FINRA’s Amendments to Continuing Education Take Effect January 1st
On November 17, 2021, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 21-41, which outlines Rule 1210 and 1240 amendments related to registered persons’ continuing education (CE) requirements. Specifically, beginning January 1, 2023, all registered representatives (RRs) will be required to complete their CE Regulatory Element (RE) training annually by December 31st of each year in which they are registered.
FINRA will provide CE topics annually for all registration categories, from which chief compliance officers (CCOs) can select courses relevant to their RRs. All RRs will then need to complete the courses identified for each of their registration categories by December 31st. Firms may, at their discretion, require RRs to complete their courses earlier than December 31st. RRs who do not complete the required courses by the deadline will be deemed “CE inactive.”
The rule changes also provide RRs who have terminated any of their representative or principal registrations with the option of maintaining their qualifications for certain registration categories by completing their annual CE through the Maintaining Qualifications Program. Individuals who elect to take this option will have a maximum of five years in which to reregister with a member firm without having to requalify by exam or having to obtain an exam waiver.
FINRA has also updated the “Firm Element” requirement to apply to all registered persons beginning January 1, 2023. Previously, the requirement applied to “covered registered persons” as defined in the rule.
To help firms comply with the new requirements, FINRA has provided Frequently Asked Questions (FAQ) Related to Regulatory Notice 21-41. RN 21-41 also included a chart which lists various scenarios of RRs who would need to complete the Firm Element by December 31, 2022, and scenarios in which RRs may not have to complete the Firm Element until December 31, 2023.
ACA recommends that firms review RN 21-41 and the associated FAQs to plan their RE compliance. Firms should consider sending an alert to RRs informing them of the new requirements. In addition, a best practice would be to require all RRs to complete the RE courses no later than the end of the third quarter annually. This would ensure that all RRs complete the required courses on time and thus avoid becoming CE inactive.
How we help
Our broker-dealer services division helps firms comply with FINRA's regulatory requirements. Our consultants can assist in designing customized procedures that will detail the steps needed to address the continuing education requirements as they relate to your firm.
For more information about these new requirements, or to find out how we can help your firm comply, please reach out to your ACA consultant or contact us here.