NASD (now known as FINRA) Rule 1120 describes the continuing education requirements for registered representatives and principals. There are two parts to these requirements - the Firm Element and the Regulatory Element.

Firm Element
All registered persons who have direct contact with customers in their normal course of business are subject to the Firm Element. This is designed to keep registered representatives and principals updated on job and product related subjects. Each member firm must prepare an annual training plan based on the firm's line of business, regulatory developments and new products.

The FINRA permits the firms to create and administer their own programs, subject to requirements, including:

  • The firms must evaluate their training needs at least annually and use the evaluation to create written training plans.
  • Records must be kept indicating dates of completion of the Firm Element.
  • The plan must cover investment features and associated risk factors, suitability and sales practices, as well as ethics and professional responsibility.

Regulatory Element
This is an industry-wide program that requires all registered persons to complete a specific computer-based training session on a set schedule. If the session is not completed within the required window of time, registration becomes inactive and the person is not permitted to conduct any securities business.

The training session must occur within 120 days of the registered person's second anniversary of initial registration, and then every three years thereafter. The Regulatory Element material is determined by the FINRA and is based on the type of registration the person holds.

Any registered person who has been continuously registered for more than 10 years (as of July 1, 1998) is exempt from the Regulatory Element, as long as they are not subject to FINRA disciplinary action.



Complaint Handling

Related Articles
  1. Personal Finance

    Keeping Up With Your Continuing Education

    Professional maintenance can be a chore. Learn how to streamline the process.
  2. Financial Advisor

    Should You Add A Securities License To Your Qualifications?

    Clients love planners who sell securities, but a securities license takes a lot of work. Learn if the stress and study are worth it.
  3. Financial Advisor

    Becoming A Registered Investment Advisor

    To become a registered investment advisor requires specific licensing, qualifications and regulations, but the greater freedom may be worth it.
  4. Financial Advisor

    SEC's CARDS Plan Creates Controversy for Brokers

    The securities industry isn't happy with the hand it may be dealt with the SEC's proposed CARDS rules.
  5. Financial Advisor

    Investigating The Securities Police

    Learn about the history of FINRA and how this organization protects investors.
  6. Financial Advisor

    Expect FINRA to Ask These Culture Questions

    This month, FINRA kicks off its culture examinations for brokerage firms. Here's how to cram for the test.
  7. Financial Advisor

    Who's Looking Out For Investors?

    If your account has been mishandled, FINRA and the SEC are among several organizations that can help.
  8. Financial Advisor

    Is Your Broker Legit? 6 Steps to Take

    The Great Recession may have ended, but broker wrongdoing hasn't. Here's how to make sure you don't get stuck with the next Bernie Madoff.
  9. Personal Finance

    How Education And Training Affect The Economy

    Economically successful countries hold competitive advantages over other economies in the global marketplace. Education and training are big reasons why.
  10. Financial Advisor

    Differences Between Stockbrokers, Investment Advisors And Financial Planners

    Find out how these three financial positions differ and in which areas they can help you with your finances.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center