FINRA Continuing Education Registration Requirements

FINRA Expands Registration Permissions

By Oyster Consulting LLC

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In 2018 FINRA established new registration and qualification requirements for broker-dealers, including:

  • creating a new two-tiered representative qualification system consisting of a general knowledge examination that all representative-level applicants are required to pass (the Securities Industry Essentials or “SIE” examination) and an array of specialized qualification exams tailored to particular registered roles;
  • require firms to designate a Principal Financial Officer and a Principal Operations Officer;
  • allowing firms to permissively register, or maintain the registration of, any associated person as a representative or principal, regardless of job function (including clerical or ministerial roles).

Please see our previous blogs on the 2018 FINOP requirements and the updated registration categories.

Expanded Registration Permissions Overview

In 2018 FINRA expanded its permissive registrations to include all associated persons, including those working solely in a clerical or ministerial capacity.  Previously, firms were only allowed to register or maintain the registrations of certain types of job functions (e.g., technology department employees).

Permissively registered individuals are considered associated persons and registered persons of a member firm. They are subject to all FINRA rules relevant to their activities, including rules that have general application to a registered person’s conduct such as FINRA Rules 3270 and 3280 relating to outside business activities and private securities transactions. They must also satisfy the Continuing Education (CE) Regulatory Element.

Ensuring Permissive Registration and Continuing Education Compliance

Permissive Registration Compliance

  • Consistent with the requirements of Rule 3110, FINRA members must have adequate supervisory systems and procedures reasonably designed to ensure that individuals with permissive registrations do not act outside the scope of their assigned functions.
  • For an individual who solely maintains a permissive registration, firms must assign a registered supervisor to this individual to be responsible for periodically verifying that the individual is not acting outside the scope of his or her assigned function. A registered representative can supervise these individuals. The registered supervisor does not need to have the same registration category as the individual (e.g., a Series 6 can supervise a Series 7 employee, a Series 79/24 can supervise a Series 6 employee).

    Continuing Education Compliance

    FINRA’s Regulatory Element CE must be completed on an annual basis, and every registered person will be required to complete the Regulatory Element by December 31 of each year.  Content of the Regulatory Element CE will be specific to each registration that an individual maintains.

    FINRA’s minimum Firm Element Continuing Education requirements state that “Training must cover topics related to professional responsibility and to the role, activities or responsibilities of the registered person.” The training program used must cover the needs of the firm based on an Annual Needs Analysis, the training plan must be in writing, and records of completion must be kept for all participants.

    Registration and Continuing Education Support

    Oyster Consulting will review your firm’s registrations to ensure they are compliant, and will conduct a review of your firm’s Branch Exam program, including a review of employee records and outside business activities. Oyster Consulting’s experts can also assist with amending policies and procedures to reflect registration and supervision requirements.

    Our team of regulatory compliance consultants has extensive experience providing compliance support to broker-dealers. Among other services we can provide assistance with your CE program needs. 

    Additional Continuing Education Resources:

    FINRA’s Continuing Education Requirements

    Take Advantage of FINRA’s Maintaining Qualifications Program

    Registered Representative Compliance – Must Know Essentials

    Modernize Your Compliance Program

    Oyster Consulting provides modern governance, risk and compliance software to help you organize and automate your compliance program. 

    About The Author
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    Oyster Consulting

    Oyster Consulting gives financial services industry clients innovative tools to understand, automate, optimize and analyze crucial functions. We have the expertise, experience and licensed professionals you need, all under one roof. Our seasoned industry leaders provide consulting, outsourcing and software to help you plan, manage risk, achieve compliance and optimize operations so you can focus on running and growing your business.