83 FR 8529 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Revise the Direct Participation Programs Representative (Series 22) Examination
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 39 (February 27, 2018)
Federal Register Volume 83, Issue 39 (February 27, 2018)
| Page Range | 8529-8532 | |
| FR Document | 2018-03887 |
[Federal Register Volume 83, Number 39 (Tuesday, February 27, 2018)] [Notices] [Pages 8529-8532] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-03887] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82748; File No. SR-FINRA-2018-009] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Revise the Direct Participation Programs Representative (Series 22) Examination February 21, 2018. 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 February 12, 2018, Financial Industry Regulatory Authority, Inc. (``FINRA'') 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 FINRA. FINRA has designated the proposed rule change as ``constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule'' under Section 19(b)(3)(A)(i) of the Act \3\ and Rule 19b-4(f)(1) thereunder,\4\ which renders the proposal effective upon receipt of this filing by the Commission. 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. \3\ 15 U.S.C. 78s(b)(3)(A)(i). \4\ 17 CFR 240.19b-4(f)(1). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing revisions to the content outline and selection specifications for the Direct Participation Programs Representative (Series 22) examination as part of the restructuring of the representative-level examination program.\5\ The proposed revisions also update the material to reflect changes to the laws, rules and regulations covered by the examination and to incorporate the functions and associated tasks currently performed by a Direct Participation Programs [[Page 8530]] Representative. In addition, FINRA is proposing to make changes to the format of the content outline. FINRA is not proposing any textual changes to the By-Laws, Schedules to the By-Laws or Rules of FINRA. --------------------------------------------------------------------------- \5\ FINRA also is proposing corresponding revisions to the Series 22 question bank. Based on instruction from SEC staff, FINRA is submitting this filing for immediate effectiveness pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(1) thereunder, and is not filing the question bank. See Letter to Alden S. Adkins, Senior Vice President and General Counsel, NASD Regulation, from Belinda Blaine, Associate Director, Division of Market Regulation, SEC, dated July 24, 2000. The question bank is available for SEC review. --------------------------------------------------------------------------- The revised Series 22 content outline is attached.\6\ The revised Series 22 selection specifications have been submitted to the Commission under separate cover with a request for confidential treatment pursuant to SEA Rule 24b-2.\7\ --------------------------------------------------------------------------- \6\ The Commission notes that the content outline is attached to the filing, not to this Notice. \7\ 17 CFR 240.24b-2. --------------------------------------------------------------------------- The text of the proposed rule change is available on FINRA's website at http://www.finra.org, at the principal office of FINRA and at the Commission's Public Reference Room. [sic] II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA 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. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose Section 15A(g)(3) of the Act \8\ authorizes FINRA to prescribe standards of training, experience, and competence for persons associated with FINRA members. In accordance with that provision, FINRA has developed examinations that are designed to establish that persons associated with FINRA members have attained specified levels of competence and knowledge, consistent with applicable registration requirements under FINRA rules. FINRA periodically reviews the content of the examinations to determine whether revisions are necessary or appropriate in view of changes pertaining to the subject matter covered by the examinations. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78o-3(g)(3). --------------------------------------------------------------------------- The SEC recently approved a proposed rule change to restructure the FINRA representative-level qualification examination program.\9\ The rule change, which will become effective on October 1, 2018,\10\ restructures the examination program into a new format whereby all new representative-level applicants will be required to take a general knowledge examination (the Securities Industry Essentials or SIE TM) and a tailored, specialized knowledge examination (a revised representative-level qualification examination) for their particular registered role. --------------------------------------------------------------------------- \9\ See Securities Exchange Act Release No. 81098 (July 7, 2017), 82 FR 32419 (July 13, 2017) (Order Approving File No. SR- FINRA-2017-007). \10\ See Regulatory Notice 17-30 (SEC Approves Consolidated FINRA Registration Rules, Restructured Representative-Level Qualification Examinations and Changes to Continuing Education Requirements) (October 2017). --------------------------------------------------------------------------- The restructured program eliminates duplicative testing of general securities knowledge on the current representative-level qualification examinations by moving such content into the SIE examination.