The Ides of March brought a meaningful change for the registered representative community – the launch of the Maintaining Qualifications Program, or MQP. As FINRA announced in Regulatory Notice 21-41, under the changes to Rule 1240(c), those who terminate any representative or principal registration category on or after March 15 may elect to enter the MQP and have up to five years to reregister without having to requalify by exam or obtain an examination waiver. Prior to these changes, an individual had up to two years. While I would not characterize the examination waiver process as being adversarial – I have helped several individuals obtain waivers – FINRA has made a positive step in accommodating the registered community, especially in these changing times.
There are a couple of important caveats. First, this does not apply to the state-level registrations, the Series 63, 65 or 66. These have not been eligible for the current waiver process and are not subject to the MQP. Second, registered individuals must meet certain conditions, including election to enter the MQP within two years of termination and completion of continuing education (CE) each year through his or her FINRA FinPro account.
In conjunction with the Maintaining Qualifications Program, FINRA announced other changes to its CE program that go effective on January 1, 2023. Chief among them is that registered individuals must complete the Regulatory Element by December 31 each year. Currently, one must complete the Regulatory Element by the second anniversary of his or her registration and every three years thereafter. In addition, FINRA will expressly allow firms to count any training it conducts for its AML program (see Rule 3310(e)) and its Annual Compliance Meeting (see Rule 3110(a)(7)) towards the Firm Element portion of CE.
This presents broker-dealers an opportunity to re-evaluate how they recruit and train their representatives. Please contact me if you would like to discuss these amendments.
Thank you for reading this post. Please know that I wrote it for informational purposes only (some may consider it ADVERTISING MATERIAL) and did not intend for it to be legal advice or to form an attorney-client relationship with you – especially in jurisdictions where I am not licensed to practice law. I encourage you to seek your own counsel to help you with your specific situation. To that end, I invite you to contact me if you would like to discuss my services
Ryan Smith is a partner of Practus, LLP and based in the Washington, D.C. area. His practice focuses on helping broker-dealers, registered investment advisers and their associates address a wide range of legal and compliance issues.