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Rule 345A Continuing Education for Registered Persons
(a) REGULATORY ELEMENT
/01 Registration Date
Registered persons are required to participate in the Regulatory Element on three occasions, based on their initial registration anniversary date. Initial registration means the first date that the person became registered with the NYSE, NASD or another self-regulatory organization, regardless of subsequent registrations, provided that the person has remained continuously registered since that initial date.
A person's initial registration date is the date that the registration was originally approved rather than the date the person passed a qualification examination. This includes registered persons who have received waivers from specific examination requirements.
Registered persons are required to participate in the Regulatory Element on three occasions, based on their initial registration anniversary date. Initial registration means the first date that the person became registered with the NYSE, NASD or another self-regulatory organization, regardless of subsequent registrations, provided that the person has remained continuously registered since that initial date.
A person's initial registration date is the date that the registration was originally approved rather than the date the person passed a qualification examination. This includes registered persons who have received waivers from specific examination requirements.
/02 Application
The requirements of the Regulatory Element apply to all persons registered or required to be registered under Exchange rules, even if such persons are not required to be qualified by taking and passing an examination e.g., certain principal executives and securities lending representatives.
The requirements of the Regulatory Element apply to all persons registered or required to be registered under Exchange rules, even if such persons are not required to be qualified by taking and passing an examination e.g., certain principal executives and securities lending representatives.
/03 Firm Delivery of Regulatory Element
Member organizations will be permitted to administer the Regulatory Element continuing education program to their registered persons by instituting a firm program acceptable to the Exchange.
The following procedures are required:
Member organizations will be permitted to administer the Regulatory Element continuing education program to their registered persons by instituting a firm program acceptable to the Exchange.
The following procedures are required:
A. Senior Officer or Partner In-Charge
• The member organization has designated a senior officer or partner to be responsible for the firm's delivery of the Regulatory Element continuing education program.
B. Site Requirements
• The location of all delivery sites will be under the control of the member organization.
• Delivery of Regulatory Element continuing education will take place in an environment conducive to training. (Examples: a training facility, conference room or other area dedicated to this purpose would be appropriate. Inappropriate locations would include a personal office or any location that is not or cannot be secured from traffic and interruptions).
• Where multiple delivery terminals are placed in a room, adequate separation between terminals will be maintained.
C. Technology Requirements
• The communication links and member organization delivery computer hardware must comply with standards defined by the Exchange or its designated vendor.
D. Supervision
• The member organization's Written Supervisory Procedures must contain the procedures implemented to comply with the requirements of its delivery of Regulatory Element continuing education.
• The member organization's Written Supervisory Procedures must identify the senior officer or partner designated pursuant to 03/A and contain a list of individuals authorized by the firm to serve as proctors.
• Member organization locations for delivery of Regulatory Element continuing education will be specifically listed in the member organization's Written Supervisory Procedures.
E. Proctors
• All sessions will be proctored by an authorized person during the entire Regulatory Element continuing education session. Proctors must be present in the session room or must be able to view the person(s) sitting for Regulatory Element continuing education through a window or by video monitor.
• The individual responsible for proctoring at each administration will sign a certification that required procedures have been followed, that no material from Regulatory Element continuing education has been reproduced, and that no candidate received any assistance to complete the session. Such certification may be a part of the sign-in log required under F. Administration.
• Individuals serving as proctors must be persons registered with an SRO and supervised by the designated senior officer/partner for purposes of firm delivery of the Regulatory Element continuing education.
• Proctors will check and verify the identification of all individuals taking Regulatory Element continuing education.
F. Administration
• All appointments will be scheduled in advance using the procedures and software specified by the Exchange, its agent or designated vendor to communicate with the PROCTOR system and CRD.
• The firm/proctor will conduct each session in accordance with the administrative and appointment scheduling procedures required by the Exchange or its designated vendor.
• A sign-in log will be maintained at the delivery facility. Logs will contain the date of each session, the name and social security number of the individual taking the session, confirmation that required identification was checked, the sign-in time, the sign-out time and the name of the individual proctoring the session. Such logs are required to be retained pursuant to SEA Rule 17a-4.
• No material will be permitted to be utilized for the session nor may any session-related material be removed.
• Delivery sites will be made available for inspection by the SROs.
