The Financial Industry Regulatory Authority said today that it would issue a notice soon with information on how the industry should implement a rule approved by the SEC on June 16 that requires registration, testing and continuing education for some operations staff and supervisors.
“A notice should come out in two to three weeks,” said Nancy Condon, a FINRA spokesperson, in a brief interview.
On Thursday, the SEC approved FINRA Rule 1230(b)(6), which establishes a registration category and qualification examination requirement for certain operations personnel and adopts continuing-education requirements for them.
“FINRA believes the proposed rule change is necessary to help ensure that investor protection mechanisms of the highest level possible are in place in all areas of a member’s business that could harm the member, a customer, the integrity of the marketplace or the public,” it said in a letter to the SEC supported its new regulation.
The SEC noted in its decision that it had received 17 critical comment letters on the proposed rule change, including input from Wells Fargo Advisors, Charles Schwab, Goldman Sachs, Janney Montgomery Scott and the Financial Services Institute (FSI). For instance, FSI’s letter asserted that “a qualification examination is unnecessary to meet the objectives of the proposal and recommends using firm written supervisory procedures and … training.”
According to FINRA, those required to register, take exams and go through continuing education are: “(1) senior management with responsibility over the covered functions; (2) supervisors, managers or other persons responsible for approving or authorizing work, including work of other persons, in direct furtherance of the covered functions; and (3) persons with the authority or discretion materially to commit a member’s capital in direct furtherance of the covered functions or to commit a member to any material contract or agreement (written or oral) in direct furtherance of the covered functions.”