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FINRA Boosts Regulatory CE Requirements

The change means reps will take a portion of the regulatory agency's continuing education program once a year, as opposed to every three years.

FINRA will now require registered representatives to complete the regulatory aspect of its continuing education program every year, as opposed to the previous schedule that required them to participate every three years. The agency agreed to the shift in its last board of governors meeting for the year, which was held virtually last week.

The amendments to Rules 1210 and 1240 will also let people who had terminated their FINRA registrations reregister “for an extended period” without retaking necessary exams if they have continued to keep their CE requirements up to date.

The regulatory agency’s CE program was established almost 25 years ago, with registered representatives required to complete “regulatory” and “firm” courses. The former focuses on “regulatory requirements and industry standards.” In 2015, FINRA transitioned the regulatory CE requirement to an online platform.

According to the notice posted when the change was proposed, the three-year time frame for this part of the CE program was based on the fact that representatives had to complete it at a test center in person. The online version means they now have flexibility to complete the requirement remotely and on their own time.

Therefore, FINRA proposed that the regulatory portion must now be completed annually “to provide registered persons more timely training on regulatory developments.” Registered individuals will have to complete that part of the CE program by the end of each calendar year. If they don’t, a representative would be “designated as CE inactive” by January 15 of the following year. The change just needs approval from the Securities and Exchange Commission to take effect. 

In addition to FINRA’s CE shifts, the North American Securities Administrators Association (NASAA) recently announced a model rule that would require investment advisor representatives to complete 12 annual hours of continuing education in total, if it were to be adopted by states. NASAA President and West Virginia Senior Deputy Securities Commissioner Lisa Hopkins said the rule had been years in the making, and the association sought out comments from state securities regulators and industry groups alike.

“This successful collaboration will help promote heightened regulatory compliance while also helping investment adviser representatives better serve their clients by remaining knowledgeable of current regulatory requirements and best practices,” Hopkins said.

The next meeting for the FINRA Board of Governors will be March 3.

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