Before commencing firm delivery of Regulatory Element continuing education, member organizations are required to file with their Designated Examining Authority ("DEA"), a letter of attestation (as specified below) signed by a senior officer or partner attesting to the establishment of required procedures addressing senior officer/partner in-charge, supervision, site, technology, proctors and administrative requirements.
The letter of attestation shall be read substantially as follows:
[Name of member organization] has established procedures for delivering Regulatory Element continuing education on its premises. I have determined that these procedures are reasonably designed to comply with SRO requirements pertaining to firm delivery of Regulatory Element continuing education including that such procedures have been implemented to comply with senior officer/partner in-charge, supervision, site, technology, proctors and administrative requirements.
_____________________
Signature
_____________________
Printed Name
_____________________
Title [Must be signed by a Senior Officer/Partner of the member organization.]
_____________________
Date
The letter of attestation shall be read substantially as follows:
[Name of member organization] has established procedures for delivering Regulatory Element continuing education on its premises. I have determined that these procedures are reasonably designed to comply with SRO requirements pertaining to firm delivery of Regulatory Element continuing education including that such procedures have been implemented to comply with senior officer/partner in-charge, supervision, site, technology, proctors and administrative requirements.
_____________________
Signature
_____________________
Printed Name
_____________________
Title [Must be signed by a Senior Officer/Partner of the member organization.]
_____________________
Date
G. Annual Representation
Each member organization will be required to represent to the Exchange, annually, that they have continued to maintain, and reasonably believe that they have complied with, all required procedures outlined in sections A through F of this interpretation for the previous year. Such attestation must be signed by a senior officer or partner.
Each member organization will be required to represent to the Exchange, annually, that they have continued to maintain, and reasonably believe that they have complied with, all required procedures outlined in sections A through F of this interpretation for the previous year. Such attestation must be signed by a senior officer or partner.
H. Definition of Senior Officer or Partner
For purposes of interpretation /03, a "senior officer or partner" means the chief executive officer or managing partner or either (A) any other officer or partner who is a member of the member organization's executive or management committee or its equivalent committee or group or (B) if the member organization has no such committee or group, any officer or partner having senior executive or management responsibility who reports directly to the chief executive officer or managing partner. If, in the case of a member organization, its chief executive officer or managing partner does not sign the attestation, a copy of the attestation shall be provided to the chief executive officer or managing partner.
For purposes of interpretation /03, a "senior officer or partner" means the chief executive officer or managing partner or either (A) any other officer or partner who is a member of the member organization's executive or management committee or its equivalent committee or group or (B) if the member organization has no such committee or group, any officer or partner having senior executive or management responsibility who reports directly to the chief executive officer or managing partner. If, in the case of a member organization, its chief executive officer or managing partner does not sign the attestation, a copy of the attestation shall be provided to the chief executive officer or managing partner.
/04 Registration Lapses
A person whose registration lapsed for less than two years and who seeks to be reregistered will be required to participate in the Regulatory Element to cover any occasion that was missed during the period in which the person was unregistered, based on such person's initial registration date. If any such person has been unregistered for more than two years, then such person would be a new registrant and required to satisfy appropriate qualifying examination requirements and satisfy the requirements of the Regulatory Element based on the new initial registration anniversary date.
A person whose registration lapsed for less than two years and who seeks to be reregistered will be required to participate in the Regulatory Element to cover any occasion that was missed during the period in which the person was unregistered, based on such person's initial registration date. If any such person has been unregistered for more than two years, then such person would be a new registrant and required to satisfy appropriate qualifying examination requirements and satisfy the requirements of the Regulatory Element based on the new initial registration anniversary date.
/05 CRD Notification
Member organizations will be notified by the Central Registration Depository ("CRD") concerning those registered persons in the CRD system whose registration anniversary dates trigger participation in the Regulatory Element computer-based training.
Even though notification will be provided by CRD as a courtesy, the final responsibility to ensure timely participation in and completion of the Regulatory Element as required is that of member organizations and registered personnel themselves.
Member organizations and personnel who receive such notices from the CRD but would otherwise be exempt from the requirements of the Regulatory Element because their business is limited solely to the transaction of business on the Floor with registered broker-dealers must contact the Exchange's Qualifications and Registrations Department to confirm that they are (by definition) exempt from the Regulatory Element. However, any such persons who do not conduct public business on the Floor, but maintain a registration (e.g. Series 7 or 7A) that would enable them to conduct a public business, must satisfy the Regulatory Element requirements in order for their registration to remain active.