\11\ The SIE examination will test fundamental securities-related knowledge, including knowledge of basic products, the structure and function of the securities industry, the regulatory agencies and their functions and regulated and prohibited practices, whereas the revised representative-level qualification examinations will test knowledge relevant to day-to-day activities, responsibilities and job functions of representatives.\12\ --------------------------------------------------------------------------- \11\ Each of the current representative-level examinations covers general securities knowledge, with the exception of the Research Analyst (Series 86 and 87) examinations. \12\ FINRA filed the SIE content outline with the SEC for immediate effectiveness. See Securities Exchange Act Release No. 82578 (January 24, 2018), 83 FR 4375 (January 30, 2018) (Notice of Filing and Immediate Effectiveness of File No. SR-FINRA-2018-002). In addition to the proposed rule change relating to the revised Series 22 examination, FINRA is filing with the Commission for immediate effectiveness the content outlines for the other revised representative-level qualification examinations. --------------------------------------------------------------------------- As part of the restructuring process and in consultation with a committee of industry representatives, FINRA undertook a review of the Direct Participation Programs Representative (Series 22) examination to remove the general securities knowledge currently covered on the examination and to create a tailored examination to test knowledge relevant to the day-to-day activities, responsibilities and job functions of a Direct Participation Programs Representative. As a result of this review, FINRA also is proposing to revise the Series 22 content outline to reflect changes to the laws, rules and regulations covered by the examination and to incorporate the functions and associated tasks currently performed by a Direct Participation Programs Representative. The proposed change will align the organization of the Series 22 content outline with the organization of the content outlines of the other revised representative-level examinations.\13\ In addition, FINRA is proposing to make other changes to the format of the Series 22 content outline. --------------------------------------------------------------------------- \13\ FINRA currently has organized several FINRA qualification examinations, such as the Securities Trader (Series 57) examination, based on the functions that are performed by the respective registered persons and the associated tasks. FINRA is proposing similar layouts for all of the representative-level examinations, including the Series 22 examination. --------------------------------------------------------------------------- Beginning on October 1, 2018, new applicants seeking to register as Direct Participation Programs Representatives must pass the SIE examination and the revised Direct Participation Programs Representative (Series 22) examination. Current Content Outline The current Series 22 content outline is divided into six sections. The following are the six sections, denoted Section 1 through Section 6, with the associated number of questions: 1. Investment Entities for Direct Participation Programs, 12 questions; 2. Types of Direct Participation Programs, 11 questions; 3. Offering Practices Applicable to Direct Participation Programs, 14 questions; 4. Tax Issues Applicable to Direct Participation Programs, 20 questions; 5. Regulation of Direct Participation Programs, 32 questions; and 6. Factors to Consider in Evaluating Direct Participation Programs, 11 questions. In addition, each section includes references to the applicable laws, rules and regulations associated with that section. The current content outline also includes a preface (addressing, among other things, the purpose, administration and scoring of the examination), sample questions and reference materials. Revised Content Outline As noted above, FINRA is proposing to move the general securities knowledge currently covered on the Series 22 examination to the SIE examination. For example, FINRA Rule 3220 (Influencing or Rewarding Employees of Others) (the Gifts Rule) will now be tested on the SIE examination, rather than on the Series 22 examination. As a result, the revised Series 22 examination will test knowledge specific to the day- to-day activities, responsibilities and job functions of a Direct Participation Programs Representative. [[Page 8531]] Further, FINRA is proposing to reorganize the content outline by dividing it into four major job functions that are performed by a Direct Participation Programs Representative. The proposed change aligns the major job functions performed by a Direct Participation Programs Representative with the major job functions performed by other sales representatives, including Investment Company and Variable Contracts Products Representatives, General Securities Representatives and Private Securities Offerings Representatives. The following are the four major job functions, denoted Function 1 through Function 4, with the associated number of questions: Function 1: Seeks Business for the Broker-Dealer from Customers and Potential Customers, 17 questions; Function 2: Opens Accounts After Obtaining and Evaluating Customers' Financial Profile and Investment Objectives, 4 questions; Function 3: Provides Customers with Information About Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records, 27 questions; and Function 4: Obtains and Verifies Customers' Purchase Instructions and Agreements; Processes, Completes and Confirms Transactions, 2 questions. FINRA also is proposing to adjust the number of questions assigned to each major job function to ensure that the overall examination better reflects the key tasks performed by a Direct Participation Programs Representative. The questions on the revised Series 22 examination will place emphasis on tasks such as seeking business for the broker-dealer from customers and potential customers, opening customer accounts, providing customers with suitable recommendations and verifying customer agreements and transactions. Each function also includes specific tasks describing activities associated with performing that function. There are two tasks (1.1-- 1.2) associated with Function 1;\14\ four tasks (2.1--2.4) associated with Function 2; \15\ four tasks (3.1--3.4) associated with Function 3; \16\ and three tasks (4.1--4.3) associated with Function 4.