FINRA has adopted important changes to its continuing education (CE) and registration rules to train registered persons more effectively while accommodating registered persons, particularly women and underrepresented minorities, whose personal circumstances take them away from the industry for a time.
Maintaining Qualifications Program
FINRA has 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.
FINRA has also made a related change to Rule 1210.08 to apply the two-year qualification period to certain partial terminations that are currently not subject to the two-year qualification period beginning January 1, 2023. Eligible individuals who elect not to participate in the MQP could continue to avail themselves of the two-year qualification period (i.e., they could reregister within two years of terminating a registration category without having to requalify by examination or having to obtain an examination waiver). MQP participants will have a maximum of five years following the termination of a representative or principal registration category to reregister without having to requalify by examination or having to obtain an examination waiver, subject to satisfying the conditions of the MQP.
Annual Regulatory Element for Each Registration Category
FINRA has amended the CE rules to require that beginning January 1, 2023, registered persons complete the Regulatory Element annually by December 31 of each year that they are registered for each representative or principal registration category that they hold. In conjunction with this change, FINRA has developed tailored Regulatory Element content that is specific to each registration category. 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 October 1 of the prior year.
Individuals who fail to complete their Regulatory Element within the prescribed annual deadline of December 31 will be automatically designated as CE inactive by FINRA. However, FINRA preserves its ability to extend the time by which a registered person must complete the Regulatory Element for good cause shown.
Recognition of Other Training Requirements for Firm Element
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 January 1, 2023. In conjunction with this change, 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. In addition, FINRA has revised the current minimum Firm Element training criteria to provide that the training must cover topics related to the role, activities, or responsibilities of the registered person and to professional responsibility.
For more information on FINRA’s changes to continuing education, check out Regulatory Notice 21-41.
MasterCompliance provides expert consulting, outsourcing, and implementation tools in planning and budgeting for your firm’s compliance responsibilities. If you would like assistance understanding and applying FINRA’s changes to continuing education to your firm, please contact us.
