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93-20 NASD and Other SROs Launch Continuing Education Effort for Member Firms


Senior Management
Legal & Compliance

Executive Summary

The NASD and five other securities industry self-regulatory organizations (SROs) have agreed to develop a single continuing education program for all securities industry registered representatives and principals. Furthermore, the NASD has agreed to remain flexible over the question of whether an assessment component should be included in any continuing education program. An 11-person task force will report back to the six SROs by mid-year with recommendations for implementing the program.


The NASD Board of Governors, which originally authorized its Membership Committee to develop a continuing education program in July 1991, also agreed to calls from SROs to approach with an open mind any findings of an industry-wide task force recently formed to detail such a plan. In a resolution approved in early January of this year, the Board agreed to "be flexible with regard to an assessment component being a requirement of the continuing education program and that the NASD will reserve final judgment on this matter pending receipt of the recommendations of an industry task force to be formed . . . ."

The 11-person industry task force met initially on March 15, 1993 in New York City to review information gathered by the SROs and to develop the continuing education program. By working together, the SROs hope to avoid multiple state or SRO continuing education requirements, which might create an inefficient and unnecessary burden on members. The members of the industry task force are: Mary Alice Brophy, First Vice President and Director of Compliance, Dain Bosworth Inc.; Ronald E. Buesinger, Corporate Secretary and Senior Vice President, A.G. Edwards & Sons, Inc.; Elena Dasaro, Compliance Official, H.C. Wainwright & Co., Inc.; Sheldon Goldfarb, Deputy General Counsel, Goldman Sachs; John P. Gualtieri, Vice President and Insurance Counsel, Prudential Insurance Company of America; Therese Haberle, Vice President, Fidelity Securities; Stephen Hammerman, Vice Chairman, Merrill Lynch, Pierce, Fenner & Smith, Inc.; James Harrod, General Principal, Investment Representative— Training and Development, Edward D. Jones & Co.; Todd A. Robinson, Chairman and CEO, Linsco/Private Ledger Corp.; Richard C. Romano, President, Romano Brothers & Co.; William R. Simmons, Senior Vice President and Associate National Sales Director, Dean Witter Reynolds, Inc.

Expected to submit an interim report to the SROs by mid-year, the task force represents a cross section of the securities industry and will solicit input from a wide range of members and other interested persons—including state regulators— through the North American Securities Administrators Association. When it reports back to the SROs, the task force is expected to:

  • Review already-developed information by SROs on continuing education.

  • Review the need for a continuing education program for securities industry professionals.

  • Review information on continuing education programs already under study by state securities regulators and consider state requirements in the design and implementation of any such SRO program for the securities industry.

  • Define the nature and scope of any such continuing education program for securities industry professionals.

  • Determine the appropriateness of adding an assessment for such a program.

  • Develop an action plan for designing and implementing such a program.

Because of the complexity of today's products and markets, the SROs—including the New York Stock Exchange, American Stock Exchange, Philadelphia Stock Exchange, Chicago Board Options Exchange, and the Municipal Securities Rulemaking Board— agreed that there may be a need for a formal, industry-wide continuing education program to keep industry professionals up to date on products, markets, and rules while ensuring investor confidence in the securities industry.

Original Recommendations

The NASD Board of Governors in July 1991 originally authorized the NASD Membership Committee to develop a continuing education program for registered personnel that included either an in-house, NASD-approved assessment capability at individual firms or a required periodic assessment by the NASD.

Notice to Members 91-50 in August 1991 explained the NASD view that SROs should take the lead in increasing standards of professionalism as financial markets become increasingly complex. Traditional continuing education programs, according to the NASD Qualifications Standards Subcommittee, were rejected because they merely measure attendance rather than performance and fail to recognize the differing abilities needed within the securities industry.

The Membership Committee reported back to the Board of Governors in November 1991 its recommendations regarding the structure of the Continuing Education and Assessment Program. Besides determining that all representatives and principals should fall under the program, the Committee determined that any continuing education program should include some sort of assessment capability.

Members wishing to comment on any aspect of the continuing education programs may contact the NASD Qualifications & Membership Department at (301) 590-6693.

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