80_FR_51045 80 FR 50883 - Designation of the Financial Industry Regulatory Authority To Administer Professional Qualification Tests for Associated Persons of Registered Municipal Advisors

80 FR 50883 - Designation of the Financial Industry Regulatory Authority To Administer Professional Qualification Tests for Associated Persons of Registered Municipal Advisors

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 162 (August 21, 2015)

Page Range50883-50885
FR Document2015-20652

The Commission is designating the Financial Industry Regulatory Authority (``FINRA'') to administer professional qualification tests for associated persons of registered municipal advisors.

Federal Register, Volume 80 Issue 162 (Friday, August 21, 2015)
[Federal Register Volume 80, Number 162 (Friday, August 21, 2015)]
[Notices]
[Pages 50883-50885]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-20652]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75714]


Designation of the Financial Industry Regulatory Authority To 
Administer Professional Qualification Tests for Associated Persons of 
Registered Municipal Advisors

AGENCY: Securities and Exchange Commission.

ACTION: Order.

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SUMMARY: The Commission is designating the Financial Industry 
Regulatory Authority (``FINRA'') to administer professional 
qualification tests for associated persons of registered municipal 
advisors.

DATES: Effective Date: August 17, 2015.

[[Page 50884]]


FOR FURTHER INFORMATION CONTACT: Jessica Kane, Director; Rebecca Olsen, 
Deputy Director; Mary Simpkins, Senior Special Counsel; Edward Fierro, 
Attorney-Adviser; at (202) 551-5680, Office of Municipal Securities, 
U.S. Securities and Exchange Commission, 100 F Street NE., Washington, 
DC 20549-7010.

Discussion

    Section 975 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (``Dodd-Frank Act'') \1\ amended Section 15B of the 
Securities Exchange Act of 1934 (``Exchange Act'') to, among other 
things, make it unlawful for a municipal advisor to provide certain 
advice to or on behalf of a municipal entity or obligated person with 
respect to municipal financial products or the issuance of municipal 
securities, or to undertake a solicitation of a municipal entity or 
obligated person, unless the municipal advisor is registered with the 
Commission.\2\ The registration requirement for municipal advisors 
established by the Dodd-Frank Act became effective on October 1, 
2010.\3\ On September 20, 2013, the Commission adopted the final rules 
for the permanent registration of municipal advisors (the ``Final 
Rules'').\4\ Municipal advisors were required to comply with the Final 
Rules as of July 1, 2014, and to register with the Commission under the 
Final Rules pursuant to a four-month phased-in compliance period, which 
began on July 1, 2014.\5\
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    \1\ See Dodd-Frank Wall Street Reform and Consumer Protection 
Act, Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ See 15 U.S.C. 78o-4(a).
    \3\ See supra note 1.
    \4\ See Securities Exchange Act Release No. 70462 (September 20, 
2013), 78 FR 67468 (November 12, 2013).
    \5\ See Securities Exchange Act Release No. 71288 (January 13, 
2014), 79 FR 2777 (January 16, 2014).
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    Exchange Act Section 15B(b)(2) provides that the MSRB shall propose 
and adopt rules to effect the purposes of the Exchange Act with respect 
to, among other things, advice provided to or on behalf of municipal 
entities or obligated persons by brokers, dealers, municipal securities 
dealers, and municipal advisors with respect to municipal financial 
products, the issuance of municipal securities, and solicitations of 
municipal entities or obligated persons undertaken by brokers, dealers, 
municipal securities dealers, and municipal advisors.\6\
---------------------------------------------------------------------------

