On February 8, 1995, the Securities and Exchange Commission approved a proposal establishing the Securities Industry Continuing Education (SICE) Program, effective July 1, 1995.  The Program (as initiated) involved a formal two-part training procedure for securities industry professionals: Firm Element Continuing Education and Regulatory Element Continuing Education. This program and its requirements are outlined in NASD Rule 1120 and NYSE Rule 345A.

Firm Element Continuing Education requires securities firms to provide continuing training consistent with their own needs and business.  For the Firm Element, covered persons are defined as registered persons, and their immediate supervisors, who have direct contact with clients in the conduct of securities sales, trading or investment banking, or are defined as a research analyst.

For information regarding the Regulatory Element of Continuing Education, Select the “Regulatory Element” tab above.

What is the Goal of Firm Element Continuing Education?

The goal of Firm Element Continuing Education is to keep the firm’s covered persons and registered principals current on relevant products, their associated risks and suitability, rules and regulations and, where applicable, to provide annual training to research analysts.

What is the Requirement?

The Firm Element segment of the Securities Industry Continuing Education Program requires each firm to maintain a continuing and current training program for its covered registered persons and registered principals to enhance their securities knowledge, skill and professionalism. The program must be evaluated at least annually.

In order to accomplish the objectives of the training program, each covered person will be required to receive training that will take into consideration the following factors as identified in NASD Regulation – Firm Element Training Guidelines, last published 1/20/1998.

• How economic and market conditions may affect investment products or services offered or to be offered by the firm;
• Existing and planned business initiatives, especially new services, investment products or strategies;
• Legal and regulatory developments;
• Customer complaints, arbitrations, litigations, terminations for cause, internal disciplinary action or other actions involving the firm or its associated persons;
• Input on critical issues from areas such as compliance and legal, internal audit, trading and operations;
• Consideration of sales and marketing strategies related to products and services, with attention to related suitability and other regulatory issues that reasonably may be anticipated;
• Regulatory reviews, investigations and disciplinary actions specifically involving the firm;
• Comments or findings in periodic regulatory investigations; including any suggestions developed and disseminated by industry regulators reflecting their observations in aggregate;
• Feedback and, to the extent possible, evaluations of prior training programs and materials that may reveal unaddressed needs or areas for enhancement;
• Incorporation of applicable information from industry organizations;
• Input from management and registered personnel as to additional training that my be helpful;
• Use of performance reviews and business plans needs of individuals or groups of persons within the firm; and
• Aggregate quarterly performance of covered associated persons in the Regulatory Element as reported to the firm by the SROs.

Steps necessary for implementing/maintaining Firm Element CE

• Conduct an annual needs analysis
• Develop a written training plan
• Maintain a continuing education program for all “covered” persons to enhance their securities knowledge, skills, and professionalism
• Maintain records of training content
• Track course completion for all “covered” persons

Additional Requirements for Research Personnel

As of July 29, 2003 there were additional changes as stipulated in NASD Rule 1120 that stipulate Regulatory and Firm Element Training for securities research analysts as identified according to Rule 1050. This additional requirement mandates that this covered class must receive training in ethics, professional responsibility and the requirements of NASD Rule 2711.

Additional Information is available on the Securities Industry/Regulatory Council on Continuing Education Website.

Related Information

Importance of Training in the Securities Industry

* Page updated on June 15, 2006