35826 Federal Register / Vol. 87, No. 113 / Monday, June 13, 2022 / Notices 

58 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4A Participant is a ‘‘member’’ of the Exchange for 

purposes of the Act. See Article 1, Rule 1(s). 

5See Securities Exchange Act Release No. 93097 

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

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

Change’’). 

6 Id. 

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– 

NYSEARCA–2022–32 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–NYSEARCA–2022–32. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEARCA–2022–32 and 

should be submitted on or before July 5, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.58

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12644 Filed 6–10–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95063; File No. SR– 

NYSECHX–2022–11] 

Self-Regulatory Organizations; NYSE 

Chicago, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change for Amendments to the 

Exchange’s Rules Regarding 

Continuing Education Requirements 

June 7, 2022. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on May 25, 

2022, NYSE Chicago, Inc. (‘‘NYSE 

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

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the 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 amendments 

to the Exchange’s rules regarding 

continuing education requirements 

(Article 6, Rule 11) applicable to 

Participants.4 The proposed rule change 

also makes conforming amendments to 

the Exchange’s rules regarding 

registration requirements (Article 6, 

Rule 13). 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 proposed rule 

change is available on the Exchange’s 

website at www.nyse.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

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 those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

continuing education requirements in 

Article 6, Rule 11 and amend related 

registration requirements provided 

under various Interpretations and 

Policies to Article 6, Rule 13. This 

proposed rule change is based on a 

filing recently 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.5 The proposed rule 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–2021–015.6 The Exchange is 

proposing to adopt such changes 

substantially in the same form as 

proposed by FINRA, with only minor 

changes necessary to conform to the 

Exchange’s existing rules such as to 

remove 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 and a Firm Element. 

The Regulatory Element, which is 


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7See also Interpretations and Policies .06 to 

Article 6, Rule 13 (All Registered Persons Must 

Satisfy the Regulatory Element of Continuing 

Education). 

8See Article 6, Rule 11(a) and Article 6, Rule 

11(a)(5). 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. An individual’s registration 

anniversary date would also be reset if the 

individual obtains a conditional examination 

waiver that requires them to complete the 

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

waiver program under Interpretations and Policies 

.08 to Article 6, Rule 13 (Waiver of Examinations 

for Individuals Working for a Financial Services 

Industry Affiliate of a Participant) (‘‘FSAWP 

participants’’) are also subject to the Regulatory 

Element. 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 

Article 6, Rule 11(a)(2) (Disciplinary Actions), may 

be required to retake the Regulatory Element within 

120 days of the effective date of the disciplinary 

action, if they remain registered. Further, their cycle 

for participation in the Regulatory Element may be 

adjusted to reflect the effective date of the 

disciplinary action rather than their registration 

anniversary date. 

9See Article 6, Rule 11(a)(1) (Failure to 

Complete). 

10 Id. 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. 

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. 

14The rule defines ‘‘covered registered persons’’ 

as any registered person who has direct contact 

with customers in the conduct of a member’s 

securities sales and trading activities, and the 

immediate supervisors of any such persons. See 

Article 6, Rule 11(b)(1) (Persons Subject to the Firm 

Element). 

15See Article 6, Rule 11(b)(2) (Standards). 

16 Id. 

17See Interpretations and Policies .07 to Article 

6, Rule 13 (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 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 

Interpretations and Policies .02 to Article 6, Rule 13 

(Qualification Examinations and Waivers of 

Continued 

administered by FINRA on behalf of the 

Exchange, 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 

Exchange members is codified under 

Article 6, Rule 11.7

a. Regulatory Element 

Article 6, Rule 11(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.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. Firm Element 

Article 6, Rule 11(b) (Firm Element) 

currently requires each firm to develop 

and administer an annual Firm Element 

training program for covered registered 

persons.14 The rule requires firms to 

conduct an annual needs analysis to 

determine the appropriate training.15

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.16

A firm, consistent with its needs 

analysis, may determine to apply 

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, for purposes of satisfying Firm 

Element training. 

c. Termination of a Registration 

Currently, individuals whose 

registrations as representatives or 

principals have been terminated for two 

or more years may reregister as 

representatives or principals only if they 

requalify by retaking and passing the 

applicable representative- or principallevel examination or if they obtain a 

waiver of such examination(s) (the 

‘‘two-year qualification period’’).17 The 


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Examinations) or as part of the waiver program 

under Interpretations and Policies .08 to Article 6, 

Rule 13. 

18See supra note 5. 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/councilrecommendations-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. 

19When 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). 

20See proposed Article 6, Rules 11(a) and (a)(5). 

21See proposed Article 6, Rule 13, Interpretations 

and Policies .06 and Article 6, Rule 11(a). 

22See proposed Article 6, Rules 11(a) and (a)(5). 

23See proposed Article 6, Rule 11(a). 

24See proposed Article 6, Rule 11(a)(5). 

25See proposed Article 6, Rule 11(a)(1). 

26 Id. 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. 

27See proposed Article 6, Rule 11(a)(1). 