\17\ For example, one such task (Task 1.1) is contacting current and potential customers in person and by telephone, mail and electronic means, developing promotional and advertising materials and seeking appropriate approvals to distribute marketing materials.\18\ The content outline also lists the knowledge required to perform each function and associated tasks (e.g., standards and required approvals of communications). In addition, where applicable, the content outline lists the laws, rules and regulations a candidate is expected to know to perform each function and associated tasks (e.g., FINRA Rule 2111 (Suitability)). --------------------------------------------------------------------------- \14\ See Exhibit 3a, Outline Pages 3-4. The outline is attached as Exhibit 3a to the 19b-4 form. \15\ See Exhibit 3a, Outline Pages 5-6. \16\ See Exhibit 3a, Outline Pages 7-10. \17\ See Exhibit 3a, Outline Pages 11-12. \18\ See Exhibit 3a, Outline Page 3. --------------------------------------------------------------------------- FINRA also is proposing to revise the content outline to reflect changes to the laws, rules and regulations covered by the examination. Among other revisions, FINRA is proposing to revise the content outline to reflect the adoption of new FINRA rules (e.g., FINRA Rule 2273 (Educational Communication Related to Recruitment Practices and Account Transfers)). FINRA is proposing similar changes to the Series 22 selection specifications and question bank. Finally, FINRA is proposing to make other changes to the format of the content outline, including to the preface, sample questions and reference materials.\19\ Among other changes, FINRA is proposing to: (1) Reduce the preface to one page of introductory information; (2) streamline details regarding the purpose of the examination; (3) move the application procedures to FINRA's website; and (4) explain that the passing score is established using a standard setting procedure, and that a statistical adjustment process known as equating is used in scoring the examination.\20\ --------------------------------------------------------------------------- \19\ FINRA is proposing similar changes to the content outlines for other representative-level examinations. \20\ See Exhibit 3a, Outline Page 2. --------------------------------------------------------------------------- As a result of the proposed changes, the number of scored questions on the Series 22 examination will be reduced from 100 questions to 50 questions.\21\ Further, the test time, which is the amount of time candidates will have to complete the examination, will be reduced from two hours and 30 minutes to one hour and 30 minutes. Currently, a score of 70 percent is required to pass the examination. FINRA will publish the passing score of the revised Series 22 examination on its website, at www.finra.org, prior to its first administration. --------------------------------------------------------------------------- \21\ Consistent with FINRA's practice of including ``pretest'' questions on examinations, the Series 22 examination includes five additional, unidentified pretest questions that do not contribute towards the candidate's score. The pretest questions are designed to ensure that new examination questions meet acceptable testing standards prior to use for scoring purposes. Therefore, the Series 22 examination actually consists of 55 questions, 50 of which are scored. The five pretest questions are randomly distributed throughout the examination. --------------------------------------------------------------------------- Availability of Content Outline The current Series 22 content outline is available on FINRA's website. The revised Series 22 content outline will replace the current content outline on FINRA's website, and it will be made available on the website on the date of this filing. FINRA is filing the proposed rule change for immediate effectiveness. The implementation date will be October 1, 2018, to coincide with the implementation of the restructured representative- level examination program. FINRA will also announce the implementation date of the proposed rule change in a Regulatory Notice. 2. Statutory Basis FINRA believes that the proposed revisions to the Series 22 examination program are consistent with the provisions of Section 15A(b)(6) of the Act,\22\ which requires, among other things, that FINRA 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 15A(g)(3) of the Act,\23\ which authorizes FINRA to prescribe standards of training, experience, and competence for persons associated with FINRA members. The proposed rule change will improve the examination program, without compromising the qualification standards, by removing the general knowledge content currently covered on the Series 22 examination, since that content will be covered in the co-requisite SIE examination. In addition, the proposed revisions will further the purposes of the Act by updating the examination program to reflect changes to the laws, rules and regulations covered by the examination and to incorporate the functions and associated tasks currently performed by a Direct Participation Programs Representative. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78o-3(b)(6). \23\ 15 U.S.C. 78o-3(g)(3). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The updated examination aligns with the functions and associated tasks currently performed by a Direct Participation Programs Representative and tests knowledge of the most current laws, [[Page 8532]] rules, regulations and skills relevant to those functions and associated tasks. As such, the proposed revisions would make the examination more effective. FINRA also provided a detailed economic impact assessment regarding the introduction of the SIE examination and the restructuring of the representative-level examinations as part of the proposed rule change to restructure the FINRA representative-level qualification examination program.\24\ --------------------------------------------------------------------------- \24\ See Securities Exchange Act Release No. 80371 (April 4, 2017), 82 FR 17336 (April 10, 2017) (Notice of Filing of File No. SR-FINRA-2017-007). --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \25\ and paragraph (f)(1) of Rule 19b-4 thereunder.\26\ 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 should be approved or disapproved. --------------------------------------------------------------------------- \25\ 15 U.S.C. 78s(b)(3)(A). \26\ 17 CFR 240.19b-4(f)(1). --------------------------------------------------------------------------- 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 CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File Number SR- FINRA-2018-009 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-FINRA-2018-009. 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 FINRA. 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-FINRA-2018-009, and should be submitted on or before March 20, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\27\ --------------------------------------------------------------------------- \27\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-03887 Filed 2-26-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 39 / Tuesday, February 27, 2018 / Notices 8529
incorporate the functions and associated Electronic Comments SECURITIES AND EXCHANGE
tasks currently performed by an COMMISSION
Investment Banking Representative. • Use the Commission’s internet
comment form (http://www.sec.gov/ [Release No. 34–82748; File No. SR–FINRA–
B. Self-Regulatory Organization’s rules/sro.shtml); or 2018–009]
Statement on Burden on Competition
• Send an email to rule-comments@ Self-Regulatory Organizations;
FINRA does not believe that the sec.gov. Please include File Number SR– Financial Industry Regulatory
proposed rule change will result in any FINRA–2018–004 on the subject line. Authority, Inc.; Notice of Filing and
burden on competition that is not
Immediate Effectiveness of a Proposed
necessary or appropriate in furtherance Paper Comments Rule Change To Revise the Direct
of the purposes of the Act. The updated
• Send paper comments in triplicate Participation Programs Representative
examination aligns with the functions
to Secretary, Securities and Exchange (Series 22) Examination
and associated tasks currently
performed by an Investment Banking Commission, 100 F Street NE, February 21, 2018.
Representative and tests knowledge of Washington, DC 20549–1090. Pursuant to Section 19(b)(1) of the
the most current laws, rules, regulations Securities Exchange Act of 1934
All submissions should refer to File
and skills relevant to those functions (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
Number SR–FINRA–2018–004. This file
and associated tasks. As such, the notice is hereby given that on February
proposed revisions would make the number should be included on the
subject line if email is used. To help the 12, 2018, Financial Industry Regulatory
examination more effective. FINRA also Authority, Inc. (‘‘FINRA’’) filed with the
provided a detailed economic impact Commission process and review your
Securities and Exchange Commission
assessment regarding the introduction of comments more efficiently, please use
(‘‘SEC’’ or ‘‘Commission’’) the proposed
the SIE examination and the only one method. The Commission will rule change as described in Items I, II,
restructuring of the representative-level post all comments on the Commission’s and III below, which Items have been
examinations as part of the proposed internet website (http://www.sec.gov/ prepared by FINRA. FINRA has
rule change to restructure the FINRA rules/sro.shtml). Copies of the designated the proposed rule change as
representative-level qualification submission, all subsequent ‘‘constituting a stated policy, practice,
examination program.23 amendments, all written statements or interpretation with respect to the
C. Self-Regulatory Organization’s with respect to the proposed rule meaning, administration, or
Statement on Comments on the change that are filed with the enforcement of an existing rule’’ under
Proposed Rule Change Received From Commission, and all written Section 19(b)(3)(A)(i) of the Act 3 and
Members, Participants, or Others communications relating to the Rule 19b–4(f)(1) thereunder,4 which
proposed rule change between the renders the proposal effective upon
Written comments were neither
Commission and any person, other than receipt of this filing by the Commission.
