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Regulation and Compliance > Federal Regulation > FINRA

FINRA Makes Big Adjustments to CE Rules

By Melanie Waddell

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What You Need to Know

  • Those registered with FINRA must now complete continuing education requirements yearly instead of every three years.

The Financial Industry Regulatory Authority on Wednesday adopted changes to its continuing education (CE) and registration rules, which include, among other measures, requiring those registered with FINRA to complete continuing education requirements yearly instead of every three years.

As FINRA states in Regulatory Notice 21-41, the amendments to Rules 1210 and 1240: (1) provide eligible individuals who terminate any of their representative or principal registration categories the option of maintaining their qualification for any terminated registration categories by completing annual CE through a new program, the Maintaining Qualifications Program (MQP); (2) require registered persons to complete CE Regulatory Element annually for each representative or principal registration category that they hold; and (3) expressly allow firms to consider other required training toward satisfying an individual’s annual CE Firm Element and extend the Firm Element requirement to all registered persons.

The changes relating to the MQP and the Financial Services Affiliate Waiver Program will become effective March 15, 2022.

All other changes, including the changes relating to the Regulatory Element, Firm Element and the two-year qualification period, will become effective Jan. 1, 2023, FINRA said.

Regulatory Element Changes

Beginning on Jan. 1, 2023, registered persons must now complete the Regulatory Element, which focuses on regulatory requirements and industry standards, annually by Dec. 31 of each year that they are registered.

In addition, the amended rules require registered persons to complete Regulatory Element content for each representative or principal registration category that they hold.

Along with this change, FINRA has developed tailored Regulatory Element content that is specific to each registration category, the regulator explained.

“Further, to provide firms with sufficient time to review the Regulatory Element topics for each upcoming year, FINRA and the CE Council will publish the topics” by no later than Oct. 1 of the prior year, FINRA said.

The amended rules also include changes to the provisions relating to CE inactive status.

Specifically, FINRA states, “individuals who fail to complete their Regulatory Element within the prescribed annual deadline of Dec. 31 will be automatically designated as CE inactive by FINRA.”

However, FINRA states that it “preserves its ability to extend the time by which a registered person must complete the Regulatory Element for good cause shown.”

Under the amended rules, if an individual’s registration status remains unchanged after Jan. 1, 2023, the individual’s initial annual Regulatory Element due date will be Dec. 31, 2023.

Firm Element Requirements

As to the Firm Element requirements, FINRA has amended the CE rules to extend the annual Firm Element requirement to all registered persons, including individuals who maintain solely a permissive registration consistent with Rule 1210.02, beginning Jan. 1, 2023.

FINRA has also amended the CE rules to expressly allow firms to consider training relating to the anti-money laundering compliance program under Rule 3310(e) and the annual compliance meeting under Rule 3110(a)(7) toward satisfying an individual’s annual Firm Element requirement, the broker-dealer self-regulator states.

New MQP Program

FINRA also amended the CE rules to provide that beginning March 15, 2022, eligible individuals who terminate any representative or principal registration category, including any permissive registration category under Rule 1210.02, have the option of maintaining their qualification for the terminated registration category beyond the current two-year qualification period by completing annual CE through a new program, the MQP.

Melanie Waddell

@Think_MelanieW

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