[Federal Register Volume 76, Number 120 (Wednesday, June 22, 2011)]
[Notices]
[Pages 36543-36544]
[FR Doc No: 2011-15570]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-D-0469]

Draft Guidance for Industry and Food and Drug Administration
Staff: Applying Human Factors and Usability Engineering To Optimize
Medical Device Design; Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the
availability of the draft guidance document entitled ``Draft Guidance
for Industry and Food and Drug Administration Staff: Applying Human
Factors and Usability Engineering to Optimize Medical Device Design.''
The recommendations in this guidance are intended to improve the safety
and effectiveness of devices and reduce use error. This draft guidance
is not final; nor is it in effect at this time.

DATES: Although you can comment on any guidance at any time (see Sec.
10.115(g)(5) (21 CFR 10.115(g)(5))), to ensure that the Agency
considers your comment on this draft guidance before it begins work on
the final version of the guidance, submit electronic or written
comments on the draft guidance by September 19, 2011.

ADDRESSES: Submit written requests for single copies of the draft
guidance document entitled ``Draft Guidance for Industry and Food and
Drug Administration Staff: Applying Human Factors and Usability
Engineering to Optimize Medical Device Design'' to the Division of
Small Manufacturers, International, and Consumer Assistance, Center for
Devices and Radiological Health, Food and Drug Administration, 10903
New Hampshire Ave., Bldg. 66, rm. 4613, Silver Spring, MD 20993-0002.
Send one self-addressed adhesive label to assist that office in
processing your request, or fax your request to<PHONE_NUMBER>. See the
SUPPLEMENTARY INFORMATION section for information on electronic access
to the guidance.
    Submit electronic comments on the draft guidance to http://www.regulations.gov. Submit written comments to the Division of Dockets
Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane,
rm. 1061, Rockville, MD 20852. Identify comments with the docket number
found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT: Molly Story, Center for Devices and
Radiological Health, Food and Drug Administration, 10903 New Hampshire
Ave., Bldg. 66, rm. 2533, Silver Spring, MD 20993-0002,<PHONE_NUMBER>,
e-mail<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    To understand use-related hazards, it is necessary to have an
accurate and complete understanding of how a device will be used.
Understanding and optimizing how people interact with technology is the
subject of human factors engineering (HFE) and usability engineering
(UE). HFE/UE considerations that are important to the development of
medical devices include three major components of the device-user
system: (1) Device users, (2) device use environments, and (3) device
user interfaces.
    For safety-critical technologies such as medical devices, the
process of eliminating or reducing design-related use problems that
contribute to or cause unsafe or ineffective medical treatment is part
of a process for controlling overall risk. For devices where harm could
result from ``use errors,'' the dynamics of user interaction are
safety-related and should be components of risk analysis and risk
management. By incorporating these considerations into the device
development process, manufacturers can reduce the overall risk level
posed by their devices, thus decreasing adverse events associated with
the device, and avoid potential device recalls.

II. Significance of Guidance

    This draft guidance is being issued consistent with FDA's good
guidance practices regulation (21 CFR 10.115). This draft guidance,
when finalized, will represent the Agency's current thinking on human
factors engineering for medical devices. It does not create or confer
any rights for or on any person and does not operate to bind FDA or the
public. An alternative approach may be used if such approach satisfies
the requirements of the applicable statute and regulations.

III. Electronic Access

    Persons interested in obtaining a copy of the draft guidance may do
so by using the Internet. A search capability is available for all CDRH
guidance documents at http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/default.htm. Guidance
documents are also available at http://www.regulations.gov. To receive
``Draft Guidance for Industry and Food and Drug Administration Staff:
Applying Human Factors and Usability Engineering to Optimize Medical
Device Design.'' you may either send an e-mail request to
<EMAIL_ADDRESS>to receive an electronic copy of the document or
send a fax request to<PHONE_NUMBER> to receive a hard copy. Please use
the document number 1757 to identify the guidance you are requesting.

IV. Paperwork Reduction Act of 1995

    This draft guidance refers to currently approved collections of
information found in FDA regulations. These

collections of information are subject to review by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520). The collections of information in 21 CFR part
820 are approved under OMB control number 0910-0073; the collections of
information in 21 CFR part 812 are approved under OMB control number
0910-0078; the collections of information in 21 CFR part 807, subpart E
are approved under OMB control number 0910-0120; the collections of
information in 21 CFR part 814, subpart B are approved under OMB
control number 0910-0231; the collections of information in 21 CFR part
814, subpart H are approved under OMB control number 0910-0332; and the
collections of information in 21 CFR part 801 are approved under OMB
control number 0910-0485.

V. Comments

    Interested persons may submit to the Division of Dockets Management
(see ADDRESSES) either electronic or written comments regarding this
document. It is only necessary to send one set of comments. It is no
longer necessary to send two copies of mailed comments. Identify
comments with the docket number found in brackets in the heading of
this document. Received comments may be seen in the Division of Dockets
Management between 9 a.m. and 4 p.m., Monday through Friday.

