Continuing Education
FINRA, in conjunction with other self-regulatory organizations and the Securities Industry/Regulatory Council on Continuing Education, administers a two-part mandatory Continuing Education Program. The program consists of a Regulatory Element and a Firm Element. The Regulatory Element requires all registered persons to take computer-based training in industry rules and regulations, on the second anniversary of their initial securities registration and every three years thereafter. The Firm Element requires broker-dealers to keep their "covered persons" – employees who deal with customers, and their supervisors – up to date on job- and product-related subjects by way of an annual firm-developed and administered training program.
On February 8, 1995, the Securities and Exchange Commission (SEC) approved NASD Membership and Registration Rule 1120 that prescribes requirements for the Securities Industry Continuing Education Program. The Continuing Education Program has two elements – a Regulatory Element and a Firm Element. NASD Rule 1120 became effective July 1, 1995.
The Regulatory Element requires all registered individuals complete a computer-based training program within 120 days of their second anniversary of their registration approval date and every three years thereafter.
The Firm Element requires that broker-dealers establish a formal training program to keep employees up to date on job- and product-related subjects. In planning, developing and implementing the Firm Element, each broker-dealer must consider its size, structure, scope of business and regulatory concerns.
The Regulatory Element is a computer-based training program that focuses on compliance, regulatory, ethical and sales practice standards. Its content is derived from rules and regulations, as well as standards and practices widely accepted within the industry. The Regulatory Element Programs have been specifically developed for registered Supervisors/Principals (S201), Series 6 Investment Company Products/Variable Contracts Representatives (S106) in addition to the General Program (S101) for individuals in other registrations categories not covered by the Supervisor and Series 6 Programs.
The S201 Supervisor/Principal Regulatory Element program does not have a formal content outline. The program is designed to draw on the experience of the supervisor/principal involving such topics as supervision, suitability, insider trading, money laundering and interviewing and hiring.
The Regulatory Element is available through two professional testing center networks:
FINRA publishes the Securities Industry Regulatory Council’s annual Firm Element Advisory. The Firm Element Advisory identifies and recommends pertinent regulation and sales practice issues for firms for possible inclusion in their Firm Element training plans.
For more information on the Securities Industry Continuing Education Program, please visit the Web site of the Securities Industry/Regulatory Council on Continuing Education (Council). The Council Web site contains a wide range of continuing education information, including training materials and publications.
Questions regarding NASD Rule 1120 and the Continuing Education Program may be directed to the Gateway Call Center at 301-590-6500.
