Broker-dealers and their advisors are trying to get up to speed with the Financial Industry Regulatory Authority’s (FINRA) new rule 1230(b)(6) requiring operations personnel at their firm to register with FINRA and pass a qualifications exam. Two areas that are creating confusion are exactly which personnel must take the exam and which exam they will take.
Richard Ketchum, CEO of FINRA, said in a recent speech that the Securities and Exchange Commission (SEC) recently approved the rule and that FINRA would be issuing a regulatory notice “shortly” announcing the rule’s effective date.
Ketchum (left) said that FINRA had recently clarified that “covered persons” under the rule “do not necessarily need to be the most senior managers at the firm.” Instead, he said, “the rule dictates that those who must register are the most senior managers with delegated direct responsibility for the covered functions in the rule.” FINRA has also clarified the level of managers below senior management who would be covered, he explained. “Our filing indicates that those individuals designated as a supervisor or manager for the covered functions would be covered.”
Nancy Lininger, a compliance consultant and founder of The Consortium, says that the rule basically applies to back-office personnel. While “sales people have always taken exams, now operations people have to take exams because they are handling money,” she says.