Coming this January, some big changes are coming down the line regarding the continuing education of broker-dealers and registered investment advisors. If you’re someone who works in compliance, licensing and registration or is part of a team that manages your firm’s continuing education program, this article summarizes the intended impact to three key areas of CE, which are: 1.) Regulatory Element 2.) Firm Element and 3.) IAR CE.
Regulatory Element CE
Regulatory Element must be completed annually and will be tailored to each registration category.
Effective January 1, 2023, FINRA Rule 1240 and other self-regulatory organization (SRO) rules will require registered securities professionals to complete the Regulatory Element annually. In this revised program, content will be tailored to each registration category, and registered securities professionals will be required to complete courses specifically designed for each representative or principal registration category that they hold. The 2023 Regulatory Element learning topics will be published by October 1, 2022. To facilitate these changes, the CE Council is working with regulators to implement improved systems for tracking, notifications and reporting.
Firm Element CE
Firm Element will apply to all registered individuals, including those with a permissive registration.
The Firm Element requirement is designed to keep registered securities professionals up to date on job- and product-related subjects. Effective January 1, 2023, FINRA Rule 1240 and other SRO rules will provide that Firm Element training must cover topics related to the role, activities or responsibilities of the registered individual, as well as professional responsibility.
Th upcoming rule changes will also extend the Firm Element requirement to all registered individuals, including those who maintain solely a permissive registration consistent with FINRA Rule 1210.02. In order to ease the burden of this rule change and create a holistic educational experience in conjunction with Regulatory Element training, the CE Council is also:
- recognizing that other training requirements can be applied to Firm Element CE, including existing programs such as anti-money laundering (AML) training and the firm’s annual compliance meeting (ACM);
- making enhancements to the Firm Element Needs Analysis Quarterly Highlights (formerly known as Firm Element Advisory (FEA)) and the CE Council Guide to Continuing Education Firm Element Programs; and
- developing a centralized content catalog, consisting of training that will be available to firms as an optional resource to select relevant training courses (not available yet).
To learn more about Quest CE’s Firm Element solution, click here.
Nine additional states plan to adopt an annual IAR CE requirement.
While NASAA’s IAR CE rule officially took effect at the beginning of this year for all IARs licensed in Vermont, Maryland and Mississippi, on January 1, 2023, it looks like nine additional states plan to come onboard. To see which states are adopting the January 1, 2023 requirement, click here.
IARs will need to attain 12 CE credits each year to maintain their IAR registration. This includes 6 credits of Products and Practices and 6 credits of Ethics and Professional Responsibility. An IAR who is also registered as an agent of a FINRA member firm and complies with FINRA’s CE requirement may be considered in compliance with the Products and Practices component. These individuals are only required to complete six hours of Ethics and Professional Responsibility training annually.
To learn more about Quest CE’s solution, click here.