    Dated: June 17, 2011.
Nancy K. Stade,
Deputy Director for Policy, Center for Devices and Radiological Health.
[FR Doc. 2011-15570 Filed 6-21-11; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 87, Number 113 (Monday, June 13, 2022)]
[Notices]
[Pages 35826-35831]
[FR Doc No: 2022-12654]

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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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 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 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.
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    \4\ A Participant is a ``member'' of the Exchange for purposes
of the Act. See Article 1, Rule 1(s).
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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.
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    \5\ See Securities Exchange Act Release No. 93097 (September 21,
2021), 86 FR 53358 (September 27, 2021) (SR-FINRA-2021-015) (``FINRA
Rule Change'').
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    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.
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    \6\ Id.
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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

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\
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    \7\ See also Interpretations and Policies .06 to Article 6, Rule
13 (All Registered Persons Must Satisfy the Regulatory Element of
Continuing Education).
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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\
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    \8\ See 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[supreg]'') system. However, an
individual's registration anniversary date would be reset if the
individual has been out of the industry for two or more years and is
required to requalify by examination, or obtain an examination
waiver, in order to reregister. An individual's registration
anniversary date would also be reset if the individual obtains a
conditional examination waiver that requires them to complete the
Regulatory Element by a specified date. Non-registered individuals
who are participating in the waiver program under 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.
    \9\ See 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.
    \11\ This CE inactive two-year period is calculated from the
date such persons become CE inactive, and it continues to run
regardless of whether they terminate their registrations before the
end of the two-year period. Therefore, if registered persons
terminate their registrations while in a CE inactive status, they
must satisfy all outstanding Regulatory Element prior to the end of
the CE inactive two-year period in order to reregister with a member
without having to requalify by examination or having to obtain an
examination waiver.
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    The Regulatory Element consists of a subprogram for registered
persons generally, and a subprogram for principals and supervisors.\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\
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    \12\ The S101 (General Program for Registered Persons) and the
S201 (Registered Principals and Supervisors).
    \13\ The current content is presented in a single format leading
individuals through a case that provides a story depicting
situations that they may encounter in the course of their work.
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    The Regulatory Element was originally designed at a time when most
individuals had to complete the Regulatory Element at a test center,
and its design was shaped by the limitations of the test center-based
delivery model. In 2015, FINRA transitioned the delivery of the
Regulatory Element to an online platform (``CE Online''), which allows
individuals to complete the content online at a location of their
choosing, including their private residence. This online delivery
provides FINRA with much greater flexibility in updating content in a
timelier fashion, developing content tailored to each registration
category and presenting the material in an optimal learning format.
b. Firm Element
    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\
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    \14\ The rule defines ``covered registered persons'' as any
registered person who has direct contact with customers in the
conduct of a member's securities sales and trading activities, and
the immediate supervisors of any such persons. See Article 6, Rule
11(b)(1) (Persons Subject to the Firm Element).
    \15\ See Article 6, Rule 11(b)(2) (Standards).
    \16\ Id.
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    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 principal-level examination
or if they obtain a waiver of such examination(s) (the ``two-year
qualification period'').\17\ The

two-year qualification period was adopted prior to the creation of the
CE Program and was intended to ensure that individuals who reregister
are relatively current on their regulatory and securities knowledge.
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    \17\ See 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 Examinations) or as part
of the waiver program under Interpretations and Policies .08 to
Article 6, Rule 13.
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(ii) Proposed Rule Change
    After extensive work with the Securities Industry/Regulatory
Council on Continuing Education (``CE Council'') and discussions with
stakeholders, including industry participants and the North American
Securities Administrators Association (``NASAA''), FINRA 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.
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    \18\ See 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/council-recommendations-final-.pdf. The CE Council is composed of
securities industry representatives and representatives of SROs. The
CE Council was formed in 1995 upon a recommendation from the
Securities Industry Task Force on Continuing Education and was
tasked with facilitating the development of uniform continuing
education requirements for registered persons of broker-dealers.
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a. Transition to Annual Regulatory Element for Each Registration
Category
    As noted above, currently, the Regulatory Element generally must be
completed every three years, and the content is broad in nature. Based
on changes in technology and learning theory, the Regulatory Element
content can be updated and delivered in a timelier fashion and tailored
to each registration category, which would further the goals of the
Regulatory Element.\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.
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    \19\ When the CE Program was originally adopted in 1995,
registered persons were required to complete the Regulatory Element
on their second, fifth and 10th registration anniversary dates. See
Securities Exchange Act Release No. 35341 (February 8, 1995), 60 FR
8426 (February 14, 1995) (Order Approving File Nos. SR-AMEX-94-59;
SR-CBOE-94-49; SR-CHX-94-27; SR-MSRB-94-17; SR-NASD-94-72; SR-NYSE-
94-43; SR-PSE-94-35; and SR-PHLX-94-52). The change to the current
three-year cycle was made in 1998 to provide registered persons more
timely and effective training, consistent with the overall purpose
of the Regulatory Element. See Securities Exchange Act Release No.
39712 (March 3, 1998), 63 FR 11939 (March 11, 1998) (Order Approving
File Nos. SR-CBOE-97-68; SR-MSRB-98-02; SR-NASD-98-03; and SR-NYSE-
97-33).
    \20\ See proposed Article 6, Rules 11(a) and (a)(5).
    \21\ See proposed Article 6, Rule 13, Interpretations and
Policies .06 and Article 6, Rule 11(a).
    \22\ See proposed Article 6, Rules 11(a) and (a)(5).
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    Individuals who would be registering as a representative or
principal for the first time on or after the implementation date of the
proposed rule change would be required to complete their initial
Regulatory Element for that registration category in the next calendar
year following their registration.\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\
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    \23\ See proposed Article 6, Rule 11(a).
    \24\ See proposed Article 6, Rule 11(a)(5).
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    Consistent with current requirements, individuals who fail to
complete their Regulatory Element within the prescribed period would be
automatically designated as CE inactive.\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\
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    \25\ See 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.
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    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.
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    \27\ See proposed Article 6, Rule 11(a)(1).
    \28\ See proposed Article 6, Rule 11(a)(1).
    \29\ See 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.
    \30\ See proposed Article 6, Rule 11(a)(5).
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    Under the proposed rule change, the amount of content that
registered persons would be required to complete in a three-year,
annual cycle for a particular registration category is expected to be
comparable to what most registered persons are currently completing
every three years. 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

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.
---------------------------------------------------------------------------

    \31\ As 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.
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b. Recognition of Other Training Requirements for Firm Element and
Extension of Firm Element to All Registered Persons
    To better align the 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\
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    \32\ See proposed Article 6, Rule 11(b)(2)(D).
    \33\ See proposed Article 6, Rule 11(b)(1). As noted earlier,
the current requirement only applies to ``covered registered
persons'' and not all registered persons.
    \34\ See proposed Rule Article 6, Rule 11(b)(2)(B).
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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.
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    \35\ The 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.
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    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\
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    \36\ See proposed Article 6, Rule 11(c)(1).
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     individuals could elect to participate when they terminate
a registration or within two years from the termination of a
registration; \37\
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    \37\ See proposed 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.
---------------------------------------------------------------------------

     individuals would be required to complete annually all
prescribed continuing education; \38\
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    \38\ See 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.
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     individuals would have a maximum of five years in which to
reregister; \39\
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    \39\ See 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).
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     individuals who have been CE inactive for two consecutive
years, or who become CE inactive for two consecutive years during their
participation, would not be eligible to participate or continue; \40\
and
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    \40\ See proposed Article 6, Rules 11(c)(4) and (c)(5).
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     individuals who are subject to a statutory
disqualification, or who become subject to a statutory disqualification
following the termination of their registration or during their
participation, would not be eligible to participate or continue.\41\
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    \41\ See proposed 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).
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    The proposed rule change also includes a look-back provision that
would, subject to specified conditions, extend the proposed option to
individuals who have been registered as a representative or principal
within two years immediately prior to the implementation date of the
proposed rule change and individuals who have

been FSAWP participants immediately prior to the implementation date of
the proposed rule change.\42\
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    \42\ See proposed 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).
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    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.''
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    \43\ See proposed Interpretations and Policies .08 to Article 6,
Rule 11.
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    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\
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    \44\ See The Female Face of Family Caregiving (November 2018),
available at https://www.nationalpartnership.org/our-work/resources/economic-justice/femaleface-family-caregiving.pdf.
    \45\ See The COVID-19 Recession is the Most Unequal in Modern
U.S. History (September 30, 2020), available at https://www.washingtonpost.com/graphics/2020/business/coronavirus-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.
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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\
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    \46\ See 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.
    \47\ See FINRA Regulatory Notice 21-41 at https://www.finra.org/rulesguidance/notices/21-41.
    \48\ Id.
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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.
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    \49\ 15 U.S.C. 78f(b).
    \50\ 15 U.S.C. 78f(b)(5).
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    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.
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    \51\ See supra note 5.
    \52\ 15 U.S.C. 78f(b)(5).
    \53\ 15 U.S.C. 78f(c)(3).
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    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

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\
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    \54\ See supra note 5.
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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\
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    \55\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \56\ 17 CFR 240.19b-4(f)(6).
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    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.
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    \57\ 17 CFR 240.19b-4(f)(6)(iii).
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    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\
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    \58\ 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).
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    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-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\
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    \59\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-12654 Filed 6-10-22; 8:45 am]
BILLING CODE 8011-01-P