Document ID: SEC-2021-1251-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Municipal Securities Rulemaking Board
Posted Date: 2021-09-16T04:00Z

[Federal Register Volume 86, Number 177 (Thursday, September 16, 2021)]
[Notices]
[Pages 51696-51698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19973]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92938; File No. SR-MSRB-2021-05]

Self-Regulatory Organizations; Municipal Securities Rulemaking 
Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change To Provide a Further Extension of Time To Become Appropriately 
Qualified by Passing the Municipal Advisor Principal Qualification 
Examination (Series 54) Pursuant to MSRB Rule G-3, on Professional 
Qualification Requirements

September 10, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on September 2, 2021 the Municipal Securities 
Rulemaking Board (``MSRB'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the MSRB. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The MSRB filed with the Commission a proposed rule change to amend 
Supplementary Material .09, Temporary Relief for Municipal Advisor 
Principal, of MSRB Rule G-3, on professional qualification 
requirements, to provide a further extension of time for those 
individuals who meet the definition of a municipal advisor principal 
\3\ to become appropriately qualified by passing the Municipal Advisor 
Principal Qualification Examination (``Series 54 examination''). The 
MSRB has designated the proposed rule change as constituting a 
``noncontroversial'' rule

[[Page 51697]]

change under Section 19(b)(3)(A) \4\ of the Act and Rule 19b-4(f)(6) 
\5\ thereunder, which renders the proposal effective upon receipt of 
this filing by the Commission.
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    \3\ The term ``municipal advisor principal'' is defined in MSRB 
Rule G-3(e)(i) to mean a natural person associated with a municipal 
advisor who is qualified as a municipal advisor representative and 
is directly engaged in the management, direction or supervision of 
the municipal advisory activities of the municipal advisor and its 
associated persons.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
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    The text of the proposed rule change is available on the MSRB's 
website at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2021-Filings.aspx, at the MSRB's principal office, 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 MSRB 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 MSRB 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
    In April 2020, and again in December 2020, the MSRB filed proposed 
rule changes for immediate effectiveness with the SEC that provided 
regulatory relief on a temporary basis to municipal advisors and 
dealers in response to the operational challenges and disruptions to 
normal business functions as a result of the coronavirus disease 
(``COVID-19'') pandemic (``April relief'' and ``December relief'').\6\ 
In connection with the MSRB's April relief, due to the uncertainty 
regarding ongoing stay-at-home orders and social distance restrictions 
that impacted capacity at Prometric testing centers,\7\ the MSRB 
adopted Supplementary Material .09 of MSRB Rule G-3 to extend the date 
by which individuals were required to become qualified with the Series 
54 examination from November 12, 2020 to March 31, 2021. In its 
December relief, due to the protracted nature of the pandemic, the MSRB 
amended Supplementary Material .09 of MSRB Rule G-3 a second time to 
extend the time period further from March 31, 2021 to November 12, 
2021, for individuals to become qualified with the Series 54 
examination.\8\
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    \6\ See Exchange Act Release No. 88694 (April 20, 2020), 85 FR 
23088 (April 24, 2020) (File No. SR-MSRB-2020-01). See Exchange Act 
Release No. 90621 (December 9, 2020), 85 FR 81254 (December 15, 
2020) (File No. SR-MSRB-2020-09).
    \7\ FINRA uses Prometric as its single vendor for the delivery 
of professional qualification examinations, including MSRB-owned 
professional qualification examinations.
    \8\ The April and December relief extended the initial one-year 
grace-period, previously set to expire on November 12, 2020, to 
allow individuals functioning as municipal advisor principals to 
continue to engage in the management, direction or supervision of 
the municipal advisory activities of the municipal advisor and its 
associated persons, so long as such persons are qualified with the 
Municipal Advisor Representative Qualification Examination (``Series 
50'').
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    The proposed amendment to Supplementary Material .09 of MSRB Rule 
G-3 would further extend the time period from November 12, 2021 to 
November 30, 2021, for individuals to become qualified with the Series 
54 examination. This time extension is being proposed in connection 
with the MSRB's efforts to facilitate the remote proctoring of the 
Series 54 examination; and notably, the proposed extension of time 
roughly coincides with the number of days taken to launch the Series 54 
examination online.\9\ On August 11, 2021, the MSRB announced, given 
the quickly approaching compliance date by which individuals have to 
take and pass the Series 54 examination and in recognition of pandemic-
related challenges, the MSRB would provide an interim accommodation to 
allow individuals to take the Series 54 examination online. 
Specifically, the Series 54 examination was made available to take 
online beginning on August 23, 2021 and will be available to take 
online until November 30, 2021.\10\ The Financial Industry Regulatory 
Authority (``FINRA''), as designated by the Commission, provides test 
administration services to the MSRB for the delivery of MSRB-owned 
professional qualification examinations and is facilitating the 
delivery of the Series 54 examination online.\11\ The MSRB believes 
that the extension of time is appropriate given the quick nature in 
which the Series 54 examination was launched online, on account of 
exigent circumstances, and that the extension affords individuals time 
to engage in informed decision making regarding how to test. Relatedly, 
permitting the remote proctoring of the Series 54 examination, on a 
temporary basis, as well as ongoing in-person testing at Prometric 
testing centers, will facilitate compliance with MSRB Rule G-3(e)(ii) 
during the pandemic.
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    \9\ The launch of the Series 54 examination online took 
approximately 12 days from the date the MSRB announced the exam 
would be made available online. The MSRB is proposing to extend the 
compliance date by 18 days taking into consideration the 
Thanksgiving holiday.
    \10\ See MSRB Notice 2021-10 (August 11, 2021), ``MSRB Provides 
Interim Accommodation for Municipal Advisor Principal Qualification 
Examination (Series 54 Exam),'' available at https://www.msrb.org/-/media/Files/Regulatory-Notices/Announcements/2021-10.ashx??n=1.
    \11\ See, e.g., Exchange Act Release No. 75714 (August 17, 
2015), 80 FR 50883 (August 21, 2015) (Designation of the Financial 
Industry Regulatory Authority to Administer Professional 
Qualification Tests for Associated Persons of Registered Municipal 
Advisors). Individuals who wish to take the Series 54 examination 
online must first complete ``FINRA Online Exam Administration 
Request Form,'' available at https://www.finra.org/registration-exams-ce/qualification-exams/online-exam-administration.
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    The MSRB proposes this interim accommodation in recognition of the 
approaching compliance date for municipal advisors to have at least one 
person appropriately qualified as a municipal advisor principal; and 
therefore, the accommodation is offered only with respect to the Series 
54 examination.
2. Statutory Basis
    Section 15B(b)(2)(A) of the Act \12\ authorizes the MSRB to 
prescribe:
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    \12\ 15 U.S.C. 78o-4(b)(2)(A).

