FINRA Revised Continuing Education Rules to take Effect January 1, 2023
In November 2021, FINRA adopted changes to the Regulatory Element component of its Continuing Education (“CE”) rules which, in part, now requires registrants to complete annual CE as opposed to the previous three-year cycle.
As set forth in Regulatory Notice 21-41, FINRA amended rules 1210 and 1240, respectively.
The adoption of these revised rules is intended to train registered persons more effectively while also accommodating registered persons, particularly women and underrepresented minorities, that have taken time away from the industry.
The changes to Rules 1210 and 1240 provide for the following:
Eligible individuals who terminate any of their representative or principal registration categories have the option of maintaining their qualification for any terminated registration categories by completing annual CE through the new program, now known as the Maintaining Qualification Program (“MQP”);
Require registered persons to complete Regulatory Element CE (“RECE”) annually for each representative or principal registration category that they hold; and
Expressly allow firms to consider other required training toward satisfying an individual’s annual CE Firm Element and extend the Firm Element requirement to all registered persons.
The CE rule change requires that each registered person complete RECE annually by December 31 of each year that they are registered. Additionally, the rule amendment requires registered persons to complete RECE content for each registration or principal category that they hold. The training content that FINRA has developed is specific to each registration category. FINRA and the CE Council have agreed to publish the training topics by no later than October 1 of the prior year.
You may access the 2023 training topics and course descriptions here.
For those registrants that do not complete RECE within the prescribed annual deadline of December 31, they will automatically be designated as CE inactive by FINRA. FINRA may provide extensions for completion for good cause shown.
MQP
The changes involving MQP were effective March 15, 2022. The MQP allows registrants to maintain certain Series exams for five years as opposed to the previous two year time period as long as the registrant completes RECE. The eligibility conditions are as follows:
Individuals must have been registered in the terminated registration category for which they elect to maintain their qualification under the MQP for at least one year immediately prior to the termination of that category and must not have been subject to a statutory disqualification during that one-year registration period;
Individuals must make their election to participate in the MQP at the time of their Form U5 submission or within two years from the termination of a registration category;
Individuals must not have been subject to a statutory disqualification between the date of their Form U5 submission and the date they make their election to participate in the MQP;
Individuals must not have been CE inactive for two consecutive years at the time they make their election to participate in the MQP.
Participant Conditions:
MQP participants must complete annually by December 31 all prescribed CE content;
MQP participants will have a maximum of five years following the termination of a registration category in which to reregister without having to re-qualify by examination or having to obtain an examination waiver;
MQP participants who become subject to a statutory disqualification while they are participating in the MQP may not continue in the MQP;
MQP participants who become CE inactive for two consecutive years while they are participating in the MQP may not continue in the MQP; and
Pay the annual, $100 participation fee.
For additional details surrounding MQP, please consult FINRA Rules 1210 and 1240 and visit the MQP information page.
