Document ID: SEC-2022-1614-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Investors Exchange, LLC
Posted Date: 2022-12-16T05:00Z

[Federal Register Volume 87, Number 241 (Friday, December 16, 2022)]
[Notices]
[Pages 77152-77157]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27163]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96473); File No. SR-IEX-2022-11]

Self-Regulatory Organizations; Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX 
Rule 2.160 (Registration Requirements and Restrictions on Membership)

December 9, 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 November 28, 2022, the Investors Exchange LLC (``IEX'' 
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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78S(B)(1).
    \2\ 15 U.S.C. 78A.
    \3\ 17 CFR 240.19B-4.
---------------------------------------------------------------------------

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

    Pursuant to the provisions of section 19(b)(1) under the Act,\4\ 
and Rule 19b-4 thereunder,\5\ the Exchange is filing with the 
Commission a proposed rule change to amend IEX Rule 2.160. The Exchange 
has designated this proposal as non-controversial pursuant to Section 
19(b)(3)(A)(iii) of the Act \6\ and provided the Commission with the 
notice required by Rule 19b-4(f)(6)(iii) thereunder.\7\
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78S(B)(1).
    \5\ 17 CFR 240.19B-4.
    \6\ 15 U.S.C. 78S(B)(3)(A).
    \7\ 17 CFR 240.19B-4(F)(6)(III).
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Exchange's 
website at www.iextrading.com, at the principal

[[Page 77153]]

office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and the 
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 statement 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    IEX is proposing to amend sections of IEX Rule 2.160 that relate to 
continuing education requirements, lapses of registration of the 
Securities Industry Essentials (``SIE'') examination, and waivers of 
examinations for certain individuals working for a financial services 
affiliate of a Member.\8\ The proposed rule change is based on changes 
to registration and continuing education requirements made by the 
Financial Industry Regulatory Authority, Inc. (``FINRA''), including a 
change to require that the Regulatory Element of continuing education 
be completed annually rather than every three years, and to provide a 
path through continuing education for individuals to maintain their 
qualification following the termination of a registration.\9\
---------------------------------------------------------------------------

    \8\ SEE IEX RULE 1.160(S) (DEFINING ``MEMBER'').
    \9\ SEE SECURITIES EXCHANGE ACT RELEASE NO. 93097 (SEPTEMBER 21, 
2021), 86 FR 53358 (SEPTEMBER 27, 2021) (SR-FINRA-2021-015) (THE 
``FINRA APPROVAL ORDER''). OTHER EXCHANGES HAVE ALSO FILED RULE 
CHANGES HARMONIZING THEIR REGISTRATION REQUIREMENTS AND CONTINUING 
EDUCATION RULES WITH THOSE OF FINRA, SO AS TO PROMOTE UNIFORM 
STANDARDS ACROSS THE SECURITIES INDUSTRY. SEE E.G., SECURITIES 
EXCHANGE ACT RELEASE NO. 94400 (MARCH 11, 2022), 87 FR 15286 (MARCH 
17, 2022) (SR-NASDAQ-2022-021); SECURITIES EXCHANGE ACT RELEASE NO. 
94429 (MARCH 16, 2022), 87 FR 16268 (MARCH 22, 2022) (SR-MEMX-2022-
05); SECURITIES EXCHANGE ACT RELEASE NO. 95414 (AUGUST 3, 2022), 87 
FR 48527 (AUGUST 9, 2022) (SR-BOX-2022-23).
---------------------------------------------------------------------------

1. Background
    In IEX Rule 2.160(p), the Exchange sets forth certain continuing 
education (``CE'') requirements for its Members including requirements 
to participate in the Regulatory and Firm Elements of training, which 
are generally based on certain FINRA Rules.\10\ The Regulatory Element 
focuses on regulatory requirements, and the Firm Element focuses on 
enhancing covered registered persons' securities knowledge, skill, and 
professionalism. The Regulatory Element CE program is administered to 
industry participants by FINRA.\11\ Furthermore, FINRA's rule filing 
amended Rules 1210.09 (``Waiver of Examinations for Individuals Working 
for a Financial Services Industry Affiliate of a Member'') and 1210.08 
(``Lapse of Registration and Expiration of SIE''), which are mirrored 
by Supplementary Material .01 to IEX Rule 2.160(g) and Rule 
2.160(o).\12\ The Exchange seeks to amend its rules to more closely 
mirror FINRA Rules, as amended.\13\
---------------------------------------------------------------------------