solicited nor received.
those that may be withheld from the The Commission is publishing this
III. Date of Effectiveness of the public in accordance with the notice to solicit comments on the
Proposed Rule Change and Timing for provisions of 5 U.S.C. 552, will be proposed rule change from interested
Commission Action available for website viewing and persons.
The foregoing rule change has become printing in the Commission’s Public I. Self-Regulatory Organization’s
effective pursuant to Section 19(b)(3)(A) Reference Room, 100 F Street NE, Statement of the Terms of Substance of
of the Act 24 and paragraph (f)(1) of Rule Washington, DC 20549, on official the Proposed Rule Change
19b–4 thereunder.25 At any time within business days between the hours of
60 days of the filing of the proposed rule FINRA is proposing revisions to the
10:00 a.m. and 3:00 p.m. Copies of the
change, the Commission summarily may content outline and selection
filing also will be available for specifications for the Direct
temporarily suspend such rule change if inspection and copying at the principal
it appears to the Commission that such Participation Programs Representative
office of FINRA. All comments received (Series 22) examination as part of the
action is necessary or appropriate in the will be posted without change. Persons
public interest, for the protection of restructuring of the representative-level
submitting comments are cautioned that examination program.5 The proposed
investors, or otherwise in furtherance of we do not redact or edit personal
the purposes of the Act. If the revisions also update the material to
identifying information from comment reflect changes to the laws, rules and
Commission takes such action, the
submissions. You should submit only regulations covered by the examination
Commission shall institute proceedings
information that you wish to make and to incorporate the functions and
to determine whether the proposed rule
available publicly. All submissions associated tasks currently performed by
should be approved or disapproved.
should refer to File Number SR–FINRA– a Direct Participation Programs
IV. Solicitation of Comments 2018–004 and should be submitted on
Interested persons are invited to or before March 20, 2018. 1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
submit written data, views and For the Commission, by the Division of 3 15 U.S.C. 78s(b)(3)(A)(i).
arguments concerning the foregoing, Trading and Markets, pursuant to delegated 4 17 CFR 240.19b–4(f)(1).
including whether the proposed rule authority.26 5 FINRA also is proposing corresponding
change is consistent with the Act. Eduardo A. Aleman, revisions to the Series 22 question bank. Based on
daltland on DSKBBV9HB2PROD with NOTICES
Comments may be submitted by any of instruction from SEC staff, FINRA is submitting this
Assistant Secretary. filing for immediate effectiveness pursuant to
the following methods:
[FR Doc. 2018–03889 Filed 2–26–18; 8:45 am] Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(1)
thereunder, and is not filing the question bank. See
23 See Securities Exchange Act Release No. 80371 BILLING CODE 8011–01–P
Letter to Alden S. Adkins, Senior Vice President
(April 4, 2017), 82 FR 17336 (April 10, 2017) and General Counsel, NASD Regulation, from
(Notice of Filing of File No. SR–FINRA–2017–007). Belinda Blaine, Associate Director, Division of
24 15 U.S.C. 78s(b)(3)(A).
Market Regulation, SEC, dated July 24, 2000. The
25 17 CFR 240.19b–4(f)(1). 26 17 CFR 200.30–3(a)(12). question bank is available for SEC review.