    \6\ See 15 U.S.C. 78o-4(b)(2).
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    Specifically, Exchange Act Section 15B(b)(2)(A) requires, among 
other things, that the MSRB have rules that provide that no broker, 
dealer, municipal securities dealer, or municipal advisor shall provide 
advice to or on behalf of a municipal entity or obligated person with 
respect to municipal financial products or the issuance of municipal 
securities, unless, among other things, such municipal securities 
broker or municipal securities dealer and every natural person 
associated with such municipal securities broker or municipal 
securities dealer meets such standards of training, experience, 
competence, and such other qualifications as the MSRB finds necessary 
or appropriate in the public interest or for the protection of 
investors and municipal entities or obligated persons.\7\ Further, 
Section 15B(b)(2)(A) provides that, in connection with the definition 
and application of such standards, the MSRB may: (i) Appropriately 
classify municipal securities brokers, municipal securities dealers, 
and municipal advisors (taking into account certain relevant matters), 
and persons associated with municipal securities brokers, municipal 
securities dealers, and municipal advisors; (ii) specify that all or 
any portion of such standards shall be applicable to any such class; 
and (iii) require persons in any such class to pass tests administered 
in accordance with Exchange Act Section 15B(c)(7).\8\
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    \7\ See 15 U.S.C. 78o-4(b)(2)(A).
    \8\ See id. MSRB Rule G-2 sets forth standards of professional 
qualification and MSRB Rule G-3 sets forth professional 
qualification requirements for municipal advisors and their 
associated persons. See Securities Exchange Act Release No. 74384 
(February 26, 2015), 80 FR 11706 (March 4, 2015). MSRB Rule G-3 
includes two registration classifications for municipal advisors: 
municipal advisor representative and municipal advisor principal. 
See MSRB Rule G-3. Qualification as a municipal advisor 
representative is a prerequisite to qualification as a municipal 
advisor principal. See id. Under MSRB Rule G-3, a natural person 
associated with a municipal advisor who engages in municipal 
advisory activities on the municipal advisor's behalf (other than a 
person performing only clerical, administrative, support or similar 
functions) must take and pass the Municipal Advisor Representative 
Qualification Examination prior to being qualified as a municipal 
advisor representative. See MSRB Rule G-3(d). The MSRB developed a 
content outline and specifications for the selection of examination 
questions for the Municipal Advisor Representative Qualification 
Examination, which were filed with the Commission on April 22, 2015 
and became operative upon filing. See Securities Exchange Act 
Release No. 74858 (May 1, 2015), 80 FR 26310 (May 7, 2015). The MSRB 
will consider an examination for municipal advisor principals who 
are engaged in the management, direction or supervision of municipal 
advisory activities at a later date. See Securities Exchange Act 
Release No. 73708 (December 1, 2014), 79 FR 72225 (December 5, 
2014).
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    Exchange Act Section 15B(c)(7)(A) provides that the tests pursuant 
to Section 15B(b)(2)(A)(iii) shall be administered by, or on behalf of, 
the Commission or its designee, in the case of municipal advisors.\9\ 
The Commission designates FINRA to administer professional 
qualification tests for associated persons of registered municipal 
advisors who engage in municipal advisory activities or engage in the 
management, direction or supervision of municipal advisory activities, 
pursuant to the Commission's authority under Exchange Act Section 
15B(c)(7)(A)(iii).\10\
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    \9\ See 15 U.S.C. 78o-4(c)(7)(A)(iii).
    \10\ The Dodd-Frank Act also amended Exchange Act Section 15B to 
expressly provide that ``the Commission, or its designee, in the 
case of municipal advisors,'' conduct periodic examinations pursuant 
to Exchange Act Section 15B(b)(2)(E). See Exchange Act Section 
15B(c)(7)(A). In the Final Rules, the Commission designated FINRA as 
a designee to examine its members' activities as registered 
municipal advisors and evaluate compliance by such members with 
federal securities laws, Commission rules and regulations, and MSRB 
rules applicable to municipal advisors. See Securities Exchange Act 
Release No. 70462 (September 20, 2013), 78 FR 67468 (November 12, 
2013).
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    The Commission notes that FINRA has responsibility to enforce 
compliance by its members and persons associated with its members with 
the rules of the MSRB \11\ and currently administers all professional 
qualification tests developed, maintained, and owned by the MSRB, which 
are intended to ensure that municipal professionals demonstrate a basic 
competence in the subject matter related to the professional 
qualification classification in compliance with MSRB professional 
qualification requirement rules.\12\ FINRA currently has technical 
systems and procedures in place for scheduling examinations, collecting 
fees, administering examinations, and maintaining examination records 
and testing centers operated by vendors located throughout the 
country.\13\ In addition, FINRA has extensive experience in 
administering

[[Page 50885]]