Member organizations will be notified by the Central Registration Depository ("CRD") concerning those registered persons in the CRD system whose registration anniversary dates trigger participation in the Regulatory Element computer-based training.
Even though notification will be provided by CRD as a courtesy, the final responsibility to ensure timely participation in and completion of the Regulatory Element as required is that of member organizations and registered personnel themselves.
Member organizations and personnel who receive such notices from the CRD but would otherwise be exempt from the requirements of the Regulatory Element because their business is limited solely to the transaction of business on the Floor with registered broker-dealers must contact the Exchange's Qualifications and Registrations Department to confirm that they are (by definition) exempt from the Regulatory Element. However, any such persons who do not conduct public business on the Floor, but maintain a registration (e.g. Series 7 or 7A) that would enable them to conduct a public business, must satisfy the Regulatory Element requirements in order for their registration to remain active.
(a)
(2)
/01 Failure to Complete
Any person whose registration has been deemed inactive due to failure to complete the Regulatory Element within prescribed time frames is prohibited from performing any functions or duties as a registered person. Such person may not accept or solicit business or perform any functions related thereto or receive commissions for the purchase or sale of securities, except for trail or residual commissions resulting from transactions completed before the inactive status. Persons deemed inactive may not engage in any activity requiring registration and member organizations must ensure that, where appropriate, such persons' duties and responsibilities are otherwise performed e.g., a member organization whose financial/operations principal's or compliance official's registration has been deemed inactive must designate another qualified person to exercise such duties and responsibilities.
Any person whose registration has been deemed inactive due to failure to complete the Regulatory Element within prescribed time frames is prohibited from performing any functions or duties as a registered person. Such person may not accept or solicit business or perform any functions related thereto or receive commissions for the purchase or sale of securities, except for trail or residual commissions resulting from transactions completed before the inactive status. Persons deemed inactive may not engage in any activity requiring registration and member organizations must ensure that, where appropriate, such persons' duties and responsibilities are otherwise performed e.g., a member organization whose financial/operations principal's or compliance official's registration has been deemed inactive must designate another qualified person to exercise such duties and responsibilities.
(a)
(3)
/01 Re-entry into the Program
Re-entry into the Regulatory Element is triggered by the occurrence of specified disciplinary events. The effective date of a disciplinary action requiring re-entry into the program is the date upon which such action becomes final and conclusive i.e., expiration of the time period allowed to appeal or request review of the action (see Exchange Rule 476(g)) or, if the matter is appealed or reviewed, the date a decision on the appeal or review is issued.
Re-entry into the Regulatory Element is triggered by the occurrence of specified disciplinary events. The effective date of a disciplinary action requiring re-entry into the program is the date upon which such action becomes final and conclusive i.e., expiration of the time period allowed to appeal or request review of the action (see Exchange Rule 476(g)) or, if the matter is appealed or reviewed, the date a decision on the appeal or review is issued.
(b) FIRM ELEMENT
(1)
/01 Persons Subject to Firm Element
The Firm Element applies to each member organization and its covered registered persons. Such covered persons include salespeople, traders, investment bankers and others who conduct a securities business with public customers, and their immediate supervisors, as well as research analysts and supervisory analysts. Some examples of covered persons are set forth below.
The Firm Element applies to each member organization and its covered registered persons. Such covered persons include salespeople, traders, investment bankers and others who conduct a securities business with public customers, and their immediate supervisors, as well as research analysts and supervisory analysts. Some examples of covered persons are set forth below.
• Sales Trader with direct customer (non-broker-dealer) contact.
• Investment Banker who solicits new business, contacts customers or prospective customers in an advisory capacity or participates in sales presentations.
• Market personnel or other persons who give presentations to customers.
The immediate supervisors of the above persons are also covered persons.
Examples of those who are not covered persons are:
Examples of those who are not covered persons are:
• Sales Trader dealing only with broker-dealer personnel.
• Investment Bank employee who performs analytical work with no customer contact.
• Marketing Personnel who design and develop sales literature but do not make sales presentations.
Additionally, persons whose sole customer contact is in dealing with customers or responding to customer inquiries on administrative or operations-type matters will not be covered persons under the Firm Element.
