Registered representatives who leave the financial industry and want to return without taking a qualification exam would have to pay an annual fee under a proposal the Finra board recently approved.
Under a recent Financial Industry Regulatory Authority Inc. rule change, reps who terminate their Finra registration can reregister over a five-year period by fulfilling continuing education requirements. Previously, reps would have to sit again for qualifying exams, such as the Series 7, after two years away from the industry.
At its meeting on Sept. 23-24, the Finra board approved a proposal to establish a $100 annual fee that would allow reps to take advantage of a wider reregistration window. The SEC has to approve the proposal before it goes into effect.
The fee and the CE requirements are an easier lift than retaking a qualifying exam, said Brian Marks, president of Knopman Marks Financial Training. Credit for continuing education can be obtained by doing reading on regulatory developments and then demonstrating comprehension through a quiz.
“You’re not taking hours to prepare,” Marks said. “It’s a modest price to pay literally and figuratively” to maintain a foothold in the financial industry.
The SEC recently approved Finra’s changes to its continuing education requirements, which included the industry reentry flexibility as well as a provision requiring regulatory education each year instead of once every three years.
The continuing education reform allows the broker-dealer self-regulator to provide reps with a wider window to step away from the industry for maternity leave or to care for an ailing relative.
“These enhancements to the continuing education program provide individuals with more flexibility to address life and career events and necessary absences from registered functions without having to retake qualification exams in order to return to the industry,” Finra Chief Executive Robert W. Cook said in a statement. “The changes support Finra’s efforts to promote diversity and inclusion in the securities industry by attracting and retaining a broader and more diverse group of professionals.”
The reform gives the brokerage industry a framework similar to those of other professions. For instance, lawyers who stop practicing can maintain their licenses through continuing education without having to retake the bar exam.
“It brings financial services more into line with other sectors that have qualification exams,” Marks said.
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