It’s Not Too Late To Be In CE Compliance
by Warren Forest
You only have one month left! That’s right, there are just thirty days for you to complete your “Firm Element” continuing education (CE) sessions.
BD University, located at http://brokerdealerplace.com/bdp/continuing-ed, can help you accomplish this. Our CE platform has recently been upgraded to provide hundreds of relevant classes. It is affordable, user-friendly, customizable, and FINRA compliant.
Ongoing education is vital to every profession. Due to the complexities of the brokerage industry, CE is particularly involved. One of the reasons is that member firms face at least three layers of regulation, the U.S. Securities & Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the individual state securities administrators, and all of these regulators required a uniform standard that was acceptable to all parties.
A second reason is that while there exists situations common to all registered representatives and Broker/Dealers, each Broker/Dealer is unique unto its own, and has specific needs that must be satisfied. In 1995, the NASD, now known as FINRA, initiated Conduct Rule 1120, which made CE mandatory. The regulators and member firms took the cue and created a uniform standard applicable to all registered members of the profession, known as the Regulatory Element. However, they also created another CE system which required each firm to develop and design a unique specific training program, known as the Firm Element.
The Regulatory Element is administered by FINRA, and affects only registered persons. Firms need only insure that their reps participate in computer generated Regulatory Element sessions at the required time intervals.
The Firm Element, however, is designed and administered by each FINRA Member Firm. What makes the Firm Element daunting is that FINRA does not inform its members just how they should design a Firm Element Program, nor do they let them know how frequently they must hold their sessions.
But rest assured, if the Firm Element is not done properly, or as often as the regulators deem fit, a member firm may be subject to adverse regulatory actions. This could translate into fines, sanctions, or even suspensions from the business.
A Firm Element Program must be designed to take into account the specific educational needs of each broker/dealer. In order to accomplish this management must annually complete a ‘Needs Analysis’ that serves to outline the Firm Element Program for the current year.
The Firm Element introduced a new concept called a ‘covered person’. This is any person, whether they are registered or not, that has contact with the investing public. All covered persons must attend Firm Element training sessions. Therefore, a non-registered receptionist has to participate in these sessions, while a registered trader, who has no public contact, is Firm Element CE exempt, and does not have to attend any sessions.
Registered Representatives may view the Firm and Regulatory Elements as a necessary evil, or just another compliance burden. CE is mandatory, but every registered rep should view this requirement in a positive light. After all, you would not want to entrust your physical health to a professional who had out-of-date skills. Your clients’ financial health is equally as important as their physical health. By staying informed and educated with current knowledge, as a financial professional, you will keep your clients financially healthy, which should lead to increased sales, production, and professional satisfaction for you.
If you have not done anything about your Firm Element CE, it is not too late. Simply contact Broker Dealer Place at 407-774-2000, to set up your CE program, and stay compliant. BD University offers a comprehensive product that lifts the Firm Element burden entirely. Member firms and registered reps can utilize BD University’s tools to create a ‘Needs Analysis’ and Firm Element program that will both satisfy the regulators and effectively educate covered persons.
Posted by: editor November 30, 2011