professional qualification tests for its broker-dealer members (which 
include municipal securities brokers and dealers) and other securities 
professionals.\14\ These qualification tests cover a broad range of 
subjects on the markets, the securities industry and its regulatory 
structure, including knowledge of FINRA rules and the rules of other 
self-regulatory organizations, such as the MSRB.\15\
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    \11\ See 15 U.S.C. 78o-3(b)(2).
    \12\ See Securities Exchange Act Release No. 74561 (March 23, 
2015), 80 FR 16485 (March 27, 2015). These professional 
qualification tests are Series 51 (Municipal Fund Securities Limited 
Principal Qualification Examination); Series 52 (Municipal 
Securities Representative Qualification Examination); and Series 53 
(Municipal Securities Principal Qualification Examination). The 
Commission is responsible for oversight of FINRA and the MSRB to 
ensure they comply with their respective rules and applicable 
federal securities laws. See Exchange Act Section 19. FINRA and the 
MSRB are also subject to various requirements under the Exchange 
Act, including the requirements in Section 19(b) and Rule 19b-4 
thereunder to file proposed rule changes with the Commission 
(including proposed rule changes related to fees and professional 
qualification standards and requirements). No proposed rule change 
will take effect unless approved by the Commission or otherwise 
permitted in accordance with the provisions of Exchange Act Section 
19(b). See Exchange Act Section 19(b).
    \13\ See https://www.finra.org/industry/qualification-exams.
    \14\ See id. These professional qualification tests are Series 3 
(National Commodities Futures Exam); Series 4 (Registered Options 
Principal); Series 6 (Investment Company and Variable Contracts 
Products Representative); Series 7 (General Securities 
Representative Examination); Series 9 and 10 (General Securities 
Sales Supervisor); Series 11 (Assistant Representative--Order 
Processing Exam); Series 14 (Compliance Official Exam); Series 16 
(Supervisory Analysts Exam); Series 17 (United Kingdom Securities 
Representative); Series 22 (Direct Participation Representative); 
Series 23 (General Securities Principal Exam--Sales Supervisor 
Module); Series 24 (General Securities Principal); Series 26 
(Investment Company and Variable Contracts Products Principal); 
Series 27 (Financial and Operations Principal Exam); Series 28 
(Introducing Broker-Dealer Financial and Operations Principal Exam); 
Series 30 (NFA Branch Managers Exam); Series 31 (Futures Managed 
Funds Exam); Series 32 (Limited Futures Exam--Regulations); Series 
34 (Retail Off-Exchange Forex Exam); Series 37 (Canada Securities 
Representative Exam); Series 38 (Canada Securities Representative 
Exam); Series 39 (Direct Participation Programs Principal Exam); 
Series 42 (Registered Options Representative); Series 55 (Equity 
Trader Exam); Series 56 (Proprietary Trader Examination); Series 62 
(Corporate Securities Representative Exam); Series 63 (Uniform 
Securities State Law Examination); Series 65 (NASAA Investment 
Advisors Law Examination); Series 66 (NASAA Uniform Combined State 
Law Examination); Series 72 (Government Securities Representative 
Exam); Series 79 (Investment Banking Representative Exam); Series 82 
(Private Securities Offerings Representative Exam); Series 86 and 87 
(Research Analyst Exam); Series 91 (FDIC Safety and Soundness 
Technical Evaluation); Series 92 (FDIC Compliance Technical 
Evaluation); Series 93 (FDIC Division of Resolutions and 
Receiverships Technical Evaluation); and Series 99 (Operations 
Professional Exam).
    \15\ Id.
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    IT IS THEREFORE ORDERED, pursuant to Exchange Act Section 
15B(c)(7)(A), that FINRA is designated to administer professional 
qualification tests for associated persons of registered municipal 
advisors who engage in municipal advisory activities or engage in the 
management, direction or supervision of municipal advisory activities.

    By the Commission.

    Dated: August 17, 2015.
Brent J. Fields,
Secretary.
[FR Doc. 2015-20652 Filed 8-20-15; 8:45 am]
 BILLING CODE 8011-01-P



                                                                              Federal Register / Vol. 80, No. 162 / Friday, August 21, 2015 / Notices                                                50883

