[Federal Register Volume 76, Number 147 (Monday, August 1, 2011)]
[Notices]
[Pages 45883-45885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19324]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64961; File No. SR-FINRA-2011-026]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change Regarding Cancellation or Rescheduling Fees for
Qualification Examinations and Continuing Education Sessions
July 26, 2011.
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 July 15, 2011, 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. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to amend Section 4(c) of Schedule A to the FINRA
By-Laws to address cancellation/rescheduling fees for qualification
examinations and continuing education sessions. Specifically, the
proposed rule change would (1) Establish a fee for individuals who
cancel or reschedule a qualification examination or Regulatory Element
Continuing Education (``Regulatory Element'') session three to ten
business days prior to the appointment date, and (2) add a reference to
the fee for individuals who fail to timely appear for a scheduled
Regulatory Element session or who cancel or reschedule such a session
within two business days prior to the appointment date.
The text of the proposed rule change is available on FINRA's Web
site at http://www.finra.org, at the principal office of FINRA, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
As discussed in further detail below, the proposed rule change
amends Section 4(c) of Schedule A to the FINRA By-Laws to (1) Establish
a fee for individuals who cancel or reschedule a qualification
examination or Regulatory Element session three to ten business days
prior to the appointment date, and (2) add a reference to the fee for
individuals who fail to timely appear for a scheduled Regulatory
Element session or who cancel or reschedule such a session within two
business days prior to the appointment date.
Three- to Ten-Day Cancellation/Rescheduling Fee
Pursuant to NASD Rules 1021 and 1031, any person engaged in the
investment banking or securities business of a FINRA member must
register with FINRA in the category of registration appropriate to the
function
[[Page 45884]]
the individual will be performing. As part of the registration process,
securities professionals must pass a qualification examination to
demonstrate competence in the areas in which they will work. In
addition, such individuals must complete the appropriate Regulatory
Element program subsequent to their initial qualification and
registration with FINRA, as set forth in NASD Rule 1120.\3\ The
qualification examinations and Regulatory Element programs cover a
broad range of subjects regarding financial markets and products,
individual responsibilities, securities industry rules, and regulatory
structure. FINRA develops, maintains, and delivers all qualification
examinations and Regulatory Element programs for individuals who are
registered or seeking registration with FINRA. FINRA also delivers
examinations sponsored by the North American Securities Administrators
Association, the National Futures Association, the Federal Deposit
Insurance Corporation, and others. FINRA currently administers
examinations and Regulatory Element programs via computer at testing
centers operated by vendors under contract with FINRA.
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\3\ The SEC has approved the adoption of NASD Rule 1120
(Continuing Education Requirements) as FINRA Rule 1250 (Continuing
Education Requirements) in the consolidated FINRA rulebook with
certain changes. See Securities Exchange Act Release No. 64687 (June
16, 2011), 76 FR 36586 (June 22, 2011) (Order Approving SR-FINRA-
2011-013). FINRA will issue a Regulatory Notice announcing the
effective date of FINRA Rule 1250 in the near future.
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To request and schedule an appointment for a qualification
examination, a FINRA member must file a Form U4 (Uniform Application
for Securities Industry Registration or Transfer) through the Central
Registration Depository (``Web CRD[supreg]'').\4\ After the request is
processed, a scheduling window will be posted on Web CRD. For
Regulatory Element programs, registered persons in covered registration
categories will automatically become enrolled for the requisite program
on the second anniversary of their initial securities registration and
every three years thereafter. Once an individual or an individual's
firm receives the enrollment notification for an examination or
Regulatory Element session, the individual may then contact a FINRA
authorized testing center to schedule an appointment.
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\4\ Individuals who are not employed or associated with a FINRA
member must file a Form U10 (Uniform Examination Request for Non-
FINRA candidates) with FINRA to schedule an examination.
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After an examination or Regulatory Element session has been
scheduled, an individual may cancel or reschedule the appointment by
contacting the testing center. Currently, FINRA does not impose a fee
for cancelling or rescheduling an appointment if it is done by noon two
business days before the scheduled appointment. FINRA charges a
cancellation fee equal to the examination or Regulatory Element session
fee if this deadline is not met, if an individual does not appear for
an appointment, or if an individual arrives so late for an appointment
that the examination or Regulatory Element session cannot begin without
disrupting the testing center's schedule.\5\
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\5\ Further information about the cancellation policy can be
found on FINRA's Web site at http://www.finra.org/Industry/Compliance/Registration/QualificationsExams/RegisteredReps/Qualifications/P120071.
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FINRA has determined that individuals who cancel or reschedule an
appointment more than two business days before the scheduled
appointment date also place an administrative burden on test-delivery
vendors and degrade the efficiency of test center resource utilization.
To discourage such behavior, FINRA is proposing to implement a fee for
individuals who cancel or reschedule a qualification examination or
Regulatory Element session within three to ten business days of a
scheduled appointment date.\6\ The amount of the proposed fee would be
one-half of the fee of the examination or Regulatory Element session
being cancelled or rescheduled.\7\ FINRA believes that this fee will
help to control the overall costs associated with the delivery of
examinations and Regulatory Element programs and the resultant
examination and Regulatory Element session fees charged to individuals
for examinations and Regulatory Element programs.
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\6\ The cancellation/rescheduling fee will be assessed for the
qualification examinations set forth in Section 4(c) of Schedule A
to the FINRA By-Laws and all Regulatory Element programs. In
addition, depending on the terms of agreement, the fee also may
apply for those qualification examinations that FINRA delivers for
other entities.
\7\ The fee must be paid at the time of cancellation or
rescheduling. In those circumstances where the fee is not paid in a
timely manner, FINRA, instead, will assess a fee equal to the
examination or Regulatory Element session fee if the individual does
not appear for the scheduled appointment.
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Continuing Education Failure To Timely Appear/Late Cancellation or
Rescheduling Fee
As previously mentioned, FINRA assesses a fee equal to the
examination or Regulatory Element session fee to individuals who fail
to timely appear for an appointment or who cancel or reschedule an
examination or Regulatory Element session within two business days of
the scheduled appointment date.\8\ Although Section 4(c) of Schedule A
to the FINRA By-Laws currently sets forth this fee for qualification
examinations, it does not set forth the fee with respect to the
Regulatory Element program. Consequently, FINRA is proposing to amend
Section 4(c) of Schedule A to the FINRA By-Laws to add a reference to
this Regulatory Element program fee. The proposed rule change would
also specifically reference the time period for which this fee applies
(i.e., within two business days prior to the appointment date).
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\8\ FINRA considers an individual who fails to cancel or
reschedule an examination or Regulatory Element session by noon two
business days before the scheduled appointment to have failed timely
to cancel or reschedule the appointment under Section 4(c)(2) of
Schedule A to the FINRA By-Laws. See supra note 7.
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FINRA has filed the proposed rule change for immediate
effectiveness. FINRA is proposing that the implementation date of the
proposed rule change will be September 1, 2011.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A of the Act,\9\ in general, and with Section
15A(b)(5) of the Act,\10\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which FINRA operates or controls. FINRA believes that it is an
equitable allocation to assess a fee on those individuals who cancel a
qualification examination or Regulatory Element session within three to
ten business days of a scheduled appointment date, because such
behavior places an administrative burden on test-delivery vendors and
degrades the efficiency of test center resource utilization. FINRA
further believes that the amount of the fee, which is one-half of the
current fee for individuals who fail to appear for a scheduled
appointment or who cancel/reschedule an appointment within two business
days of a scheduled appointment date, is reasonable because it will
help to control the overall costs associated with the delivery of
examinations and Regulatory Element programs while also recognizing the
lesser burden that results from those individuals who provide
additional notice by cancelling/rescheduling an appointment three to
ten business days
[[Page 45885]]
before the scheduled appointment date. FINRA further believes that the
amount of the fee is reasonable because it will dissuade individuals
from cancelling or rescheduling an appointment three to ten business
days before the scheduled appointment date.
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\9\ 15 U.S.C. 78o-3(b)(5).
\10\ Id.
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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.
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 \11\ and paragraph (f)(2) of Rule 19b-4
thereunder.\12\ 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.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-FINRA-2011-026 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2011-026. This
file number should be included on the subject line if e-mail 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 Web site (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 Web site
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 a.m. and 3 p.m. Copies of such filing also will be
available for inspection and copying at the principal office of FINRA.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make publicly
available. All submissions should refer to File Number SR-FINRA-2011-
026 and should be submitted on or before August 22, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-19324 Filed 7-29-11; 8:45 am]
BILLING CODE 8011-01-P