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Melanie Waddell

Regulation and Compliance > Federal Regulation > FINRA

Get Ready: FINRA’s New CE Rules Start in January

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As a part of a revamp of the Financial Industry Regulatory Authority’s continuing education program, broker-dealers and their reps face new CE requirements in January — with courses likely to drill down on the Securities and Exchange Commission’s Regulation Best Interest.

Last November, FINRA adopted changes to its CE and registration rules, which included, among other measures, requiring those registered with FINRA to complete continuing education requirements yearly instead of every three years.

As FINRA set out in Regulatory Notice 21-41, the amendments to Rules 1210 and 1240:

  • 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);
  • require registered persons to complete the CE Regulatory Element annually for each representative or principal registration category that they hold; and
  • 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 kicked in on March 15.

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.

Patricia Monterosso, director of CRED Continuing Education Services at FINRA, said on a recent FINRA unscripted podcast that nearly 15,000 individuals have enrolled in the MQP program.

“Beginning in July of this year, those individuals received their annual CE Learning Plans for 2022, which includes a regulatory element which is similar to what a registered person would receive, and additional training courses that are part of a practical element,” Monterosso said.

The MQP program allows people to maintain their series exams — Series 7, Series 24 and the like — for five years instead of just two years, Monterosso explained, as long as they complete some CE.

Nicole Lefort, associate director of Continuing Education Content, added on the podcast that “the regulatory element will now be an annual requirement. New courses will be provided at the beginning of each year and individuals will have a December 31 deadline to complete.”

As for the content, Lefort added, “we are producing courses that are relevant and tailored to registration categories. We will be providing training specific to a particular audience, which allows us to emphasize what individuals need to know based on their registration or registrations they hold. Very generally, our courses will focus on topics within new rules and amendments, industry trends, as well as core content.”

Jeremy Solomon, president and co-founder of Solomon Exam Prep, which creates securities licensing exam prep for FINRA as well as the North American Securities Administrators Association qualification exams, told me that the annual regulatory CE element “should help keep registered persons more current and up to date in their industry knowledge. The new annual schedule is also simpler and less confusing.”

Monterosso said the regulatory element, which is administered by FINRA, “focuses on regulatory changes such as new rules and amendments and regulatory trends. While the firm element, which is provided by each firm, focuses on securities products, services and strategy. It’s policy and industry trends.”

A firm element might be anti-money laundering, whereas a regulatory element might be Reg BI.

AML, Monterosso said, “could also be covered as part of the regulatory element depending on if there’s a significant rule change. But the firm would also cover AML as part of its firm element training to hone in on firm policies, more specifically.”

Reps with multiple registrations “may have more content to complete than individuals with a single registration,” Lefort added, “because they’re going to be required to complete content specific to each registration category they hold.”


FINRA isn’t the only regulatory group with new CE plans.

Solomon recently added CE to its product offering and has been approved by NASAA as a CE provider for the forthcoming 2022 IAR CE requirement.

The NASAA Model Rule for CE for investment advisor reps, adopted in November 2020, “seems to be on track to be adopted nationwide,” Solomon said.

In 2022, three states adopted it: Vermont, Maryland and Mississippi. So this is the first year IARs have had to comply with NASAA CE requirements.

“State regulators and firms have determined that IARs, like other highly skilled professionals with important fiduciary responsibilities, should be required to do continuing education,” Solomon said.

Maryland Securities Commissioner Melanie Senter Lubin told me in an email that NASAA’s IAR CE committee “is actively planning for year two of the program and its continued growth. As of right now, seven additional NASAA members have adopted IAR CE requirements, bringing it to 10 jurisdictions entering the New Year.”


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