VerDate Sep<11>2014 19:49 Feb 26, 2018 Jkt 244001 PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 E:\FR\FM\27FEN1.SGM 27FEN1](https://thefederalregister.org/doc/83_FR_8568/page/1.svg)
![8530 Federal Register / Vol. 83, No. 39 / Tuesday, February 27, 2018 / Notices
Representative. In addition, FINRA is examination program.9 The rule change, a Direct Participation Programs
proposing to make changes to the format which will become effective on October Representative. The proposed change
of the content outline. FINRA is not 1, 2018,10 restructures the examination will align the organization of the Series
proposing any textual changes to the By- program into a new format whereby all 22 content outline with the organization
Laws, Schedules to the By-Laws or new representative-level applicants will of the content outlines of the other
Rules of FINRA. be required to take a general knowledge revised representative-level
The revised Series 22 content outline examination (the Securities Industry examinations.13 In addition, FINRA is
is attached.6 The revised Series 22 Essentials or SIE TM) and a tailored, proposing to make other changes to the
selection specifications have been specialized knowledge examination (a format of the Series 22 content outline.
submitted to the Commission under revised representative-level Beginning on October 1, 2018, new
separate cover with a request for qualification examination) for their applicants seeking to register as Direct
confidential treatment pursuant to SEA particular registered role. Participation Programs Representatives
Rule 24b–2.7 The restructured program eliminates must pass the SIE examination and the
duplicative testing of general securities revised Direct Participation Programs
The text of the proposed rule change knowledge on the current Representative (Series 22) examination.
is available on FINRA’s website at representative-level qualification
http://www.finra.org, at the principal Current Content Outline
examinations by moving such content
office of FINRA and at the into the SIE examination.11 The SIE The current Series 22 content outline
Commission’s Public Reference Room. examination will test fundamental is divided into six sections. The
[sic] securities-related knowledge, including following are the six sections, denoted
II. Self-Regulatory Organization’s knowledge of basic products, the Section 1 through Section 6, with the
Statement of the Purpose of, and structure and function of the securities associated number of questions:
industry, the regulatory agencies and 1. Investment Entities for Direct
Statutory Basis for, the Proposed Rule
their functions and regulated and Participation Programs, 12 questions;
Change 2. Types of Direct Participation
prohibited practices, whereas the
In its filing with the Commission, revised representative-level Programs, 11 questions;
FINRA included statements concerning qualification examinations will test 3. Offering Practices Applicable to
the purpose of and basis for the knowledge relevant to day-to-day Direct Participation Programs, 14
proposed rule change and discussed any activities, responsibilities and job questions;
comments it received on the proposed 4. Tax Issues Applicable to Direct
functions of representatives.12
rule change. The text of these statements As part of the restructuring process Participation Programs, 20 questions;
5. Regulation of Direct Participation
may be examined at the places specified and in consultation with a committee of
Programs, 32 questions; and
in Item IV below. FINRA has prepared industry representatives, FINRA
6. Factors to Consider in Evaluating
summaries, set forth in sections A, B, undertook a review of the Direct
Direct Participation Programs, 11
and C below, of the most significant Participation Programs Representative
questions.
aspects of such statements. (Series 22) examination to remove the In addition, each section includes
general securities knowledge currently references to the applicable laws, rules
A. Self-Regulatory Organization’s covered on the examination and to
Statement of the Purpose of, and the and regulations associated with that
create a tailored examination to test section. The current content outline also
Statutory Basis for, the Proposed Rule knowledge relevant to the day-to-day
Change includes a preface (addressing, among
activities, responsibilities and job other things, the purpose,
1. Purpose functions of a Direct Participation administration and scoring of the
Programs Representative. As a result of examination), sample questions and
Section 15A(g)(3) of the Act 8 this review, FINRA also is proposing to
authorizes FINRA to prescribe standards reference materials.
revise the Series 22 content outline to
of training, experience, and competence reflect changes to the laws, rules and Revised Content Outline
for persons associated with FINRA regulations covered by the examination As noted above, FINRA is proposing
members. In accordance with that and to incorporate the functions and to move the general securities
provision, FINRA has developed associated tasks currently performed by knowledge currently covered on the
examinations that are designed to Series 22 examination to the SIE
establish that persons associated with 9 See Securities Exchange Act Release No. 81098
examination. For example, FINRA Rule
FINRA members have attained specified (July 7, 2017), 82 FR 32419 (July 13, 2017) (Order
3220 (Influencing or Rewarding
Approving File No. SR–FINRA–2017–007).
levels of competence and knowledge, 10 See Regulatory Notice 17–30 (SEC Approves Employees of Others) (the Gifts Rule)
consistent with applicable registration Consolidated FINRA Registration Rules, will now be tested on the SIE
requirements under FINRA rules. Restructured Representative-Level Qualification examination, rather than on the Series
FINRA periodically reviews the content Examinations and Changes to Continuing Education
22 examination. As a result, the revised
of the examinations to determine Requirements) (October 2017).