    \10\ SEE FINRA RULE 1210 (REGISTRATION REQUIREMENTS) AND 1240 
(CONTINUING EDUCATION REQUIREMENTS).
    \11\ SEE IEX RULE 2.160(P)(A)(6).
    \12\ SEE FINRA APPROVAL ORDER, SUPRA NOTE 9.
    \13\ ID.
---------------------------------------------------------------------------

2. Proposed Rule Change
    FINRA has participated in extensive work with the Securities 
Industry/Regulatory Council on Continuing Education (``CE Council'') 
that has resulted in amendments to FINRA Rules 1210 and 1240.\14\ 
Following these changes, the Exchange seeks to align its registration 
and continuing education requirements with those of FINRA by making the 
following changes to IEX Rule 2.160.
---------------------------------------------------------------------------

    \14\ ID.
---------------------------------------------------------------------------

A. Transition to Annual Regulatory Element for Registered Persons
    Currently, the Regulatory Element prescribed in IEX Rule 
2.160(p)(a) sets forth that training must be completed every three 
years, and the content is broad in nature. Based on changes in 
technology and learning theory, the Regulatory Element content can be 
updated and delivered in a timelier fashion and tailored to each 
registration category, which would further the goals of the Regulatory 
Element.\15\ Therefore, to align the Exchange's Rules with changes made 
by FINRA and to provide registered persons with more timely and 
relevant training on significant regulatory developments, the Exchange 
proposes amending IEX Rule 2.160(p)(a) to require registered persons to 
complete the Regulatory Element annually by December 31, with the first 
compliance date December 31, 2023.\16\ The proposed amendment would 
also require registered persons to complete the Regulatory Element 
content for each representative or principal registration category that 
they hold, which would also further the goals of the Regulatory 
Element.\17\ Under the proposed rule change, registered representatives 
will have the flexibility to complete the Regulatory Element sooner 
than December 31 of each year.\18\ Registered persons who would be 
registering as a representative or principal for the first time on or 
after the implementation date of the proposed rule change would be 
required to complete their initial Regulatory Element for that 
registration category in the next calendar year following their 
registration.\19\ In addition, subject to specified conditions, 
registered persons who would be reregistering as a representative or 
principal on or after the implementation date of the proposed rule 
change would also be required to complete their initial Regulatory 
Element for that registration category in the next calendar year 
following their reregistration.\20\
---------------------------------------------------------------------------

    \15\ WHEN THE FINRA 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).
    \16\ SEE PROPOSED IEX RULE 2.160(P)(A)(1).
    \17\ ID.
    \18\ ID.
    \19\ ID.
    \20\ SEE PROPOSED IEX RULE 2.160(P)(A)(4).
---------------------------------------------------------------------------

    Consistent with current requirements, registered persons who fail 
to complete their Regulatory Element within the prescribed period would 
be automatically designated as inactive.\21\ However, the proposed rule 
change preserves the Exchange's ability to extend the time by which a 
registered persons must complete the Regulatory Element for good cause 
shown.\22\
---------------------------------------------------------------------------

    \21\ SEE PROPOSED IEX RULE 2.160(P)(A)(2).
    \22\ THE PROPOSED RULE CHANGE CLARIFIES THAT THE REQUEST FOR AN 
EXTENSION OF TIME MUST BE IN WRITING AND INCLUDE SUPPORTING 
DOCUMENTATION, WHICH IS CONSISTENT WITH CURRENT PRACTICE.
---------------------------------------------------------------------------

    The Exchange also proposes amending IEX Rule 2.160(p)(a)(2) to 
clarify that: (1) individuals who are