28See proposed Article 6, Rule 11(a)(1). 

29See proposed Article 6, Rule 11(a)(2). As 

previously noted, Article 6, Rule 11(a)(2) currently 

provides that such individuals may be required to 

retake the Regulatory Element. See supra note 8. 

30See proposed Article 6, Rule 11(a)(5). 

31As discussed in the economic impact 

assessment in the FINRA Rule Change, individuals 

with multiple registrations represent a smaller 

percentage of the population of registered persons. 

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.18 In order to promote 

uniform standards across the securities 

industry, the Exchange now proposes to 

adopt substantially similar changes to 

its continuing education rules. 

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.19 Therefore, to provide 

registered persons with more timely and 

relevant training on significant 

regulatory developments, the Exchange 

proposes amending Article 6, Rule 11(a) 

to require registered persons to 

complete the Regulatory Element 

annually by December 31.20 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.21 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.22 For example, a firm could 

require its registered persons to 

complete both their Regulatory Element 

and Firm Element by October 1 of each 

year. 

Individuals who would be registering 

as a representative or principal for the 

first time on or after the implementation 

date of the proposed rule change would 

be required to complete their initial 

Regulatory Element for that registration 

category in the next calendar year 

following their registration.23 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.24

Consistent with current requirements, 

individuals who fail to complete their 

Regulatory Element within the 

prescribed period would be 

automatically designated as CE 

inactive.25 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.26

The Exchange also proposes 

amending Article 6, Rule 11(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 period, to return to active 

status; 27 (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; 28 (3) individuals who 

become subject to a significant 

disciplinary action may be required to 

complete assigned continuing education 

content as prescribed by the 

Exchange; 29 (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; 30 and 

(5) the Regulatory Element requirements 

apply to individuals who are registered, 

or in the process of registering, as a 

representative or principal. In addition, 

the Exchange proposes making 

conforming amendments to 

Interpretations and Policies .07 to 

Article 6, Rule 13. 

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.31

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 


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32See proposed Article 6, Rule 11(b)(2)(D). 

33See proposed Article 6, Rule 11(b)(1). As noted 

earlier, the current requirement only applies to 

‘‘covered registered persons’’ and not all registered 

persons. 

34See proposed Rule Article 6, Rule 11(b)(2)(B). 

35The proposed option would also be available to 

individuals who terminate any permissive 

registrations as provided under Interpretations and 

Policies .01 to Article 6, Rule 13. 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. 

36See proposed Article 6, Rule 11(c)(1). 

37See proposed Article 6, Rule 11(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. 

38See proposed Article 6, Rule 11(c)(3). However, 

upon a participant’s request and for good cause 

shown, the Exchange would have the ability to 

grant an extension of time for the participant to 

complete the prescribed continuing education. A 

participant who is also a registered person must 

directly request an extension of the prescribed 

continuing education from the Exchange. 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. 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. 

39See proposed Article 6, Rule 11(c). 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). 

40See proposed Article 6, Rules 11(c)(4) and 

(c)(5). 

41See proposed Article 6, Rules 11(c)(1) and 

(c)(6). 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). 

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. Recognition of Other Training 

Requirements for Firm Element and 

Extension of Firm Element to All 

Registered Persons 

To better align the Exchange’s 

rulebook with FINRA’s rulebook, and, 

in addition, to better align the Firm 

Element requirement with other 

required training, the Exchange 

proposes amending Article 6, Rule 11(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.32 The Exchange 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 

Interpretations and Policies .01 to 

Article 6, Rule 13 (Permissive 

Registrations), thereby further aligning 

the Firm Element requirement with 

other broadly-based training 

requirements.33 In conjunction with this 

proposed change, the Exchange 

proposes modifying the current 

minimum training criteria under Article 

6, Rule 11(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.34

c. Maintenance of Qualification After 

Termination of Registration 

The Exchange proposes adopting 

paragraph (c) under Article 6, Rule 11 

and Interpretations and Policies .07 and 

.08 to Article 6, Rule 11 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.35 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; 36

• individuals could elect to 

participate when they terminate a 

registration or within two years from the 

termination of a registration; 37

• individuals would be required to 

complete annually all prescribed 

continuing education; 38

• individuals would have a maximum 

of five years in which to reregister; 39

• 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 

• 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

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 


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35830 Federal Register / Vol. 87, No. 113 / Monday, June 13, 2022 / Notices 

42See proposed Interpretations and Policies .07 to 

Article 6, Rule 11. 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 becomes 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. The 

current waiver program for FSAWP participants 

would not be available to new participants upon the 

date the proposed rule change becomes effective. 

See proposed Interpretations and Policies .08 to 

Article 6, Rule 13. However, individuals who are 

FSAWP participants immediately prior to the 

effective 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 8. 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, the Exchange 

has determined to preserve that waiver program for 

individuals who are participating in the FSAWP 

immediately prior to the effective 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 effective date of 

the proposed rule change would be subject to an 

annual Regulatory Element requirement. See 

proposed Article 6, Rule 11(a). Finally, the 

proposed rule change preserves the Exchange’s 

ability to extend the time by which FSAWP 

participants must complete the Regulatory Element 

for good cause shown. See proposed Article 6, Rule 

11(a)(1). 

