[ by Howard Haykin ]

FINRA filed for immediate effectiveness to extend the date by which eligible registrants must complete a Firm-Element Continuing Education Program in order to be eligible to engage in a security futures business.  The new extended deadline is 12/31/2015 – one day before a revised examination that includes security futures products goes into effect. 

In the current rule filing, NASD Rules 1022 and 1032 - Categories of Principal and Representative Registrations, respectively - would be amended.  The rule changes are effective as of 12/31/2012.

Purpose of the Change.   In 2002, FINRA modified these registration categories to include the activities of engaging in and supervising securities futures: (i) Registered Options Principal (Series 4);  (ii) Limited Principal – General Securities Sales Supervisor (Series 9/10);  (iii) General Securities Representative (Series 7); and, (4) Registered Options Representative (Series 42).  At that time, FINRA also required that persons currently registered or becoming registered in these categories complete a firm-element continuing ed requirement addressing security futures before they conducted any security futures business.

FINRA wanted the change to ensure that registered personnel who may not be familiar with the risks, trading characteristics, terms and nomenclature of these products, or with the fact that they are subject to the joint jurisdiction of the SEC and CFTC, receive the necessary training.  However, on two prior occasions, FINRA postponed instituting the revised qualification examinations for these categories.  First, the importance of doing so was muted due to low trading volume in security futures and because firms had limited interest in having their RRs engage in security futures business. 

In view of the fact that there are no revised qualification examinations addressing security futures, FINRA intends to continue to require eligible registrants to complete the mandated firm-element continuing education requirement before engaging in any security futures business. The proposed rule change amends NASD Rule 1022 and NASD Rule 1032 to extend the deadline by which eligible registrants must complete the firm-element continuing education requirement to engage in a security futures business from December 31, 2012 to December 31, 2015, or one business day prior to the date a revised examination that includes security futures products is offered.

For further details, go to:   [FINRA Rule Filing 12-55, 12/12/12].