Laura Anthony

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    • Member Type(s): Expert
    • Title:Founding Partner
    • Organization:Legal & Compliance, LLC
    • Area of Expertise:Securities Law
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FINRA and SIE Examinations
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Uploaded By: Attorney Laura Anthony
Date Added: June 26, 2017
Description: FINRA and SIE Examinations- On March 8, 2017, FINRA, filed a proposed rule change with the SEC to adopt amended registration rules and restructure the entry-level qualification examination for registered representatives. The new rules would also eliminate certain examination categories. In the last LawCast in this series I talked about the new Securities Industry Essentials or the SIE exam. The proposed new rules also seek to extend the period of time prior termination of a license. Currently, if a registered person is not employed with a member firm for a period of two years, their securities license will lapse (except for the SIE which is good for 4 years) and they will need to retake a particular examination if they become re-employed by a member firm. The new rules allow this two-year period to be extended for up to seven years where a person is working for a non-FINRA member financial services affiliate. That is, a person can maintain licensing for up to seven years while working for a non-FINRA member financial services affiliate of the member firm (such as a parent company) if the following conditions are met: (i) the person has been registered with a FINRA member for a total of five out of the past ten years, the most recent of which must be their current employer; (ii) when the person transitions to the affiliate, a Form U-5 must be filed notifying FINRA of the transition; (iii) the person must continue to satisfy continuing education requirements and have no pending or adverse regulatory matters; and (iv) the person must continuously work for the financial services affiliate. If each of these qualifications is met, the person can re-register with a member firm for up to seven years without retaking a licensing examination. The new rules also seek to consolidate the examination structure. Over time, the number of exams and licensing levels has expanded such that as of today, there are 16 exams with a considerable amount of content overlap and requirements for individuals to pass multiple exams to work in a given job function. There are 11 FINRA exams alone for a registered representative engaging in sales activities with investors, most of which focus on specific products, such as options or private securities. The proposed consolidation and simplification of the examination process is the outcome of an effort to reduce redundancies and simplify the process, resulting in cost savings for all parties including FINRA, the member firm and representatives, and eliminating outdated examinations and materials. In the next LawCast in this series I will continue to discuss the exam consolidation proposal
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