Proposed NASAA Model Rules to Extend the Validity Periods of Certain Examinations
Summary
SIFMA provided comments to the North American Securities Administrators Association (NASAA) on its Proposed NASAA Model Rules to Extend the Validity Periods of Certain Examinations.
Excerpt
July 22, 2022
Andrew Hartnett
CRD/IARD Steering Committee Chair
North American Securities Administrators Association
750 First Street, NE
Suite 1140
Washington, DC 20002
Dear Andrew:
The Securities Industry and Financial Markets Association (SIFMA)1 appreciates the opportunity to comment on “Proposed NASAA Model Rules to Extend the Validity Periods of Certain Examinations.”
As you well know, becoming a registered securities professional requires a significant commitment of time, energy and resources. Qualification exams are central to this commitment and are an important means of demonstrating competency in the particular securities area or areas that people will work.
Life events, career changes, business reorganizations and economic downturns, however, may require a securities professional to be absent from registered functions for a period of time. FINRA Rules previously permitted certain registered individuals who were gone for two years or less to return to the industry without re-taking the qualification exam(s). It is our understanding that most NASAA members apply that same two-year qualification rule for state registration of broker-dealer (BD) agents and investment adviser representatives. (IARs). We also understand that most states do not incorporate this FINRA rule by reference but instead need to expressly modify their regulations if they want to be consistent with the revised FINRA Rule.
As you described, FINRA has recently modified its Rule to allow individuals to have up to five years to reregister after termination, upon meeting certain conditions. These conditions include completing annual Continuing Education through a newly established Maintaining Qualifications Program (MQP) and annually completing the Regulatory Element of CE for each registration category they hold. SIFMA strongly supported this Rule modification, believing, like FINRA, that it provided important accommodations to registered persons “whose personal circumstances take them away from industry for a time.”
1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.