11 Each of the current representative-level Series 22 examination will test
whether revisions are necessary or examinations covers general securities knowledge, knowledge specific to the day-to-day
appropriate in view of changes with the exception of the Research Analyst (Series activities, responsibilities and job
pertaining to the subject matter covered 86 and 87) examinations.
functions of a Direct Participation
by the examinations. 12 FINRA filed the SIE content outline with the
Programs Representative.
SEC for immediate effectiveness. See Securities
The SEC recently approved a
daltland on DSKBBV9HB2PROD with NOTICES
Exchange Act Release No. 82578 (January 24, 2018),
proposed rule change to restructure the 83 FR 4375 (January 30, 2018) (Notice of Filing and 13 FINRA currently has organized several FINRA
FINRA representative-level qualification Immediate Effectiveness of File No. SR–FINRA– qualification examinations, such as the Securities
2018–002). In addition to the proposed rule change Trader (Series 57) examination, based on the
relating to the revised Series 22 examination, functions that are performed by the respective
6 The Commission notes that the content outline
FINRA is filing with the Commission for immediate registered persons and the associated tasks. FINRA
is attached to the filing, not to this Notice. effectiveness the content outlines for the other is proposing similar layouts for all of the
7 17 CFR 240.24b–2.
revised representative-level qualification representative-level examinations, including the
8 15 U.S.C. 78o–3(g)(3). examinations. Series 22 examination.
VerDate Sep<11>2014 19:49 Feb 26, 2018 Jkt 244001 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 E:\FR\FM\27FEN1.SGM 27FEN1](https://thefederalregister.org/doc/83_FR_8568/page/2.svg)
![8532 Federal Register / Vol. 83, No. 39 / Tuesday, February 27, 2018 / Notices
rules, regulations and skills relevant to All submissions should refer to File Commission (‘‘Commission’’), pursuant
those functions and associated tasks. As Number SR–FINRA–2018–009. This file to Section 19(b)(1) of the Securities
such, the proposed revisions would number should be included on the Exchange Act of 1934 (‘‘Act’’) 1 and Rule
make the examination more effective. subject line if email is used. To help the 19b–4 thereunder,2 a proposed rule
FINRA also provided a detailed Commission process and review your change to list and trade shares of the
economic impact assessment regarding comments more efficiently, please use Western Asset Total Return ETF, a
the introduction of the SIE examination only one method. The Commission will series of Legg Mason ETF Investment
and the restructuring of the post all comments on the Commission’s Trust under Nasdaq Rule 5735. The
representative-level examinations as internet website (http://www.sec.gov/ proposed rule change was published for
part of the proposed rule change to rules/sro.shtml). Copies of the comment in the Federal Register on
restructure the FINRA representative- submission, all subsequent January 9, 2018.3 The Commission has
level qualification examination amendments, all written statements received no comments on the proposed
program.24 with respect to the proposed rule
rule change.
change that are filed with the
C. Self-Regulatory Organization’s Section 19(b)(2) of the Act 4 provides
Commission, and all written
Statement on Comments on the that, within 45 days of the publication
communications relating to the
Proposed Rule Change Received From of notice of the filing of a proposed rule
proposed rule change between the
Members, Participants, or Others change, or within such longer period up
Commission and any person, other than
Written comments were neither those that may be withheld from the to 90 days as the Commission may
solicited nor received. public in accordance with the designate if it finds such longer period
III. Date of Effectiveness of the provisions of 5 U.S.C. 552, will be to be appropriate and publishes its
Proposed Rule Change and Timing for available for website viewing and reasons for so finding or as to which the
Commission Action printing in the Commission’s Public self-regulatory organization consents,
Reference Room, 100 F Street NE, the Commission shall either approve the
The foregoing rule change has become Washington, DC 20549, on official proposed rule change, disapprove the
effective pursuant to Section 19(b)(3)(A) business days between the hours of proposed rule change, or institute
of the Act 25 and paragraph (f)(1) of Rule 10:00 a.m. and 3:00 p.m. Copies of the proceedings to determine whether the
19b–4 thereunder.26 At any time within filing also will be available for proposed rule change should be
60 days of the filing of the proposed rule inspection and copying at the principal disapproved. The 45th day after
change, the Commission summarily may office of FINRA. All comments received publication of the notice for this
temporarily suspend such rule change if will be posted without change. Persons
it appears to the Commission that such proposed rule change is February 23,
submitting comments are cautioned that
action is necessary or appropriate in the 2018. The Commission is extending this
we do not redact or edit personal
public interest, for the protection of 45-day time period.