                                               (‘‘Nasdaq’’).11 The provision of new                     III. Date of Effectiveness of the                    should be included on the subject line
                                               options for investors to receive market                  Proposed Rule Change and Timing for                  if email is used. To help the
                                               data was a primary goal of the market                    Commission Action                                    Commission process and review your
                                               data amendments adopted by                                  The Exchange has designated this rule             comments more efficiently, please use
                                               Regulation NMS.12 EDGA Book Viewer                       filing as non-controversial under section            only one method. The Commission will
                                               is precisely the sort of market data                     19(b)(3)(A) of the Act 14 and paragraph              post all comments on the Commission’s
                                               product that the Commission                              (f)(6) of Rule 19b–4 thereunder.15 The               Internet Web site (http://www.sec.gov/
                                               envisioned when it adopted Regulation                    proposed rule change effects a change                rules/sro.shtml). Copies of the
                                               NMS.                                                     that: (A) Does not significantly affect the          submission, all subsequent
                                                                                                        protection of investors or the public                amendments, all written statements
                                               (B) Self-Regulatory Organization’s                       interest; (B) does not impose any                    with respect to the proposed rule
                                               Statement on Burden on Competition                       significant burden on competition; and               change that are filed with the
                                                                                                        (C) by its terms, does not become                    Commission, and all written
                                                  The Exchange does not believe that                                                                         communications relating to the
                                                                                                        operative for 30 days after the date of
                                               the proposed rule change will result in                                                                       proposed rule change between the
                                                                                                        the filing, or such shorter time as the
                                               any burden on competition that is not                    Commission may designate if consistent               Commission and any person, other than
                                               necessary or appropriate in furtherance                  with the protection of investors and the             those that may be withheld from the
                                               of the purposes of the Act. The proposal                 public interest; provided that the self-             public in accordance with the
                                               is not intended to address any                           regulatory organization has given the                provisions of 5 U.S.C. 552, will be
                                               competitive issues, but rather to                        Commission written notice of its intent              available for Web site viewing and
                                               memorialize in the Exchange’s rules a                    to file the proposed rule change, along              printing in the Commission’s Public
                                               data feed that is currently available                    with a brief description and text of the             Reference Room, 100 F Street NE.,
                                               through the Exchange’s public Web site                   proposed rule change, at least five                  Washington, DC 20549, on official
                                               free of charge. Nonetheless, the                         business days prior to the date of filing            business days between the hours of
                                               Exchange believes that the proposal will                 of the proposed rule change, or such                 10:00 a.m. and 3:00 p.m. Copies of such
                                               promote competition by the Exchange                      shorter time as designated by the                    filing will also be available for
                                                                                                        Commission.16                                        inspection and copying at the principal
                                               offering a service similar to that offered
                                                                                                           At any time within 60 days of the                 office of the Exchange. All comments
                                               by the NYSE and Nasdaq.13 Thus, the
                                                                                                        filing of the proposed rule change, the              received will be posted without change;
                                               Exchange believes this proposed rule                                                                          the Commission does not edit personal
                                               change is necessary to permit fair                       Commission summarily may
                                                                                                        temporarily suspend such rule change if              identifying information from
                                               competition among national securities                                                                         submissions. You should submit only
                                               exchanges. Therefore, the Exchange                       it appears to the Commission that such
                                                                                                        action is: (1) Necessary or appropriate in           information that you wish to make
                                               does not believe the proposed rule                                                                            available publicly. All submissions
                                                                                                        the public interest; (2) for the protection
                                               change will result in any burden on                                                                           should refer to File No. SR–EDGA–
                                                                                                        of investors; or (3) otherwise in
                                               competition that is not necessary or                                                                          2015–31 and should be submitted on or
                                                                                                        furtherance of the purposes of the Act.
                                               appropriate in furtherance of the                                                                             before September 11, 2015.
                                                                                                        If the Commission takes such action, the
                                               purposes of the Act.                                     Commission shall institute proceedings                 For the Commission, by the Division of
                                               (C) Self-Regulatory Organization’s                       to determine whether the proposed rule               Trading and Markets, pursuant to delegated
                                                                                                        should be approved or disapproved.                   authority.17
                                               Statement on Comments on the
                                                                                                                                                             Robert W. Errett,
                                               Proposed Rule Change Received From                       IV. Solicitation of Comments                         Deputy Secretary.
                                               Members, Participants or Others
                                                                                                          Interested persons are invited to                  [FR Doc. 2015–20654 Filed 8–20–15; 8:45 am]
                                                 The Exchange has neither solicited                     submit written data, views and                       BILLING CODE 8011–01–P
                                               nor received written comments on the                     arguments concerning the foregoing,
                                               proposed rule change.                                    including whether the proposal is
                                                                                                        consistent with the Act. Comments may                SECURITIES AND EXCHANGE
                                                                                                        be submitted by any of the following                 COMMISSION
                                                  11 See Nasdaq Rule 7023(a)(1)(C) (describing
                                                                                                        methods:
                                               Nasdaq TotalView is a depth-of-book data feed that                                                            [Release No. 34–75714]
                                               includes all orders and quotes from all Nasdaq           Electronic Comments
                                                                                                                                                             Designation of the Financial Industry
                                               members displayed in the Nasdaq Market Center as           • Use the Commission’s Internet                    Regulatory Authority To Administer
                                               well as the aggregate size of such orders and quotes
                                               at each price level in the execution functionality of
                                                                                                        comment form (http://www.sec.gov/                    Professional Qualification Tests for
                                               the Nasdaq Market Center). See also Nasdaq Book          rules/sro.shtml); or                                 Associated Persons of Registered
                                               Viewer, a description of which is available at             • Send an email to rule-comments@
                                                                                                                                                             Municipal Advisors
                                               https://data.nasdaq.com/Book Viewer.aspx (last           sec.gov. Please include File No. SR–
                                               visited July 29, 2015). See NYSE OpenBook                EDGA–2015–31 on the subject line.                    AGENCY: Securities and Exchange
                                               available at http://www.nyxdata.com/openbook                                                                  Commission.
                                               (last visited July 29, 2015) (providing real-time view   Paper Comments
                                                                                                                                                             ACTION: Order.
                                               of the NYSE limit order book). See e.g., Securities        • Send paper comments in triplicate
                                               Exchange Act Release No. 71775 (March 24, 2014),         to Secretary, Securities and Exchange                SUMMARY:    The Commission is
                                               79 FR 17627 (March 28, 2014) (SR–CBOE–2014–                                                                   designating the Financial Industry
                                                                                                        Commission, 100 F Street NE.,
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                                               021) (Notice of Filing and Immediate Effectiveness
                                                                                                        Washington, DC 20549–1090.                           Regulatory Authority (‘‘FINRA’’) to
                                               of Proposed Rule Change Related to the CBSX BBO
                                               Data Feed and the New CBSX Book Depth Data               All submissions should refer to File No.             administer professional qualification
                                               Feed).                                                   SR–EDGA–2015–31. This file number                    tests for associated persons of registered
                                                  12 See Securities Exchange Act Release No. 51808                                                           municipal advisors.
                                               (June 9, 2005), 70 FR 37496, at 37503 (June 29,           14 15U.S.C. 78s(b)(3)(A).                           DATES: Effective Date: August 17, 2015.
                                               2005) (Regulation NMS Adopting Release).                  15 17CFR 240.19b–4.
                                                  13 See supra note 11.                                  16 The Exchange has fulfilled this requirement.       17 17   CFR 200.30–3(a)(12).



