Chapter 3: General Supervision - B. Continuing Education and Regulatory Element

Continuing Education

Most registered agents and principals are required to participate in industry mandated continuing education programs. The continuing education program consists of a firm element, which is administered by the broker dealer, and a regulatory element, which is administered by the regulators.

Firm Element Continuing Education

Every FINRA member firm at least annually must identify the training needs of its covered employees and develop a written training plan based on their employees’ needs. A covered employee is a registered person who engages in sales of securities to customers, trading, investment banking and their immediate supervisors. The firm, at a minimum, should institute a plan that increases the covered employees’ securities knowledge and should focus on the products offered by the firm. The plan should also highlight the risks and suitability requirements associated with the firm’s investment products and strategies. The firm is not required to file their continuing education plan with FINRA unless it is specifically requested to do so. However, firms who fail to adequately document their continuing education program, including their covered agents’ compliance with the program, may be subject to disciplinary action.

Regulatory Element

All registered agents who were not registered on or before July 1, 1988 must participate in the regulatory element of the continuing education requirement. Agents subject to the requirement must complete the computer based training at an approved facility on the second anniversary of their initial registration and every three years thereafter. The content of the exam is developed by The Securities Industry Regulatory Council on Continuing Education and is not the responsibility of the broker dealer. FINRA will notify the agent 30 days prior to their anniversary date. This notification provides the agent with 120-day window to complete the regulatory continuing education requirement. An Agent who fails to complete the requirement within that period will have their registration become inactive. Agents whose registrations have become inactive may not engage in any securities business that requires a license and may not receive commissions until their registration is reactivated. Registered representatives are subject to series 101 of the regulatory element, while registered principals are subject to series 201 of the requirement. Agents, who were exempt from the regulatory element as a result of having been registered for 10 years or more with a clean disciplinary history on July 1, 1998, who become the subject of a significant disciplinary action, will now be required to participate in the regulatory element of the continuing education requirement. Addition­ally, if an agent who was exempt from the regulatory element subsequently becomes registered as a principal, they will become subject to the series 201 requirement. The one-time exemption is only for the regulatory element; there is no exemption from the firm element of the continuing education program.

Information Obtained From an Issuer

If a broker dealer obtains information during the performance of duties to an issuer of securities it may not use that information to solicit business. A broker dealer may obtain information from an issuer while acting as:

  • An underwriter
  • A transfer agent
  • A paying agent
  • An investment banker
C. Customer Complaints and Office Registry
Related Articles
  1. Personal Finance

    Introduction To Financial Planning Organizations

    Organizations such as the FPA and NAPFA are striving to provide higher standards for the financial planning profession and greater protection for consumers through a combination of community ...
  2. Professionals

    Key Steps To Building A Great Financial Planning Practice

    Following the status quo will kill your financial practice. Find out the tips you need to follow to keep you a step or two ahead of the competition.
  3. Professionals

    A Day In The Life Of An Economist

    We've interviewed three economists with very different job descriptions to give you an idea of the many possibilities this career choice offers.
  4. Professionals

    The Best Training Programs For CFP Exams

    The competition to become a financial planner is hot, and growing hotter. Find out the best way to preparing to land the CFP designation.
  5. Professionals

    The Claritas Investment Certificate: A New Foundation-Level Program From The CFA Institute

    The Claritas Investment Certificate is likely to find growing acceptance as the new foundation-level education and ethics standard for the financial service sector internationally.
  6. Professionals


    CFP Exam Guide
  7. Retirement

    Why Some Celebs Say 'No Inheritance for My Kids'

    To some of the super rich, inherited wealth is not the ultimate gift, it's a burden. Here's how their children—as well as charities—stand to benefit.
  8. Professionals

    Social Security COLA in 2016? Not Likely

    A cost of living increase for Social Security doesn't look likely in 2016. Here's what retirees should know and what they can do about it.
  9. Professionals

    This Group is the Most Underprepared to Retire

    More than any other demographic, this group is woefully underprepared for retirement. Here's what they can do to change that.
  10. Professionals

    Advisors: Why Older Clients Need Housing Help

    When was the last time you talked to your clients about housing in retirement?
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin ...
  2. Series 6

    A securities license entitling the holder to register as a limited ...
  3. Open Architecture

    The option offered by an investment firm to let its clients invest ...
  4. Advanced Diploma In Insurance

    A qualification earned by insurance professionals and conferred ...
  5. Associate In Personal Insurance ...

    A designation earned by professionals looking for training in ...
  6. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  1. What licenses does a hedge fund manager need to have?

    A hedge fund manager does not necessarily need any specific license to operate a fund, but depending on the type of investments ... Read Full Answer >>
  2. Is a financial advisor allowed to pay a referral fee?

    A financial advisor is allowed to pay a referral fee to a third party for soliciting clients. However, the Securities and ... Read Full Answer >>
  3. Do financial advisors get paid by mutual funds?

    Financial advisors are reimbursed by mutual funds in exchange for the investment and financial advice they provide. A financial ... Read Full Answer >>
  4. Do financial advisors prepare tax returns for clients?

    Financial advisors engage in a wide variety of financial areas, including tax return preparation and tax planning for their ... Read Full Answer >>
  5. Why is fiduciary duty so important?

    Fiduciary duty is one the most important professional obligations. It basically provides a much-needed protection for individuals ... Read Full Answer >>
  6. Do financial advisors have to find their own clients?

    Nearly all financial advisors, particularly when new to the field, have to find their own clients. An employer may provide ... Read Full Answer >>
Hot Definitions
  1. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  2. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  3. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  4. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  5. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  6. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!