Series 99

AAA

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
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