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                                               50884                         Federal Register / Vol. 80, No. 162 / Friday, August 21, 2015 / Notices

                                               FOR FURTHER INFORMATION CONTACT:                        municipal securities dealer, or                         of municipal advisors.9 The
                                               Jessica Kane, Director; Rebecca Olsen,                  municipal advisor shall provide advice                  Commission designates FINRA to
                                               Deputy Director; Mary Simpkins, Senior                  to or on behalf of a municipal entity or                administer professional qualification
                                               Special Counsel; Edward Fierro,                         obligated person with respect to                        tests for associated persons of registered
                                               Attorney-Adviser; at (202) 551–5680,                    municipal financial products or the                     municipal advisors who engage in
                                               Office of Municipal Securities, U.S.                    issuance of municipal securities, unless,               municipal advisory activities or engage
                                               Securities and Exchange Commission,                     among other things, such municipal                      in the management, direction or
                                               100 F Street NE., Washington, DC                        securities broker or municipal securities               supervision of municipal advisory
                                               20549–7010.                                             dealer and every natural person                         activities, pursuant to the Commission’s
                                                                                                       associated with such municipal                          authority under Exchange Act Section
                                               Discussion                                              securities broker or municipal securities               15B(c)(7)(A)(iii).10
                                                  Section 975 of the Dodd-Frank Wall                   dealer meets such standards of training,                  The Commission notes that FINRA
                                               Street Reform and Consumer Protection                   experience, competence, and such other                  has responsibility to enforce compliance
                                               Act (‘‘Dodd-Frank Act’’) 1 amended                      qualifications as the MSRB finds                        by its members and persons associated
                                               Section 15B of the Securities Exchange                  necessary or appropriate in the public                  with its members with the rules of the
                                               Act of 1934 (‘‘Exchange Act’’) to, among                interest or for the protection of investors             MSRB 11 and currently administers all
                                               other things, make it unlawful for a                    and municipal entities or obligated                     professional qualification tests
                                               municipal advisor to provide certain                    persons.7 Further, Section 15B(b)(2)(A)                 developed, maintained, and owned by
                                               advice to or on behalf of a municipal                   provides that, in connection with the                   the MSRB, which are intended to ensure
                                               entity or obligated person with respect                 definition and application of such                      that municipal professionals
                                               to municipal financial products or the                  standards, the MSRB may: (i)                            demonstrate a basic competence in the
                                               issuance of municipal securities, or to                 Appropriately classify municipal                        subject matter related to the professional
                                               undertake a solicitation of a municipal                 securities brokers, municipal securities                qualification classification in
                                               entity or obligated person, unless the                  dealers, and municipal advisors (taking                 compliance with MSRB professional
                                               municipal advisor is registered with the                into account certain relevant matters),                 qualification requirement rules.12
                                               Commission.2 The registration                           and persons associated with municipal                   FINRA currently has technical systems
                                               requirement for municipal advisors                      securities brokers, municipal securities                and procedures in place for scheduling
                                               established by the Dodd-Frank Act                       dealers, and municipal advisors; (ii)                   examinations, collecting fees,
                                               became effective on October 1, 2010.3                   specify that all or any portion of such                 administering examinations, and
                                               On September 20, 2013, the                              standards shall be applicable to any                    maintaining examination records and
                                               Commission adopted the final rules for                  such class; and (iii) require persons in                testing centers operated by vendors
                                               the permanent registration of municipal                 any such class to pass tests                            located throughout the country.13 In
                                               advisors (the ‘‘Final Rules’’).4 Municipal              administered in accordance with                         addition, FINRA has extensive
                                               advisors were required to comply with                   Exchange Act Section 15B(c)(7).8                        experience in administering
                                               the Final Rules as of July 1, 2014, and                    Exchange Act Section 15B(c)(7)(A)
                                               to register with the Commission under                   provides that the tests pursuant to                       9 See 15 U.S.C. 78o–4(c)(7)(A)(iii).
                                               the Final Rules pursuant to a four-                     Section 15B(b)(2)(A)(iii) shall be                        10 The  Dodd-Frank Act also amended Exchange
                                                                                                                                                               Act Section 15B to expressly provide that ‘‘the
                                               month phased-in compliance period,                      administered by, or on behalf of, the                   Commission, or its designee, in the case of
                                               which began on July 1, 2014.5                           Commission or its designee, in the case                 municipal advisors,’’ conduct periodic
                                                  Exchange Act Section 15B(b)(2)                                                                               examinations pursuant to Exchange Act Section
                                                                                                         7 See  15 U.S.C. 78o–4(b)(2)(A).                      15B(b)(2)(E). See Exchange Act Section
