

Exchange believes proposed changes to 

the Regulatory Element will ensure that 

all registered persons receive timely and 

relevant training, which will, in turn, 

enhance compliance and investor 

protection. Further, the Exchange 

believes that establishing a path for 

individuals to maintain their 

qualification following the termination 

of a registration will reduce unnecessary 

impediments to requalification and 

promote greater diversity and inclusion 

in the securities industry without 

diminishing investor protection. The 

Exchange is proposing to adopt such 

changes in similar form proposed by 

FINRA with additional changes 

necessary to conform to the Exchange’s 

existing rules, such as excluding the 

changes to the Firm Element and the 

removal of cross-references to rules that 

are applicable to FINRA members but 

not Members of the Exchange.48

As it relates to the proposed changes 

to IM–2040–3, the Exchange believes 

the proposed rule change provides firms 

with the flexibility to rely on electronic 

signatures to satisfy the signature 

requirements of IM–2040–3. 

Specifically, the Exchange proposes to 

amend IM–2040–3, similar to the 

amendments made by FINRA and 

CBOE, to provide the option of filing an 

initial or a transfer Form U4 based on 

a manually or an electronically signed 

copy of the form provided to the 

member, or applicant for membership, 

by the individual on whose behalf the 

form is being filed. Considering the 

technological advancements that 

provide for enhanced authentication 

and security of electronic signatures, the 

Exchange believes that it is appropriate 

to amend IM–2040–3 to provide such 

flexibility. The proposed rule change 

also addresses the ongoing public health 

risks stemming from the outbreak of 

COVID–19 and the operational 

challenges that firms continue to face as 

a result of pandemic repercussions. By 

permitting these firms to rely on 

electronic signatures to satisfy the 

signature requirements of IM–2040–3, 

the proposed rule change may reduce or 

eliminate an operational backlog due to 

the difficulty firms may have faced in 

obtaining the manual signature of 

applicants for registration as a result of 

the impact of the pandemic on daily 

work environments. 

The Exchange believes the proposal is 

consistent with the Act for the reasons 

described above and for the reasons 

outlined in the approval order for SR– 

FINRA–2021–015 and as noticed in SR– 

FINRA–2021–003.49

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. In this regard 

and as indicated above, the Exchange 

notes that the rule change is being 

proposed as a conforming response to a 

filing submitted by FINRA and is 

intended to harmonize the Exchange’s 

continuing education rules with those of 

FINRA so as to promote uniform 

standards across the securities industry. 

All members would be subject to the 

proposed rule change. The proposed 

rule change relating to the Exchange’s 

CE Program, which is similar to the 

FINRA Continuing Education Rule 

Change, is designed 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. 

As it relates to the proposed 

amendments to IM–2040–3, the 

proposed rule change relating to manual 

signatures is, in all material respects, 

substantively identical to rule changes 

adopted by FINRA and CBOE. The 

Exchange believes the proposed change 

will reduce a regulatory filing burden 

for members by allowing them to rely on 

Form U4 copies with an electronic 

signature. All members will have the 

option to rely on such forms with an 

electronic signature (or continue to rely 

on forms with a manual signature). 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 50 and Rule 19b– 

4(f)(6) thereunder.51

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii), the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. The 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

this proposed rule change may become 

operative immediately upon filing. In 

addition, Rule 19b–4(f)(6)(iii) 52 requires 

a self-regulatory organization to give the 

Commission written notice of its intent 

to file a proposed rule change under that 

subsection at least five business days 

prior to the date of filing, or such 

shorter time as designated by the 

Commission. The Exchange has 

provided such notice. 

Waiver of the 30-day operative delay 

would allow the Exchange to implement 

proposed changes in a more timely 

fashion. The proposed rule changes to 

IM–2040–3 address operational 

challenges facing firms due to the 

ongoing public health risks stemming 

from the outbreak of COVID–19 and 

permit firms to rely on electronic 

signatures to satisfy the signature 

requirements of IM–2040–3, which may 

reduce or eliminate an operational 

backlog, ultimately benefiting the 

investing public. Moreover, the 

proposed rule changes do not impose 

any significant burden on competition 

because they will apply uniformly to all 

similarly situated members and 

associated persons of members. Also, as 

stated above, the proposed rule changes 

are substantively the same as changes 

made to FINRA Rule 1010(c) and CBOE 


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53For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

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

78c(f). We also note that the Exchange initially filed 

a proposed rule change on the same subject matter 

on March 24, 2022 (‘‘March 24 Filing’’). See https:// 

rules.boxexchange.com/rulefilings. The Exchange 

withdrew the March 24 Filing on April 5, 2022 and 

filed an updated proposed rule change as its 

replacement on the same day (‘‘April 5 Filing’’). See 

id. The Exchange subsequently withdrew the April 

5 Filing on April 13, 2022 and filed this proposed 

rule change as its replacement on the same day. See 

id. This filing is substantially the same as both the 

March 24 Filing and the April 5 Filing, with only 

minor clarifying changes as compared to both the 

March 24 Filing and April 5 Filing. Accordingly, 

given the waiver of the 30-day operative delay, this 

proposal was operative upon the initial March 24 

Filing. 54 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 94388 

(March 9, 2022), 87 FR 14589. 

4 15 U.S.C. 78s(b)(2). 

Rule 3.34. Waiver of the 30-day 

operative delay would also allow the 

Exchange to implement the proposed 

continuing education changes noted 

above thereby reducing the possibility 

of a significant regulatory gap between 

the FINRA and Exchange Rules. This is 

consistent with the protection of 

investors and the public interest by 

providing more uniform standards 

across the securities industry and 

helping to avoid confusion for members 

of the Exchange that are also FINRA 

members. Accordingly, the Commission 

hereby waives the 30-day operative 

delay and designates the proposal 

operative upon filing.53

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

BOX–2022–16 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BOX–2022–16. 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, on official business 

days between the hours of 10:00 a.m. 

and 3:00 p.m., located at 100 F Street 

NE, Washington, DC 20549. Copies of 

the filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–BOX–2022–16 and should 

be submitted on or before May 23, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.54

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–09312 Filed 4–29–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94795; File No. SR–NYSE– 

2022–11] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Designation of a Longer Period for 

Commission Action on a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Amend the 

NYSE Listed Company Manual To 

Provide a Limited Exemption From the 

Shareholder Approval Requirements 

for Closed-End Management 

Investment Companies With Equity 

Securities Listed Under Section 102.04 

of the Listed Company Manual 

April 26, 2022. 

On February 23, 2022, New York 

Stock Exchange LLC (‘‘NYSE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend the NYSE Listed Company 

Manual to provide a limited exemption 

from the shareholder approval 

requirements for closed-end 

management investment companies 

with equity securities listed under 

Section 102.04 of the Listed Company 

Manual. On March 8, 2022, the 

Exchange filed Amendment No. 1 to the 

proposed rule change, which replaced 

and superseded the proposed rule 

change in its entirety. The proposed rule 

change, as modified by Amendment No. 

1, was published for comment in the 

Federal Register on March 15, 2022.3

The Commission has received no 

comment letters on the proposed rule 

change, as modified by Amendment No. 

1. 

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding, or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 


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