FINRA'S Continuing Education (CE) Program Transformation

By Julie S. Mendel, SILA-A, CDEI
Nov 18, 2021
FINRA'S Continuing Education (CE) Program Transformation

FINRA has published Regulatory Notice 21-41 regarding the Continuing Education Program Transformation. This program affects FINRA Rules 1210 and 1240, and specifically addresses the following three elements:

  1. Transitions the Regulatory Element to an annual requirement
  2. Extends Firm Element to all registered persons and allows firms to include other required training as part of the firm element program
  3. Establishes the Maintaining Qualifications Program (MQP)

Regulatory Element Transition to Annual Requirement

The amendment to FINRA rules 1210 and 1240, as discussed in Regulatory Notice 21-41 go into effect January 1, 2023. Under the amended rules, registered persons are required to complete the Regulatory Element annually for each representative or principal registration they hold. Individuals who do not complete the Regulatory Element by December 31 of each year will be designated CE inactive by FINRA.

The content of the Regulatory Element will be tailored to be specific to each registration category and FINRA and the CE Council will publish the topics to be covered in the Regulatory Element by October 1 of the prior year.

Firm Element Extension

Effective January 1, 2023 the firm element requirement will be extended to all registered persons, including those who hold a permissive registration. The rule amendment allows firms to incorporate additional training in the firm element program such as anti-money laundering (AML) and the annual compliance meeting (ACM). The notice further states that training must cover topics specific to each individual’s role, activities, and professional responsibility.

Maintaining Qualifications Program (MQP)

FINRA’s new Maintenance of Qualification After Termination of Registration Program (MQP) goes into effect March 15, 2022. It provides eligible individuals with the option of extending their qualification for a terminated registration from a two-year qualification period to up to five years through this program.

The amended rule requires those who opt-in to complete continuing education requirements annually. The continuing education will be a combination of Regulatory Element and Practical Element as determined by FINRA and the CE Council. The notice further details eligibility and participation requirements. Eligible participants must use FINRA’s Financial Professional Gateway (FinPro®) to notify FINRA of their election to participate in the MQP. (See FINRA Regulatory Notice 21-41.)

FINRA CE Transformation Frequently Asked Questions

FINRA has published a Frequently Asked Questions (FAQs) page on their website. These FAQs specifically address Regulatory Element, Firm Element and the MQP. We anticipate these FAQs will be updated as new questions arise and guidance is published.

In summary, the key dates you need to keep in mind are:

  • March 15, 2022 – implementation date for the Maintaining Qualifications Program
  • January 1, 2023 – implementation date for the Regulatory Element to transition to an annual requirement
  • January 1, 2023 – implementation date for the firm element to be extended to all registered persons and incorporating AML and ACM into the annual requirement.

FINRA will continue to enhance their systems relating to notifications, management, and tracking of CE requirements.