                                               provides that the MSRB shall propose                      8 See                                                 15B(c)(7)(A). In the Final Rules, the Commission
                                                                                                                id. MSRB Rule G–2 sets forth standards of
                                               and adopt rules to effect the purposes of               professional qualification and MSRB Rule G–3 sets       designated FINRA as a designee to examine its
                                               the Exchange Act with respect to,                       forth professional qualification requirements for       members’ activities as registered municipal advisors
                                                                                                                                                               and evaluate compliance by such members with
                                               among other things, advice provided to                  municipal advisors and their associated persons.
                                                                                                                                                               federal securities laws, Commission rules and
                                               or on behalf of municipal entities or                   See Securities Exchange Act Release No. 74384
                                                                                                       (February 26, 2015), 80 FR 11706 (March 4, 2015).       regulations, and MSRB rules applicable to
                                               obligated persons by brokers, dealers,                  MSRB Rule G–3 includes two registration                 municipal advisors. See Securities Exchange Act
                                               municipal securities dealers, and                       classifications for municipal advisors: municipal       Release No. 70462 (September 20, 2013), 78 FR
                                                                                                                                                               67468 (November 12, 2013).
                                               municipal advisors with respect to                      advisor representative and municipal advisor
                                                                                                                                                                 11 See 15 U.S.C. 78o–3(b)(2).
                                                                                                       principal. See MSRB Rule G–3. Qualification as a
                                               municipal financial products, the                       municipal advisor representative is a prerequisite to     12 See Securities Exchange Act Release No. 74561
                                               issuance of municipal securities, and                   qualification as a municipal advisor principal. See     (March 23, 2015), 80 FR 16485 (March 27, 2015).
                                               solicitations of municipal entities or                  id. Under MSRB Rule G–3, a natural person               These professional qualification tests are Series 51
                                               obligated persons undertaken by                         associated with a municipal advisor who engages in      (Municipal Fund Securities Limited Principal
                                                                                                       municipal advisory activities on the municipal          Qualification Examination); Series 52 (Municipal
                                               brokers, dealers, municipal securities                  advisor’s behalf (other than a person performing        Securities Representative Qualification
                                               dealers, and municipal advisors.6                       only clerical, administrative, support or similar       Examination); and Series 53 (Municipal Securities
                                                  Specifically, Exchange Act Section                   functions) must take and pass the Municipal             Principal Qualification Examination). The
                                               15B(b)(2)(A) requires, among other                      Advisor Representative Qualification Examination        Commission is responsible for oversight of FINRA
                                                                                                       prior to being qualified as a municipal advisor         and the MSRB to ensure they comply with their
                                               things, that the MSRB have rules that                   representative. See MSRB Rule G–3(d). The MSRB          respective rules and applicable federal securities
                                               provide that no broker, dealer,                         developed a content outline and specifications for      laws. See Exchange Act Section 19. FINRA and the
                                                                                                       the selection of examination questions for the          MSRB are also subject to various requirements
                                                  1 See Dodd-Frank Wall Street Reform and              Municipal Advisor Representative Qualification          under the Exchange Act, including the
                                               Consumer Protection Act, Public Law 111–203, 124        Examination, which were filed with the                  requirements in Section 19(b) and Rule 19b–4
                                               Stat. 1376 (2010).                                      Commission on April 22, 2015 and became                 thereunder to file proposed rule changes with the
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                                                  2 See 15 U.S.C. 78o–4(a).                            operative upon filing. See Securities Exchange Act      Commission (including proposed rule changes
                                                  3 See supra note 1.
                                                                                                       Release No. 74858 (May 1, 2015), 80 FR 26310 (May       related to fees and professional qualification
                                                                                                       7, 2015). The MSRB will consider an examination         standards and requirements). No proposed rule
                                                  4 See Securities Exchange Act Release No. 70462
                                                                                                       for municipal advisor principals who are engaged        change will take effect unless approved by the
                                               (September 20, 2013), 78 FR 67468 (November 12,         in the management, direction or supervision of          Commission or otherwise permitted in accordance
                                               2013).                                                  municipal advisory activities at a later date. See      with the provisions of Exchange Act Section 19(b).
                                                  5 See Securities Exchange Act Release No. 71288                                                              See Exchange Act Section 19(b).
                                                                                                       Securities Exchange Act Release No. 73708
                                               (January 13, 2014), 79 FR 2777 (January 16, 2014).      (December 1, 2014), 79 FR 72225 (December 5,              13 See https://www.finra.org/industry/
                                                  6 See 15 U.S.C. 78o–4(b)(2).                         2014).                                                  qualification-exams.



