Registration, Qualification and Continuing Education Requirements for Certain Operational Personnel

FINRA Securities Fraud and Mismanagement Attorney, Russell L. Forkey, Esq.

June 20, 2011:

The purpose of this post is to provide the reader with information relative to recently proposed or adopted rules changes issued by the Financial Industry Regulatory Authority (FINRA). This information is being provided for informational purposes only. Thus, it should not be relied upon as legal advice, Also, the information provided below is subject to withdrawal, revocation and modification by FINRA, which may or may not be reflected on this site.  Consequently, the reader should contact a qualified professional concerning the current status of any of the information referenced below.

Historically, federal and state law and self-regulatory organization ("SRO") rules, including NASD Rules 1021 and 1031, have required that individuals engaged in or supervising the securities or investment banking business of a member firm be qualified and registered persons.  These requirements generally have applied to, among others, individuals with customer contact providing advice (sales persons and investment bankers_ or effecting securities transactions (traders) and their supervisors.  However, unregistered individuals who perform and oversee member operations functions also play an integral role in the business of the firm, and their activities often have a meaningful connection to client funds, accounts and transactions.  Consequently FINRA believes that registration and education requirements for certain operations personnel are needed to help ensure that investor protection mechanisms are in place in all areas of a member's business that could harm the member, a customer, the integrity of the marketplace, or the public.  For a full copy of the original publication of this subject matter please follow the highlighted link.

Subsequently, FINRA issued, on June 15, 2011, a proposed amendment to its  original proposal.  This amendment relates to four matters, which can be seen by following the highlighted link.