. . . standards of training, experience, competence, and such other 
qualifications as the Board finds necessary or appropriate in the 
public interest or for the protection of investors and municipal 
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entities or obligated persons.

The MSRB believes that the proposed rule change is consistent with this 
provision as those acting in the capacity of a municipal advisor 
principal would still be subject to the regulatory requirements under 
MSRB Rule G-3, including the requirement to be qualified with the 
Series 50 examination, which is a prerequisite to taking and passing 
the Series 54 examination in order to become qualified as a municipal 
advisor principal. Accordingly, the proposed amendments do not relieve 
municipal advisors from compliance with underlying obligations that 
directly serve to protect investors, municipal entities, obligated 
persons and the public interest. The extension of time will provide an 
opportunity for individuals to review the information provided by the 
MSRB on remote proctoring of exams; make an informed decision regarding 
how to test; complete the relevant FINRA form, as necessary; and take 
the exam in furtherance of MSRB Rule G-3, which was promulgated in 
furtherance of the Exchange Act. The extension provides a reasonable 
amount of time to facilitate remote proctoring and enhances compliance 
by providing greater opportunities for individuals to take the Series 
54 examination.

[[Page 51698]]

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

    Section 15B(b)(2)(C) of the Act requires that MSRB rules be 
designed not to impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act.\13\ The MSRB 
believes that the proposed rule change will not impose any burden on 
competition not necessary or appropriate in furtherance of the Exchange 
Act. The goal of the proposed rule change is to provide temporary 
relief to grant additional time for municipal advisors to meet certain 
obligations under MSRB rules during the exigent circumstances of the 
COVID-19 pandemic but would not alter their underlying obligations 
under MSRB rules. Not only does the proposed rule change not burden 
competition, but as set forth below, it may result in a benefit to 
competition.
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    \13\ 15 U.S.C. 78o-4(b)(2)(C).
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    Additionally, Section 15B(b)(2)(L)(iv) of the Exchange Act, 
requires that MSRB rules not impose a regulatory burden on small 
municipal advisors that is not necessary or appropriate in the public 
interest and for the protection of investors, municipal entities, and 
obligated persons, provided that there is robust protection of 
investors against fraud.\14\ The MSRB believes that the proposed rule 
change is consistent with Section 15B(b)(2)(L)(iv) of the Exchange Act 
\15\ in that, while the proposed rule change to extend the date by 
which individuals have to pass the Series 54 examination will affect 
all municipal advisors, including small municipal advisors, there is no 
new regulatory burden that results. Small municipal advisors typically 
have fewer associated persons and, as a result, their resources may be 
more limited during the pandemic and the benefits of the proposed rule 
change may provide smaller municipal advisors a greater benefit given 
their limited resources. In addition, the MSRB believes that extending 
the compliance date by approximately 2\1/2\ weeks may serve to benefit 
small municipal advisors by providing greater opportunity for 
individuals to prepare for, take and pass the Series 54 examination and 
for municipal advisors to meet their compliance obligation to have at 
least one person properly qualified by passing the Series 54 
examination by the compliance date.
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    \14\ 15 U.S.C. 78o-4(b)(2)(L)(iv).
    \15\ Id.
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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 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 \16\ and Rule 19b-
4(f)(6) \17\ thereunder. 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.
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(6).
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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-MSRB-2021-05 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-MSRB-2021-05. 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 MSRB. 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-MSRB-2021-05 and should be submitted on 
or before October 7, 2021.

    For the Commission, pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19973 Filed 9-15-21; 8:45 am]
BILLING CODE 8011-01-P