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                                                                             Federal Register / Vol. 80, No. 162 / Friday, August 21, 2015 / Notices                                                 50885

                                               professional qualification tests for its                SECURITIES AND EXCHANGE                                    agree, provided, however, that such
                                               broker-dealer members (which include                    COMMISSION                                                 agreement to nullify or adjust must be
                                               municipal securities brokers and                                                                                   conveyed to the Exchange in a manner
                                                                                                       [Release No. 34–75716; File No. SR–BX–
                                               dealers) and other securities                           2015–052)
                                                                                                                                                                  prescribed by the Exchange prior to 8:30
                                               professionals.14 These qualification tests                                                                         a.m. Eastern Time on the first trading
                                               cover a broad range of subjects on the                  Self-Regulatory Organizations;                             day following the execution. It is
                                               markets, the securities industry and its                NASDAQ OMX BX, Inc.; Notice of Filing                      considered conduct inconsistent with
                                               regulatory structure, including                         and Immediate Effectiveness of a                           just and equitable principles of trade for
                                               knowledge of FINRA rules and the rules                  Proposed Rule Change Relating to                           any Participant to use the mutual
                                               of other self-regulatory organizations,                 Verifiable Disruption or Malfunction of                    adjustment process to circumvent any
                                               such as the MSRB.15                                     Exchange Systems                                           applicable Exchange rule, the Act or any
                                                                                                                                                                  of the rules and regulations thereunder.
                                                 IT IS THEREFORE ORDERED,                              August 17, 2015.                                              (a)–(j) No Change.
                                               pursuant to Exchange Act Section                           Pursuant to Section 19(b)(1) of the                        (k) Verifiable Disruption or
                                               15B(c)(7)(A), that FINRA is designated                  Securities Exchange Act of 1934                            Malfunction of Exchange Systems.
                                               to administer professional qualification                (‘‘Act’’),1 and Rule 19b–4 2 thereunder,                   Parties to a trade may have a trade
                                               tests for associated persons of registered              notice is hereby given that on August                      nullified or its price adjusted if it
                                               municipal advisors who engage in                        13, 2015, NASDAQ OMX BX, Inc.                              resulted from a verifiable disruption or
                                               municipal advisory activities or engage                 (‘‘Exchange’’ or ‘‘BX’’) filed with the                    malfunction of Exchange execution,
                                               in the management, direction or                         Securities and Exchange Commission                         dissemination, or communication
                                               supervision of municipal advisory                       (‘‘SEC’’ or ‘‘Commission’’) the proposed                   systems that caused a quote/order to
                                               activities.                                             rule change as described in Items I, II,                   trade in excess of its disseminated size
                                                                                                       and III, below, which Items have been                      (e.g. a quote/order that is frozen,
                                                 By the Commission.                                    prepared by the Exchange. The                              because of an Exchange system error,
                                                 Dated: August 17, 2015.                               Commission is publishing this notice to                    and repeatedly traded). Parties to a
                                               Brent J. Fields,                                        solicit comments on the proposed rule                      trade may have a trade nullified or its
                                               Secretary.                                              change from interested persons.                            price adjusted if it resulted from a
                                               [FR Doc. 2015–20652 Filed 8–20–15; 8:45 am]             I. Self-Regulatory Organization’s                          verifiable disruption or malfunction of
                                               BILLING CODE 8011–01–P                                  Statement of the Terms of Substance of                     an Exchange dissemination or
                                                                                                       the Proposed Rule Change                                   communication system that prevented a
                                                  14 See id. These professional qualification tests
                                                                                                                                                                  member from updating or canceling a
                                                                                                          BX is filing with the Commission a                      quote/order for which the member is
                                               are Series 3 (National Commodities Futures Exam);
                                                                                                       proposal to amend Chapter V, Section 6                     responsible where there is Exchange
                                               Series 4 (Registered Options Principal); Series 6
                                               (Investment Company and Variable Contracts
                                                                                                       (Nullification and Adjustment of                           documentation providing that the
                                               Products Representative); Series 7 (General             Options Transactions including Obvious                     member sought to update or cancel the
                                               Securities Representative Examination); Series 9        Errors) of the rules of the BX Options                     quote/order.
                                               and 10 (General Securities Sales Supervisor); Series    Market (‘‘BX Options’’) related to a                          ([k]l) Appeals. A party to a transaction
                                               11 (Assistant Representative—Order Processing           verifiable disruption or malfunction of
                                               Exam); Series 14 (Compliance Official Exam); Series                                                                affected by a decision made under this
                                                                                                       Exchange systems.                                          section may appeal that decision to the
                                               16 (Supervisory Analysts Exam); Series 17 (United
                                                                                                          The text of the amended Exchange                        Exchange Review Council. An appeal
                                               Kingdom Securities Representative); Series 22
                                               (Direct Participation Representative); Series 23        rule is set forth immediately below.                       must be made in writing, and must be
                                               (General Securities Principal Exam—Sales                   Proposed new language is italicized
                                                                                                                                                                  received by BX within thirty (30)
                                               Supervisor Module); Series 24 (General Securities       and proposed deleted language is
                                                                                                                                                                  minutes after the person making the
                                               Principal); Series 26 (Investment Company and           [bracketed].
                                               Variable Contracts Products Principal); Series 27                                                                  appeal is given the notification of the
                                               (Financial and Operations Principal Exam); Series       NASDAQ OMX BX Rules                                        determination being appealed. The
                                               28 (Introducing Broker-Dealer Financial and             Options Rules                                              Exchange Review Council may review
                                               Operations Principal Exam); Series 30 (NFA Branch                                                                  any decision appealed, including
                                               Managers Exam); Series 31 (Futures Managed Funds        *          *       *      *       *                        whether a complaint was timely,
                                               Exam); Series 32 (Limited Futures Exam—
                                                                                                       Chapter V Regulation of Trading on                         whether an Obvious Error or
                                               Regulations); Series 34 (Retail Off-Exchange Forex
                                               Exam); Series 37 (Canada Securities Representative      BX Options                                                 Catastrophic Error occurred, whether
                                               Exam); Series 38 (Canada Securities Representative                                                                 the correct Theoretical Price was used,
                                               Exam); Series 39 (Direct Participation Programs
                                                                                                       *          *       *      *       *                        and whether an adjustment was made at
                                               Principal Exam); Series 42 (Registered Options          Sec. 6 Nullification and Adjustment of                     the correct price.
                                               Representative); Series 55 (Equity Trader Exam);
                                                                                                       Options Transactions Including                             *      *     *     *    *
                                               Series 56 (Proprietary Trader Examination); Series
                                               62 (Corporate Securities Representative Exam);          Obvious Errors                                                The text of the proposed rule change
                                               Series 63 (Uniform Securities State Law                    The Exchange may nullify a                              is also available on the Exchange’s Web
                                               Examination); Series 65 (NASAA Investment               transaction or adjust the execution price                  site at http://
                                               Advisors Law Examination); Series 66 (NASAA
                                               Uniform Combined State Law Examination); Series
                                                                                                       of a transaction in accordance with this                   nasdaqomxbx.cchwallstreet.com, at the
                                               72 (Government Securities Representative Exam);         Rule. However, the determination as to                     principal office of the Exchange, and at
                                               Series 79 (Investment Banking Representative            whether a trade was executed at an                         the Commission’s Public Reference
                                               Exam); Series 82 (Private Securities Offerings          erroneous price may be made by mutual                      Room.
rmajette on DSK7SPTVN1PROD with NOTICES