[[Page 77154]]

designated as inactive would be required to complete all of their 
pending and upcoming annual Regulatory Element, including any annual 
Regulatory Element that becomes due during their CE inactive period, to 
return to active status; \23\ (2) the two-year CE inactive period is 
calculated from the date individuals become CE inactive, and it 
continues to run regardless of whether individuals terminate their 
registrations; \24\ (3) individuals who become subject to a significant 
disciplinary action may be required to complete assigned continuing 
education content as prescribed by the Exchange; \25\ (4) individuals 
who have not completed any Regulatory Element content for a 
registration category in the calendar year(s) prior to reregistering 
would not be approved for registration for that category until they 
complete that Regulatory Element content, pass an examination for that 
registration category or obtain an unconditional examination waiver for 
that registration category, whichever is applicable; \26\ and (5) the 
Regulatory Element requirements apply to individuals who are 
registered, or in the process of registering, as a representative or 
principal.\27\ The Exchange notes that it also proposes to make 
conforming changes to IEX Rule 2.160(p)(a) to further align the IEX 
Rule with FINRA Rule 1240(a).
---------------------------------------------------------------------------

    \23\ SEE PROPOSED IEX RULE 2.160(P)(A)(2).
    \24\ ID.
    \25\ SEE PROPOSED IEX RULE 2.160(P)(A)(3).
    \26\ SEE PROPOSED IEX RULE 2.160(P)(A)(4).
    \27\ ID.
---------------------------------------------------------------------------

    Under the proposed rule change, the amount of content that 
registered persons would be required to complete in a three-year, 
annual cycle for a particular registration category is expected to be 
comparable to what most registered persons are currently completing 
every three years. In some years, there may be more required content 
for some registration categories depending on the volume of rule 
changes and regulatory issues. In addition, an individual who holds 
multiple registrations may be required to complete additional content 
compared to an individual who holds a single registration because, as 
noted above, individuals would be required to complete content specific 
to each registration category that they hold. However, individuals with 
multiple registrations would not be subject to duplicative regulatory 
content in any given year. The more common registration combinations 
would likely share much of their relevant regulatory content each year. 
For example, individuals registered as General Securities 
Representatives and General Securities Principals would receive the 
same content as individuals solely registered as General Securities 
Representatives, supplemented with a likely smaller amount of 
supervisory-specific content on the same topics. The less common 
registration combinations may result in less topic overlap and more 
content overall.
B. Changes to Firm Element
    IEX Rule 2.160(p)(b) (Firm Element) currently requires each firm to 
develop and administer an annual Firm Element training program for any 
person registered with a Member who has direct contact with customers 
in the securities business of the Member relating to activity that 
occurs on the Exchange (a ``covered registered person'').\28\ The rule 
requires firms to conduct an annual needs analysis to determine the 
appropriate training for covered registered persons.\29\ 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.\30\ A firm, consistent with its needs 
analysis, may determine to apply toward the Firm Element other required 
training.\31\
---------------------------------------------------------------------------

    \28\ SEE IEX RULE 2.160(P)(B)(1).
    \29\ SEE IEX RULE 2.160(P)(B)(2).
    \30\ ID.
    \31\ SEE IEX RULE 2.160(P)(B)(4).
---------------------------------------------------------------------------

    To better align the Firm Element requirement with other required 
training, IEX proposes amending IEX Rule 2.160(p)(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\ IEX 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 Supplementary Material .01 to IEX Rule 2.160(e), 
thereby further aligning the Firm Element requirement with other 
broadly-based training requirements.\33\ In conjunction with this 
proposed change, IEX proposes modifying the current minimum training 
criteria under IEX Rule 2.160(p)(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, and removing the not role-specific current requirements 
that the Firm Element training at a minimum cover: (1) general 
investment features and associated risk factors; (2) suitability and 
sales practice considerations; and (3) applicable regulatory 
requirements.\34\
---------------------------------------------------------------------------

    \32\ SEE PROPOSED IEX RULE 2.160(P)(B)(2)(D).
    \33\ AS DISCUSSED, INFRA, THE EXCHANGE IS PROPOSING TO MAKE 
THREE NON-SUBSTANTIVE CONFORMING EDITS TO IEX RULE 2.160(P)(A)(1) BY 
CORRECTING THE REFERENCES TO ``COMMENTARY .02 TO RULE 2.160'' TO 
PROPERLY CITE TO ``SUPPLEMENTARY MATERIAL .01 TO RULE 2.160(E)'' AND 
CORRECTING REFERENCES TO ``COMMENTARY .01 TO RULE 2.160(G)'' TO 
PROPERLY CITE TO ``SUPPLEMENTARY MATERIAL .01 TO RULE 2.160(G).
    \34\ SEE PROPOSED IEX RULE 2.160(P)(B)(2)(B).
---------------------------------------------------------------------------

C. Termination of Registration
    Currently, individuals whose registrations as representatives or 
principals have been terminated for two or more years may reregister as 
representatives or principals only if they requalify by retaking and 
passing the applicable representative- or principal-level examination 
or if they obtain a waiver of such examination(s) (the ``two-year 
qualification period'').\35\ 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.
---------------------------------------------------------------------------

    \35\ SEE IEX RULE 2.160(O). THE TWO-YEAR QUALIFICATION PERIOD IS 
CALCULATED FROM THE DATE INDIVIDUALS TERMINATE THEIR REGISTRATION 
AND THE DATE FINRA RECEIVES A NEW APPLICATION FOR REGISTRATION. THE 
TWO-YEAR QUALIFICATION PERIOD DOES NOT APPLY TO INDIVIDUALS WHO 
TERMINATE A LIMITED REGISTRATION CATEGORY THAT IS A SUBSET OF A 
BROADER REGISTRATION CATEGORY FOR WHICH THEY REMAIN QUALIFIED. FOR 
INSTANCE, IT WOULD NOT APPLY TO AN INDIVIDUAL WHO MAINTAINS HIS 
REGISTRATION AS A GENERAL SECURITIES REPRESENTATIVE BUT WHO 
TERMINATES HIS REGISTRATION AS AN INVESTMENT COMPANY AND VARIABLE 
CONTRACTS PRODUCTS REPRESENTATIVE. SUCH INDIVIDUALS HAVE THE OPTION 
OF REREGISTERING IN THE MORE LIMITED REGISTRATION CATEGORY WITHOUT 
HAVING TO REQUALIFY BY EXAMINATION OR OBTAIN AN EXAMINATION WAIVER 
SO LONG AS THEY CONTINUE TO REMAIN QUALIFIED FOR THE BROADER 
REGISTRATION CATEGORY. FURTHER, THE TWO-YEAR QUALIFICATION PERIOD 
ONLY APPLIES TO THE REPRESENTATIVE--AND PRINCIPAL-LEVEL 
EXAMINATIONS; IT DOES NOT EXTEND TO THE SECURITIES INDUSTRY 
ESSENTIALS (``SIE'') EXAMINATION. THE SIE EXAMINATION IS VALID FOR 
FOUR YEARS, BUT HAVING A VALID SIE EXAMINATION ALONE DOES NOT 
QUALIFY AN INDIVIDUAL FOR REGISTRATION AS A REPRESENTATIVE OR 
PRINCIPAL.
---------------------------------------------------------------------------

    IEX proposes to amend IEX Rule 2.160(o) to provide that a person 
whose registration has been terminated for more than two years in a 
registration

[[Page 77155]]

category will not be required to pass a representative qualification 
examination appropriate to that registration category if the person has 
maintained his or her qualification status for that registration 
category in accordance with the maintaining qualifications program 
detailed infra.\36\
---------------------------------------------------------------------------

    \36\ SEE PROPOSED IEX RULE 2.160(P)(C).
---------------------------------------------------------------------------

    And the Exchange proposes to amend Supplementary Material .01 to 
IEX Rule 2.160(g), which describes the process for a waiver of 
examinations for individuals working for a financial services industry 
affiliate of a Member, to reflect that the waiver program stopped 
accepting applications on March 15, 2022. IEX makes this proposal 
because of the proposed changes to the Regulatory Element discussed 
supra that make completion of the Regulatory Element an annual 
requirement, which would also apply to people eligible for the 
financial services industry affiliate waiver program (``FSAWP'').
D. Maintenance of Qualification After Termination of Registration
    The Exchange proposes adopting subparagraph (c) under IEX Rule 
2.160(p) and Supplementary Material .01 and .02 to IEX Rule 2.160(p)(c) 
to provide eligible individuals who terminate any of their 
representative or principal registrations the option of maintaining 
their qualification for any of the terminated registrations by 
completing continuing education. The proposed rule change would not 
eliminate the two-year qualification period set forth in IEX Rule 
2.160(p)(a)(2). 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; \37\
---------------------------------------------------------------------------

    \37\ SEE PROPOSED IEX RULE 2.160(P)(C)(1).
---------------------------------------------------------------------------

     Individuals could elect to participate when they terminate 
a registration or within two years from the termination of a 
registration; \38\
---------------------------------------------------------------------------

    \38\ SEE PROPOSED IEX RULE 2.160(P)(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.
---------------------------------------------------------------------------

     Individuals would be required to complete annually all 
prescribed continuing education; \39\
---------------------------------------------------------------------------

    \39\ SEE PROPOSED IEX RULE 2.160(P)(C)(3).
---------------------------------------------------------------------------

     Individuals would have a maximum of five years in which to 
reregister; \40\
---------------------------------------------------------------------------

    \40\ SEE PROPOSED IEX RULE 2.160(P)(C).
---------------------------------------------------------------------------

     Individuals who have been inactive for two consecutive 
years, or who become inactive for two consecutive years during their 
participation, would not be eligible to participate or continue; \41\ 
and
---------------------------------------------------------------------------

    \41\ SEE PROPOSED IEX RULE 2.160(P)(C)(4) AND (C)(5).
---------------------------------------------------------------------------

     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.\42\
---------------------------------------------------------------------------

    \42\ SEE PROPOSED IEX RULE 2.160(P)(C)(1) AND (C)(6).
---------------------------------------------------------------------------

    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, if they 
satisfy the other participation conditions and limitations.\43\
---------------------------------------------------------------------------

    \43\ SEE PROPOSED SUPPLEMENTARY MATERIAL .01 TO IEX RULE 
2.160(P)(C).
---------------------------------------------------------------------------

E. Conforming Changes
    IEX also proposes to make conforming edits to IEX Rule 2.160 to 
better align the rule text with FINRA Rules 1210 and 1240. 
Additionally, IEX proposes to make three non-substantive conforming 
edits to IEX Rule 2.160(p)(a)(1) by correcting the references to 
``Commentary .02 to Rule 2.160'' to properly cite to ``Supplementary 
Material .01 to Rule 2.160(e)'' and correcting references to 
``Commentary .01 to Rule 2.160(g)'' to properly cite to ``Supplementary 
Material .01 to Rule 2.160(g), in order to align the terminology used 
in these rules with the rest of IEX's rulebook.
F. CE Program Implementation
    As stated in the FINRA Approval Order, 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.\44\ As it 
relates to the rule changes themselves, the FINRA changes relating to 
the Maintaining Qualifications Program and the FSAWP had an 
implementation date of March 15, 2022.\45\ The Exchange's proposed 
changes to the Maintaining Qualifications Program (subparagraph (c) of 
Rule 2.160(p)) and to the FSAWP (Supplementary Material .01 to Rule 
2.160(g)) will become effective on the date this proposed rule change 
is filed. All other changes related to the FINRA Approval Order 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.\46\
---------------------------------------------------------------------------

    \44\ SEE FINRA APPROVAL ORDER, SUPRA NOTE 9. AS DESCRIBED IN 
MORE DETAIL IN THE FINRA APPROVAL ORDER, 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.
    \45\ SEE FINRA REGULATORY NOTICE 21-41 AT https://WWW.FINRA.ORG/RULES-GUIDANCE/NOTICES/21-41.
    \46\ ID.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of Sections 6(b) \47\ and 6(b)(5) of the Act,\48\ in 
particular, in that it is designed to promote just and equitable 
principles of trade, 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.
---------------------------------------------------------------------------

    \47\ 15 U.S.C. 78F(B).
    \48\ 15 U.S.C. 78F(B)(5).
---------------------------------------------------------------------------

    As noted above, the proposed rule change seeks to align the 
Exchange Rules with changes to FINRA rules which have been approved by 
the Commission.\49\ The Exchange believes the proposed rule change is 
consistent with the provisions of section 6(b)(5) of the Act,\50\ 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

[[Page 77156]]

investors and the public interest, and section 6(c)(3) of the Act,\51\ 
which authorizes the Exchange to prescribe standards of training, 
experience and competence for persons associated with Exchange. The 
proposed changes are based on the changes approved by the Commission in 
the FINRA Approval Order,\52\ and the Exchange is proposing to adopt 
such changes substantially in the same form proposed by FINRA with the 
notable exception that this proposed rule change does not apply 
retroactively, and the date FINRA implemented the changes to its CE 
program has already passed.\53\ The Exchange believes the proposal is 
consistent with the Act for the reasons described above and for those 
reasons cited in the FINRA Approval Order.\54\
---------------------------------------------------------------------------

    \49\ SEE FINRA APPROVAL ORDER, SUPRA NOTE 9.
    \50\ 15 U.S.C. 78F(B)(5).
    \51\ 15 U.S.C. 78F(C)(3).
    \52\ SEE FINRA APPROVAL ORDER, SUPRA NOTE 9.
    \53\ OTHERWISE, IEX'S PROPOSED RULE CHANGES ARE SUBSTANTIALLY 
SIMILAR TO THE CHANGES IN THE FINRA APPROVAL ORDER, WITH ONLY NON-
SUBSTANTIVE DIFFERENCES IN THE NOMENCLATURE AND ORGANIZATION OF 
IEX'S AND FINRA'S REGISTRATION REQUIREMENT AND CONTINUING EDUCATION 
RULES (E.G., FINRA RULE 1210.07, WHICH IS PART OF FINRA'S 
REGISTRATION REQUIREMENT RULE, IS EQUIVALENT TO IEX RULE 
2.160(P)(A)(1), WHICH IS PART OF IEX'S CONTINUING EDUCATION RULE).
    \54\ SEE FINRA APPROVAL ORDER, SUPRA NOTE 9.
---------------------------------------------------------------------------

    The Exchange believes the proposed changes to the Regulatory 
Element and Firm Element will help 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.
    Finally, the Exchange believes that the proposed conforming changes 
to its continuing education and registration rules will enhance 
compliance and investor protection by better aligning these rules with 
the rules changed by FINRA, as well as aligning the terminology used 
within these rules with the IEX Rule Book.

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 rule changes 
adopted by FINRA, will reduce the regulatory burden placed on market 
participants engaged in trading activities across different markets.

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

    Written comments were neither solicited nor received.

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

    Because the 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 and Rule 19b-4(f)(6) thereunder.\55\
---------------------------------------------------------------------------

    \55\ 17 CFR 240.19B-4(F)(6).
---------------------------------------------------------------------------

    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) \56\ 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.
---------------------------------------------------------------------------

    \56\ 17 CFR 240.19B-4(F)(6)(III).
---------------------------------------------------------------------------

    Waiver of the 30-day operative delay will allow the Exchange to 
implement the proposed changes to its continuing education and 
registration rules without delay, thereby eliminating the material 
differences between FINRA and Exchange continuing education rules, 
providing more uniform standards across the securities industry, and 
helping to avoid ongoing confusion for Exchange Members 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.\57\
---------------------------------------------------------------------------

    \57\ FOR 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).
---------------------------------------------------------------------------

    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 [email protected]. Please include 
File Number SR-IEX-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-IEX-2022-11. This file 
number should be included in 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

[[Page 77157]]

Reference Section, 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 will also be available for inspection and copying at the 
IEX's principal office and on its internet website at 
www.iextrading.com. 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-IEX-2022-11 
and should be submitted on or before January 6, 2023. For the 
Commission, by the Division of Trading and Markets, pursuant to 
delegated authority.\58\
---------------------------------------------------------------------------

    \58\ 17 CFR 200.30-3(A)(12).

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27163 Filed 12-15-22; 8:45 am]
BILLING CODE 8011-01-P