(b)
(2)
(i) Needs Assessment and Written Training Plan
/01 Needs Assessment
The required annual needs analysis, which forms the basis for establishing a firm's training priorities and development of a written training plan, and the written training plan itself, are not required to be submitted to the Exchange for review or approval. However, such assessment and training plan shall be made available by members and member organizations for review by the Exchange upon request.
The required annual needs analysis, which forms the basis for establishing a firm's training priorities and development of a written training plan, and the written training plan itself, are not required to be submitted to the Exchange for review or approval. However, such assessment and training plan shall be made available by members and member organizations for review by the Exchange upon request.
/02 Security Futures Contracts
A. General Securities Registered Representatives
A covered person may engage in sales activity related to Security Futures Contracts after completing, prior to December 31, 2006, a Firm Element continuing education program that provides adequate knowledge of, and proficiency in, Security Futures Contracts.
A covered person may engage in sales activity related to Security Futures Contracts after completing, prior to December 31, 2006, a Firm Element continuing education program that provides adequate knowledge of, and proficiency in, Security Futures Contracts.
B. General Securities Sales Supervisor
A covered person otherwise qualified to supervise securities sales activity will qualify to supervise Security Futures Contracts after completing, prior to December 31, 2006, a Firm Element continuing education program that provides adequate knowledge of, and proficiency in, the supervision of Security Futures Contracts.
A covered person otherwise qualified to supervise securities sales activity will qualify to supervise Security Futures Contracts after completing, prior to December 31, 2006, a Firm Element continuing education program that provides adequate knowledge of, and proficiency in, the supervision of Security Futures Contracts.
C. Content Outline — Minimum Requirements
Minimum Firm Element continuing education program requirements pursuant to A and B above are set forth in the Securities Futures Contracts Content Outline.
Minimum Firm Element continuing education program requirements pursuant to A and B above are set forth in the Securities Futures Contracts Content Outline.
D. Qualification Examinations
Persons not qualified as a General Securities Registered Representative prior to the implementation of a Security Futures Qualification Examination will be required to pass such examination in order to engage in or supervise Security Futures Contracts activity. Persons qualified as General Securities Representatives prior to the time a qualification examination is implemented may, prior to December 31, 2006, complete a Firm Element continuing education program in lieu of passing the qualification examination.
Persons not qualified as a General Securities Registered Representative prior to the implementation of a Security Futures Qualification Examination will be required to pass such examination in order to engage in or supervise Security Futures Contracts activity. Persons qualified as General Securities Representatives prior to the time a qualification examination is implemented may, prior to December 31, 2006, complete a Firm Element continuing education program in lieu of passing the qualification examination.
(c) GENERAL STANDARDS
/01 Registered Persons Outside United States
The Regulatory Element covers all registered persons and the Firm Element applies to all registered persons who deal with public customers, including those persons domiciled abroad (i.e., outside U.S.). This includes foreign branch office registered personnel and those employees of non-U.S. registered subsidiaries who are approved by the Exchange as registered representatives of the parent member organization pursuant to Exchange Rule 321.15.
The Regulatory Element covers all registered persons and the Firm Element applies to all registered persons who deal with public customers, including those persons domiciled abroad (i.e., outside U.S.). This includes foreign branch office registered personnel and those employees of non-U.S. registered subsidiaries who are approved by the Exchange as registered representatives of the parent member organization pursuant to Exchange Rule 321.15.
/02 Maintenance of Records
Records relating to the Continuing Education Program will be required to be maintained in accordance with the recordkeeping requirements of SEA Rule 17a-4. Generally, member organizations are required to maintain records relating to Continuing Education requirements for a minimum of three years, with the first two years in an easily accessible place.
Records relating to the Continuing Education Program will be required to be maintained in accordance with the recordkeeping requirements of SEA Rule 17a-4. Generally, member organizations are required to maintain records relating to Continuing Education requirements for a minimum of three years, with the first two years in an easily accessible place.
/03 Supervisory Procedures
A member organization shall maintain written supervisory procedures (see Interpretation /02 to Rule 342.16) which shall include a delineation of the responsibility for and supervision of the Regulatory and Firm Element requirements.
A member organization shall maintain written supervisory procedures (see Interpretation /02 to Rule 342.16) which shall include a delineation of the responsibility for and supervision of the Regulatory and Firm Element requirements.
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Amendment. Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008. Selected Notice: 08-64. |
