FINRA ALERT: CE Council Releases Fall 2014 Firm Element Advisory
MILWAUKEE – October 14, 2014 – The Securities Industry/Regulatory Council on Continuing Education (Council) recently published its semi-annual Firm Element Advisory (FEA) to highlight current regulatory and sales practice topics for possible inclusion in firms’ 2014 Firm Element training plans. In the 34-page document, the Council identifies topics from a review of industry, regulatory and self-regulatory organization (SRO) announcements, and publications of significant events.
The following is a list of ‘hot-topics’ that firms should remain aware of when developing their Firm Element programs, as suggested by the Securities Industry/Regulatory Council on CE:
In June 2013, FINRA issued an Investor Alert on alternative funds to inform investors of the characteristics and risks of these investments.
Quest CE Course Suggestion: Alternative Investments, Alternative Investments: Now Part of Mainstream Investing, Alternative Investment Strategies – Currency, Alternative Investment Strategies – Long Short, Alternative Investment Strategies – Market Neutral, Alternative Investment Strategies – Multi Alternative, Alternative Investment Companies [See Firm Element Course Catalog].
SUPERVISION OF COMPLEX PRODUCTS
In October 2013, FINRA published guidance to firms about supervisory controls for complex products, which may include a security or investment strategy with novel, complicated or intricate derivative-like features.
Quest CE Course Suggestion: Understanding Complex Products, Heightened Supervision: Who, When, Why and How [See Firm Element Course Catalog].
Firms must maintain current AML programs and train staff appropriately. Quest CE provides an array of courses related to AML rules, regulations and compliance.
Quest CE Course Suggestion: Advanced Anti-Money Laundering Overview, Anti-Money Laundering and the Red Flag Rule, Anti-Money Laundering Compliance Obligations for Retail Representatives, Anti-Money Laundering: Review Everyday Scenarios and Enforcement Cases [See Firm Element Course Catalog].
Business continuity remains a priority for firms and their associated persons. It is important that firms maintain adequate business continuity and contingency plans, and ensure that employees are aware of and understand these plans.
Quest CE Course Suggestion: Business Continuity Planning [See Firm Element Course Catalog].
COMMUNICATIONS WITH THE PUBLIC
On February 4, 2013, FINRA Rules 2210 and 2212 through 2216 (collectively, the Communications Rules) replaced NASD Rules 2210 and 2211, and a number of NASD Interpretive Materials that followed NASD Rule 2210, along with certain provisions of Incorporated NYSE Rule 472 and certain Supplementary Material and Rule Interpretations related to NYSE Rule 472.
Quest CE Course Suggestion: Changes to FINRA’s Public Communication Rules for Registered Representatives, Changes to FINRA’s Public Communication Rules for Supervisors, Electronic Communications for Registered Representatives, or Communications with the Public: Best Practices for Wholesalers [See Firm Element Course Catalog].
Quest CE Course Suggestion: Private Resale of Restricted Securities to Qualified Institutional Buyers, Advanced Private Placements, Regulation D Private Placements [See Firm Element Course Catalog].
Quest CE Course Suggestion: Annual Compliance Reminders for Registered Representatives – Vol. 4, Life Settlements, Order Execution Qualifiers, Types of Accounts, FACT Act of 2003 – The Red Flags Rules [See Firm Element Course Catalog].
Quest CE Course Suggestion: FINRA Code of Arbitration and Mediation and Procedure [See Firm Element Course Catalog].
FINANCIAL RESPONSIBILITY RULES FOR BROKER-DEALERS
In July 2013, the SEC adopted amendments to the net capital, customer protection, books and records, and notification rules and amended the annual reporting and audit requirements under SEA Rule 17a-5.
Quest CE Course Suggestion: Books and Records: Representative Responsibilities, Anti-Money Laundering for Broker Dealers [See Firm Element Course Catalog].
MARGIN AND MARGIN ACCOUNTS
Quest CE Course Suggestion: Margin Trading, FINRA Back Office Operations [See Firm Element Course Catalog].
Quest CE Course Suggestion: Supervision of Municipal Securities Representatives, Customer Data Protection and the Municipal Securities Representative, Ethics and Professional Conduct for the Municipal Securities Representative [See Firm Element Course Catalog].
Quest CE Course Suggestion: Options Basic, Advanced Options Strategies [See Firm Element Course Catalog].
REGISTRATION AND DISCLOSURE
FINRA periodically reviews the content of qualification examinations to determine whether revisions are necessary or appropriate in view of changes—including changes to the laws, rules and regulations—pertaining to the subject matter covered by the examinations. Based on this review process, FINRA has revised the General Securities Principal (Series 24), General Securities Principal Sale Supervisor Module (Series 23), and the Investment Company and Variable Contracts Products Principal (Series 26) examination program.
Quest CE Course Suggestion: FINRA Rule 1230(b)(6): Operations Professional Registration, Investment Adviser- Fiduciary Responsibilities, Monitoring and Supervision of Personal Securities Transactions, Outside Business Activities and Private Securities Transactions [See Firm Element Course Catalog].
SALES PRACTICE AND SUPERVISION
The SEC approved new consolidated FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control System) to replace NASD Rules 3010 (Supervision), 3012 (Supervisory Control System) and corresponding provisions of the NYSE Rules and Interpretations.
FINRA Rule 2090 (Know Your Customer) requires a firm to use “reasonable diligence, in regard to the opening and maintenance of every account, to know (and retain) the essential facts concerning every customer.” Moreover, FINRA reminded firms of their supervisory obligations regarding their registered persons’ use of senior designations.
Quest CE Course Suggestion: FINRA Rule 3130 and NASD Rule 3012: Supervisory Controls, FINRA Rule 2330 Supervisory Training, FINRA’s Suitability and Know Your Customer Rules, Protecting Senior Investors, Suitability: Red Flags for Seniors [See Firm Element Course Catalog].
TRADING PRACTICES AND SUPERVISION
Quest CE Course Suggestion: Preventing and Detecting Unauthorized Trading, Securities Trading, Advanced Look at Insider Trading, Insider Trading [See Firm Element Course Catalog].
Click here to read the complete Fall 2014 Firm Element Advisory Notice.
Click here to read the CE Council’s Guide to Firm Element Needs Analysis and Training Plan Development.
Click here for more information on Quest CE’s Firm Element Programs
About Quest CE
For over twenty-five years, Quest CE has been the premier provider of Compliance Education to the financial services industry. In addition to offering Providership Administration and insurance continuing education (CE) for professionals holding insurance licenses and professional designations like the CFP, CPA, CLE, CIMA and CLU/ChFC , Quest CE also provides a complete spectrum of FINRA compliance training solutions including annually required Firm Element Training for registered representatives, on-demand Annual Compliance Meetings, Annual Compliance Questionnaires, Needs Analysis Surveys, Outside Business Activity Tracking, Gifts and Entertainment Tracking, Political Contributions Tracking, Branch Audit Management and Licensing and Registration.
Serving more than 650 leading insurance carriers, broker-dealers, banks, and other financial institutions, Quest CE is committed to providing advanced custom solutions at cost effective rates, while providing a level of service that greatly surpasses that of our competitors. Quest CE is the single source solution for organizations seeking training and compliance needs. For more information on Quest CE, visit http://www.questce.com.