FINRA Rule 1250(b) discusses FINRA’s Firm Element continuing education requirements. Firm Element continuing education requirements apply to “covered persons”, which is defined as registered persons – including salespeople, traders, sales assistants, investment company shareholder servicing agents, investment bankers, and others who have direct contact with public customers in the conduct of a securities sales, trading, or investment banking business – and their immediate supervisors. The term “customer” in the definition of covered persons includes retail, institutional, and investment banking customers, but does not apply to other broker-dealers. Member firms are required to analyze and evaluate their training needs in light of the firm’s size, organizational structure, scope of business, and types of products and services offered, as well as regulatory developments and the performance of its registered persons pursuant to the Regulatory Element of FINRA Rule 1250(a).
Firm Element continuing education consists of annual, firm-developed and administered training programs designed to keep covered employees current regarding job- and product-related subjects. The Firm Element requires broker-dealers to annually conduct a Needs Analysis and develop a written training plan. In planning, developing, and implementing the Firm Element training, each broker-dealer must take into consideration its size, structure, scope of business, and regulatory concerns.
Member firms should place emphasis on and include elements in their training plans that address changes to firm or industry demographics from the prior year. New products and new rules related to firm business as well as problems member firms may have experienced, such as complaints or regulatory actions, are other important considerations.
Member firms are then responsible for administering their Firm Element Continuing Education Programs in accordance with their annual Needs Analysis and written plan, as well as maintaining records documenting the content of the program and completion of the program by their covered persons.
The Securities Industry/Regulatory Council on Continuing Education recently released its semi-annual Firm Element Advisory. The Firm Element Advisory, which was previously released semi-annually in document format, is now available on the web at http://cecouncil.com/firm-element/.
The web format provides easy access to relevant notices and resources about specified subjects and will be updated quarterly to keep the information current and relevant. The categories are expandable and may contain additional information about suitability, supervision, and educational resources.
Member firms should consider the specific nature of their business, clients, products, and services when creating their Firm Element written training plans. The Securities Industry/Regulatory Council on Continuing Education produces the Firm Element Advisory to identify regulatory and sales practice topics that member firms should also consider when conducting their needs analysis and developing training plans.