identifying information from comment
investors, or otherwise in furtherance of submissions. You should submit only The Commission finds that it is
the purposes of the Act. If the information that you wish to make appropriate to designate a longer period
Commission takes such action, the available publicly. All submissions within which to take action on the
Commission shall institute proceedings should refer to File Number SR–FINRA– proposed rule change so that it has
to determine whether the proposed rule 2018–009, and should be submitted on sufficient time to consider the proposed
should be approved or disapproved. or before March 20, 2018. rule change. Accordingly, the
IV. Solicitation of Comments For the Commission, by the Division of Commission, pursuant to Section
Trading and Markets, pursuant to delegated 19(b)(2) of the Act,5 designates April 9,
Interested persons are invited to authority.27 2018, as the date by which the
submit written data, views, and Eduardo A. Aleman, Commission shall either approve or
arguments concerning the foregoing, disapprove, or institute proceedings to
Assistant Secretary.
including whether the proposed rule
[FR Doc. 2018–03887 Filed 2–26–18; 8:45 am] determine whether to disapprove, the
change is consistent with the Act.
BILLING CODE 8011–01–P proposed rule change (File Number SR–
Comments may be submitted by any of
the following methods: NASDAQ–2017–128).
For the Commission, by the Division of
Electronic Comments SECURITIES AND EXCHANGE Trading and Markets, pursuant to delegated
• Use the Commission’s internet COMMISSION authority.6
comment form (http://www.sec.gov/ [Release No. 34–82757; File No. SR– Eduardo A. Aleman,
rules/sro.shtml); or NASDAQ–2017–128] Assistant Secretary.
• Send an email to rule-comments@ [FR Doc. 2018–03895 Filed 2–26–18; 8:45 am]
sec.gov. Please include File Number SR– Self-Regulatory Organizations; The
FINRA–2018–009 on the subject line. Nasdaq Stock Market LLC; Notice of BILLING CODE 8011–01–P
Designation of a Longer Period for
Paper Comments Commission Action on a Proposed
• Send paper comments in triplicate Rule Change To List and Trade the
to Secretary, Securities and Exchange Shares of the Western Asset Total
Return ETF
daltland on DSKBBV9HB2PROD with NOTICES
Commission, 100 F Street NE,
1 15 U.S.C. 78s(b)(1).
Washington, DC 20549–1090.
February 21, 2018. 2 17 CFR 240.19b–4.
24 See
On December 20, 2017, The Nasdaq 3 See Securities Exchange Act Release No. 82439
Securities Exchange Act Release No. 80371
(April 4, 2017), 82 FR 17336 (April 10, 2017) Stock Market LLC (‘‘Nasdaq’’) filed with (Jan. 3, 2018), 83 FR 1062.
(Notice of Filing of File No. SR–FINRA–2017–007). the Securities and Exchange 4 15 U.S.C. 78s(b)(2).
25 15 U.S.C. 78s(b)(3)(A). 5 Id.
26 17 CFR 240.19b–4(f)(1). 27 17 CFR 200.30–3(a)(12). 6 17 CFR 200.30–3(a)(31).
VerDate Sep<11>2014 19:49 Feb 26, 2018 Jkt 244001 PO 00000 Frm 00115 Fmt 4703 Sfmt 9990 E:\FR\FM\27FEN1.SGM 27FEN1](https://thefederalregister.org/doc/83_FR_8568/page/4.svg)
Document Created: 2018-02-27 01:14:45
Document Modified: 2018-02-27 01:14:45
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 83 FR 8529 |
2024 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR