[Federal Register Volume 87, Number 19 (Friday, January 28, 2022)]
[Notices]
[Pages 4680-4683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01703]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94040; File No. SR-GEMX-2022-02]


Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend References 
to FINRA Continuing Education Fees

January 24, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on January 11, 2022, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') 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 Exchange. 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\ 17 CFR 240.19b-4.

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

[[Page 4681]]

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

    The Exchange proposes to amend GEMX's Pricing Schedule at Options 
7, Section 5, Legal & Regulatory, to reflect adjustments to FINRA 
Continuing Education Fees.
    While the changes proposed herein are effective upon filing, the 
Exchange has designated the new Maintaining Qualifications Program 
(``MQP'') Fee, elimination of the $100 Continuing Education Session 
Fee, and technical amendments to become operative on January 31, 2022. 
Additionally, the Exchange designates an $18 Continuing Education 
Regulatory Element Session Fee to become operative on January 1, 
2023.\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 93928 (January 7, 
2022) (SR-FINRA-2021-034).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/gemx/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

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

    In its filing with the Commission, the Exchange 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 Exchange 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
    This proposal amends GEMX's Pricing Schedule at Options 7, Section 
5, Legal & Regulatory, to reflect adjustments to FINRA Continuing 
Education Fees.\4\ The FINRA fees are collected and retained by FINRA 
via Web CRD for the registration of employees of GEMX Members that are 
not FINRA members (``Non-FINRA members''). The Exchange is merely 
listing these fees on its Pricing Schedule. The Exchange does not 
collect or retain these fees.
---------------------------------------------------------------------------

    \4\ FINRA operates Web CRD, the central licensing and 
registration system for the U.S. securities industry. FINRA uses Web 
CRD to maintain the qualification, employment and disciplinary 
histories of registered associated persons of broker-dealers.
---------------------------------------------------------------------------

    Today, GEMX Options 7, Section 5B, provides a list of FINRA Web CRD 
Fees, Fingerprint Processing Fees, and Continuing Education Fees. The 
Exchange proposes to amend the Continuing Education Fees within Options 
7, Section 5B on behalf of the Exchange. The fees listed within Options 
7, Section 5B reflect fees set by FINRA.
    Specifically, the Exchange proposes to decrease the $55 Continuing 
Education Web-based Fee to $18. This amendment is made in accordance 
with a recent FINRA rule change to adjust to its fees.\5\ FINRA 
currently charges a fee of $55 to each individual who completes the 
Regulatory Element of the Continuing Education Requirements pursuant to 
Exchange General 4, Section 1240. In conjunction with the amendments to 
transition to an annual Regulatory Element requirement, FINRA amended 
the Continuing Education Regulatory Element Session Fee from $55 to 
$18.\6\ FINRA indicated in the Continuing Education Fee Filing that it 
would begin assessing the $18 Continuing Education Regulatory Element 
Session Fee as of January 1, 2023 to coincide with the effective date 
of the transition to an annual Regulatory Element requirement.\7\
---------------------------------------------------------------------------

    \5\ See note 3 above. On September 21, 2021, the SEC approved 
amendments to FINRA Rules 1210 (Registration Requirements) and 1240 
(Continuing Education Requirements) to, among other things, require 
registered persons to complete the Regulatory Element of CE annually 
by December 31 of each year, rather than every three years, and to 
complete Regulatory Element content for each representative or 
principal registration category that they hold. See Securities 
Exchange Act Release No. 93097 (September 21, 2021), 86 FR 53358 
(September 27, 2021) (Order Approving File No. SR-FINRA-2021-015). 
The Regulatory Element is administered by FINRA and focuses on 
regulatory requirements and industry standards. The proposed rule 
change also included amendments to the Firm Element training, which 
is provided by each firm annually to its registered persons and 
focuses on securities products, services and strategies the firm 
offers, firm policies and industry trends.
    \6\ FINRA notes that the proposed $18 annual fee is comparable 
to the current $55 fee over a three-year period. Moreover, the 
proposed fee for the annual Regulatory Element would be the same for 
all registered persons, regardless of the amount of annual content 
that they would be required to complete (that is, an individual who 
holds multiple registrations would be subject to the same proposed 
$18 annual fee as an individual who holds a single registration). 
See note 3 above.
    \7\ The Exchange would file to remove the rule text concerning 
the $55 fee once the $18 fee becomes operative.
---------------------------------------------------------------------------

    The Exchange proposes to eliminate the $100.00 continuing education 
fee for each individual who is required to complete the S101 or S201. 
This fee applied to continuing education programs administered at test 
centers. In 2015, FINRA filed to end test center delivery of the 
Regulatory Element.\8\ Effective October 1, 2015, Web-based delivery 
has been available for the Regulatory Element. The revised fee of $18 
is a Web-based delivery. The Exchange proposes to remove the outdated 
continuing education fee of $100 from its Pricing Schedule related to 
test center delivery.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 75581 (July 31, 
2015), 80 FR 47018 (August 6, 2015) (SR-FINRA-2015-015) (Order 
Approving a Proposed Rule Change to Provide a Web-based Delivery 
Method for Completing the Regulatory Element of the Continuing 
Education Requirements). FINRA phased out the test center delivery 
as of July 1, 2016. See FINRA Information Notice dated May 16, 2016 
(https://www.finra.org/rules-guidance/notices/information-notice-051616).
---------------------------------------------------------------------------

    The Exchange also proposes to adopt a new Maintaining 
Qualifications Program (``MQP'') Fee of $100 fee for each individual 
electing to participate in the continuing education program, following 
the termination of a registration category, under FINRA Rule 1240(c) 
for each year that such individual is participating in the program. 
Individuals who elect to participate in the MQP within two years from 
the termination of a registration would also be assessed any accrued 
annual fee. The proposed annual fee would be assessed at the time an 
eligible individual elects to participate in the continuing education 
program under FINRA Rule 1240(c) and thereafter annually each year that 
the individual continues in the program. This fee is paid directly to 
FINRA. FINRA indicated in the Continuing Education Fee Filing that it 
would begin assessing the $100 MQP fee as of January 31, 2022.
    With respect to the rule text, the current $55 Continuing Education 
Fee is being reworded to reflect the elimination of the $100 fee and 
renamed the ``Continuing Education Regulatory Element Session Fee.'' 
The $55 will remain in effect until January 1, 2023 so it is being 
retained in the Pricing Scheduled with a note that ``This fee will be 
amended on January 1, 2023 as noted below.''
    The FINRA Fees are user-based and there is no distinction in the 
cost incurred by FINRA if the user is a FINRA member or a Non-FINRA 
member. Accordingly, the proposed fees mirror those currently assessed 
by FINRA.
Technical Amendment
    The Exchange also proposes to make a technical amendment within the 
FINRA Web CRD Fees to the following sentence, ``$110--For the 
additional processing of each initial or amended

[[Page 4682]]

Form U4, Form U5 or Form BD that includes the initial reporting, 
amendment or certification of one of more disclosure events or 
proceedings.'' The Exchange proposes to change the word ``of'' to 
``or.''
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\9\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\10\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility, and is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes it is reasonable to decrease the $55 
Continuing Education Regulatory Element Session Fee for all 
Registrations to $18 in accordance with an adjustment to FINRA's 
fees.\11\ The Exchange's rule text will reflect the current rates for 
continuing education that will be assessed by FINRA as of January 1, 
2023. The proposed fee is identical to a fee adopted by FINRA related 
to its continuing education. The costs are borne by FINRA when a Non-
FINRA member engages in continuing education.
---------------------------------------------------------------------------

    \11\ See note 3 above.
---------------------------------------------------------------------------

    The Exchange believes eliminating the outdated $100 fee for 
continuing education is reasonable as test center delivery of the 
Regulatory Element was phased out in 2016 and the continuing education 
programs are no longer offered at testing centers.\12\
---------------------------------------------------------------------------

    \12\ See note 8 above.
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable to adopt a new MQP Fee 
of $100 for each individual electing to participate in the continuing 
education program under FINRA Rule 1240(c) for each year that such 
individual is participating in the program. Individuals who elect to 
participate in the program within two years from the termination of a 
registration would also be assessed any accrued annual fee. The 
proposed fee is identical to a fee adopted by FINRA related to its 
continuing education. The costs are borne by FINRA when a Non-FINRA 
member engages in continuing education.
    Further, the proposal is also equitable and not unfairly 
discriminatory because the Exchange will not be collecting or retaining 
these fees, therefore, the Exchange will not be in a position to apply 
them in an inequitable or unfairly discriminatory manner.
Technical Amendment
    The Exchange's proposal to make a technical amendment within the 
FINRA Web CRD Fees is reasonable, equitable and not unfairly 
discriminatory as it is a non-substantive amendment.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not believe 
that this proposal creates an unnecessary or inappropriate inter-market 
burden on competition as FINRA's fees apply to all market participants. 
Specifically, the Exchange does not believe that this proposal creates 
an unnecessary or inappropriate intra-market burden on competition as 
the decreased Continuing Education Regulatory Element Session Fee for 
all Registrations of $18 will be assessed by FINRA to all Members who 
are required to complete the Regulatory Element of the Continuing 
Education Requirements pursuant to Exchange General 4, Section 1240. 
Likewise, with respect to the $100 MQP Fee, the Exchange does not 
believe that this proposal creates an unnecessary or inappropriate 
intra-market burden on competition because the fee will be assessed by 
FINRA to all individuals electing to participate in the continuing 
education program under FINRA Rule 1240(c) for each year that such 
individual is participating in the program. Finally, eliminating the 
outdated $100 fee for continuing education does not create an 
unnecessary or inappropriate intra-market burden on competition as test 
center delivery of the Regulatory Element was phased out and the 
continuing education programs are no longer offered at testing 
centers.\13\ Further, the proposal does not impose an undue burden on 
competition because the Exchange will not be collecting or retaining 
these fees, therefore, the Exchange will not be in a position to apply 
them in an inequitable or unfairly discriminatory manner.
---------------------------------------------------------------------------

    \13\ See note 8 above.
---------------------------------------------------------------------------

Technical Amendment
    The Exchange's proposal to make a technical amendment within the 
FINRA Web CRD Fees does not impose an undue burden on competition as it 
is a non-substantive amendment.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\14\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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 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-GEMX-2022-02 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-GEMX-2022-02. 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

[[Page 4683]]

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; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly.
    All submissions should refer to File Number SR-GEMX-2022-02 and 
should be submitted on or before February 18, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01703 Filed 1-27-22; 8:45 am]
BILLING CODE 8011-01-P