                                               Representative Exam); Series 86 and 87 (Research        agreement of the affected parties to a
                                               Analyst Exam); Series 91 (FDIC Safety and                                                                          II. Self-Regulatory Organization’s
                                                                                                       particular transaction. A trade may be
                                               Soundness Technical Evaluation); Series 92 (FDIC                                                                   Statement of the Purpose of, and
                                                                                                       nullified or adjusted on the terms that
                                               Compliance Technical Evaluation); Series 93 (FDIC                                                                  Statutory Basis for, the Proposed Rule
                                               Division of Resolutions and Receiverships               all parties to a particular transaction
                                                                                                                                                                  Change
                                               Technical Evaluation); and Series 99 (Operations
                                               Professional Exam).                                         1 15   U.S.C. 78s(b)(1).                                 In its filing with the Commission, the
                                                  15 Id.                                                   2 17   CFR 240.19b–4.                                  Exchange included statements


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Document Created: 2018-02-23 11:01:11
Document Modified: 2018-02-23 11:01:11
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionOrder.
DatesEffective Date: August 17, 2015.
ContactJessica Kane, Director; Rebecca Olsen, Deputy Director; Mary Simpkins, Senior Special Counsel; Edward Fierro, Attorney-Adviser; at (202) 551-5680, Office of Municipal Securities, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-7010.
FR Citation80 FR 50883 

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