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94-32 SEC Chairman Endorses Periodic Training Of All Registered Personnel


Senior Management
Legal & Compliance

In 1993, the American Stock Exchange (Amex), the Chicago Board Options Exchange (CBOE), the Municipal Securities Rulemaking Board (MSRB), the National Association of Securities Dealers, Inc. (NASD), the New York Stock Exchange (NYSE), and the Philadelphia Stock Exchange (PHLX), endorsed the Report and Recommendations of the Securities Industry Task Force on Continuing Education. The Task Force report, which had input from the North American Securities Administrators Association (NASAA), called for a formal, two-part continuing education program for securities industry professionals that would require uniform training in regulatory matters and ongoing programs by firms to keep employees up-to-date on job-specific subjects.

The report also recommended creation of a permanent Industry/ Regulatory Council on Continuing Education (Council) to determine the specific content of the uniform regulatory component and to mandate specific minimum core curricula for inclusion in appropriate segments of ongoing firm-training programs. The Task Force recommended further that computer-based training be used as a primary vehicle for the uniform regulatory component of the program. The Council has met monthly in 1994 to define further the requirements of the continuing education program. It now expects to submit rule proposals to the self-regulatory organizations for publication and member comment in the summer of 1994.

The Honorable Arthur Levitt, Chairman of the Securities and Exchange Commission, has been very supportive of the Council's efforts and has expressed a strong interest in the rapid development of an effective program. He has met with the Council or its representatives on a number of occasions and has designated senior SEC staff members to work with the Council. Chairman Levitt also sent the following letter expressing his commitment to mandatory continuing education to the CEOs of members having the largest number of registered persons.





To the Chief Executive Officer:

I am writing to you regarding an issue that I consider worthy of your attention and time: the continuing education of securities professionals. I believe we must proceed very quickly to develop and implement an industry-wide program that provides for the periodic training of all registered personnel. To realize this goal, it will be necessary for all firms to commit themselves to the development of a workable program.

In May 1993, the securities industry self-regulatory organizations (SROs) created a Task Force representing a cross-section of broker-dealer firms to study the issue of continuing education and develop recommendations. With the benefit of input from the SROs and the North American Securities Administrators Association, the Task Force issued its report in September 1993. To accommodate the divergent needs of individual firms, the Task Force's principal recommendation is to establish a program that has both a "Firm" and a "Regulatory" element. As proposed, the Firm element would mandate that each broker-dealer provide annual continuing education on its products and services to all its registered producing personnel who are in sales, trading, and investment banking, and their first line supervisors. The Regulatory element would require all registered personnel to receive training in compliance, regulatory, ethics and sales practice issues.

I urge you to take whatever steps necessary to ensure that your firm stays apprised of the work being pursued by the Industry/Regulatory Council on Continuing Education, the successor to the Task Force. You may obtain the report of the Task Force and more information about the timetable for implementation of a continuing education program by contacting William R. Simmons, Executive Vice President, Dean Witter Reynolds, Inc, at 212/392-3767; Ray Vass, First Vice President, Merrill Lynch, Pierce, Fenner & Smith, Inc, at 212/449-2539; or Ronald E. Buesinger, Corporate Secretary and Senior Vice President (retired), A.G. Edwards & Sons, Inc, at 314/289-3773.

I appreciate your involvement in and support of mandatory continuing education. Prompt implementation of this initiative should be one of the industry's highest priorities as it seeks to reinforce investor confidence in the U.S. capital markets through ensuring the highest level of integrity and competence among securities professionals.


Arthur Levitt

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