The Financial Industry Regulatory Authority (FINRA) filed a proposal with the Securities and Exchange Commission (SEC) to streamline competency exams and facilitate opportunities for professionals looking to work in the securities industry.
“This new approach would give individuals seeking to enter the securities industry the opportunity to demonstrate a fundamental knowledge of regulatory requirements prior to joining a firm, potentially providing firms a larger pool of qualified candidates,” Robert Cook, FINRA president and CEO, said. “It would also provide enhanced flexibility and efficiency in our qualifications programs, while maintaining important standards and investor protections.”
Individuals who work for a FINRA-regulated firm are required to demonstrate their qualifications by passing specific exams.
The proposal revises the current exam structure to eliminate duplicative testing and barriers to maintaining qualifications. Specifically, the changes would allow an individual with no prior securities industry experience to take a general knowledge exam called the Securities Industry Essentials as a first step to entering the industry. Newcomers to the industry are also required to pass a second, more-specialized knowledge exam, and be sponsored by a firm.
People who transfer to a financial services affiliate of a firm may also qualify for a waiver that allows their credentials to be reinstated, should they return to the industry within a seven-year period and meet the requirements of this waiver program. Currently, they must retake the exam after two years.
Any person associated with a firm may also obtain and maintain any qualification and registration permitted by the firm. This change allows personnel to demonstrate proficiency for new roles in a firm.
The SEC will review the proposal and may request changes or amendments to it. The comment period is open for 21 days following publication in the Federal Register.