[10295]
September 17, 1998
TO: COMPLIANCE ADVISORY COMMITTEE No. 27-98
CONTINUING EDUCATION AND TRAINING ADVISORY COMMITTEE No. 13-98
CONTINUING EDUCATION/TRAINING MEMBERS No. 10-98
OPERATIONS COMMITTEE No. 37-98
RE: UPDATE ON THE SECURITIES INDUSTRY CONTINUING EDUCATION
PROGRAM
______________________________________________________________________________
For your information, attached is NASD Notice to Members 98-68, which includes a Status Report on
the Securities Industry Continuing Education Program and the activities of the Securities
Industry/Regulatory Council on Continuing Education. The report summarizes the revisions to the
continuing education rules of the industry’s self-regulatory organizations. As we previously informed
you, these revisions, summarized below, became effective July 1, 1998.
Revisions to the Securities Industry Continuing Education Program
1. Registered persons are required to participate in the Regulatory Element of the
Continuing Education Program within 120 days of the second anniversary of their initial securities
registration and every three years thereafter, with no graduation from the Regulatory Element (the only
exception to the “no graduation” policy is described below). Unchanged is the requirement that a
registered person who receives a significant disciplinary action must complete the Regulatory
Element within 120 days of the effective date of the disciplinary action. The cycle for participating in
the Regulatory Element is then adjusted to reflect the effective date of the significant disciplinary
action, rather than the initial securities registration date.
2. The only persons who are graduated from the Regulatory Element are those who have been
registered for more than ten years as of July 1, 1998, and who have not been the subject of a
significant disciplinary action. However, graduated persons registered in a principal/supervisor
capacity for less then ten years as of July 1, 1998, and those graduates who acquire their first
principal/supervisor registration after July 1, 1998, re- enter the Regulatory Element regardless of
the number of years they have been registered.
3. Specialized Regulatory Element computer-based training for persons registered as
principals/supervisors is planned to begin later this year. Until such training is introduced,
such persons will continue to take the current “one-size-fits-all” Regulatory Element training.
4. The Firm Element of the Continuing Education Program requires firms to focus
specifically on supervisory training needs when conducting their annual training needs analysis.
Firms that determine they have a specific need for such training must address supervisory training
in their Firm Element training plan.
Questions and Answers About the Securities Industry Continuing Education Program
Following the status report are frequently asked questions and answers about the Securities Industry
Continuing Education Program. Question and answer #52 may be of special interest to Institute
membersóit has been a source of discussion at various Institute Committee meetings:
Q. Are registered sales assistants or registered investment company shareholder
servicing agents, who handle service calls from customers, covered persons within the
Firm Element?
A. Yes, if their activities involve the conduct of a securities business in a sales context.
The fact that the firm has decided to register such persons often suggests that there is
likely to be customer contact of the type that requires registration.
If you have any questions about the information contained in the enclosed materials, please contact John
Linnehan, Director, Continuing Education at NASD Regulation, Inc. at 301/208-2932 or Daniel Sibears,
Vice President, District Oversight, NASD Regulation, at 202/728-6911.
Linda Brenner
Director, Operations and Training
Attachment