43See proposed Interpretations and Policies .08 to 

Article 6, Rule 11. 

44See The Female Face of Family Caregiving 

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

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

45See The COVID–19 Recession is the Most 

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

2020), available at https://

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

coronavirus-recessionequality/ and 

Unemployment’s Toll on Older Workers Is Worst in 

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

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

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

46See supra note 5. As described in more detail 

in the FINRA 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. 

47See FINRA Regulatory Notice 21–41 at https:// 

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

48 Id. 

49 15 U.S.C. 78f(b). 

50 15 U.S.C. 78f(b)(5). 

51See supra note 5. 

52 15 U.S.C. 78f(b)(5). 

53 15 U.S.C. 78f(c)(3). 

been FSAWP participants immediately 

prior to the implementation date of the 

proposed rule change.42

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

Additionally, the Exchange proposes 

making conforming amendments to 

Article 6, Rule 13, including adding 

references to proposed Article 6, Rule 

11(c) under Interpretations and Policies 

.07 to Article 6, Rule 13. Finally, the 

Exchange proposes certain additional 

amendments to its rules to further align 

the Exchange’s rules with those of 

FINRA, including making changes to 

certain rules to correct typographical 

and grammatical errors. More 

specifically, the Exchange proposes to 

amend current Article 6, Rule 11(a)(1) to 

clarify that the provisions under the rule 

apply to a ‘‘Registered Person’’ by 

inserting the word ‘‘Registered’’ in front 

of ‘‘Person.’’ 

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.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

d. CE Program Implementation 

As stated in the FINRA 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.46 As it relates to the rule changes 

themselves, the FINRA changes relating 

to the Maintaining Qualifications 

Program and the Financial Services 

Affiliate Waiver Program (FSAWP) 

became effective on March 15, 2022.47

The Exchange’s proposed changes to the 

Maintaining Qualifications Program 

(paragraph (c) of Article 6, Rule 11 and 

Interpretations and Policies .07 and .08 

to Article 6, Rule 11) and to the FSAWP 

(Interpretations and Policies .08 to 

Article 6, Rule 13) will become effective 

on the date this proposed rule change is 

filed. All other changes related to the 

FINRA Rule Change and to the 

Exchange’s rules relating to the 

Regulatory Element, Firm Element and 

the two-year qualification period, will 

have an implementation date of January 

1, 2023.48

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),49 in general, and furthers the 

objectives of Section 6(b)(5),50 in 

particular, because 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 

public interest. 

As noted above, the proposed rule 

change seeks to align the Exchange 

Rules with the recent change to FINRA 

rules which has been approved by the 

Commission.51 The Exchange believes 

the proposed rule change is consistent 

with the provisions of Section 6(b)(5) of 

the Act,52 which requires, among other 

things, that Exchange 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 6(c)(3) of the Act,53 which 

authorizes the Exchange to prescribe 

standards of training, experience and 

competence for persons associated with 

the Exchange. 

The Exchange believes that the 

proposed change 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, 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 


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54See supra note 5. 

55 15 U.S.C. 78s(b)(3)(A)(iii). 

56 17 CFR 240.19b–4(f)(6). 

57 17 CFR 240.19b–4(f)(6)(iii). 

58For 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). 59 17 CFR 200.30–3(a)(12). 

in the securities industry without 

diminishing investor protection. 

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–2021–015.54

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes that the proposed 

rule change, which harmonizes its rules 

with the recent rule change adopted by 

FINRA, will reduce the regulatory 

burden placed on market participants 

engaged in trading activities across 

different markets. The Exchange 

believes that the harmonization of the 

CE program requirements across the 

various markets will reduce burdens on 

competition by removing impediments 

to participation in the national market 

system and promoting competition 

among participants across the multiple 

national securities exchanges. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to 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 55 and Rule 19b– 

4(f)(6) thereunder.56

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) 57 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 more 

quickly align certain of its proposed 

changes with changes that FINRA 

implemented on March 15, 2022, 

thereby reducing the possibility of a 

significant regulatory gap between the 

FINRA and Exchange rules, providing 

more uniform standards across the 

securities industry, and helping to avoid 

confusion for registered persons of the 

Exchange that are also FINRA members. 

For this reason, the Commission 

believes that waiver of the 30-day 

operative delay for this proposal is 

consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.58

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– 

NYSECHX–2022–11 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–NYSECHX–2022–11. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSECHX–2022–11 and 

should be submitted on or before July 5, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.59

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12654 Filed 6–10–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–359, OMB Control No. 

3235–0410] 

Submission for OMB Review; 

Comment Request: Extension; Rules 

17h–1T and 17h–2T 

Upon Written Request Copies Available 

From: Securities and Exchange 


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