FINRA Proposes New Compliance Exam Along with Other Changes to Registration/Qualification Requirements
FINRA has proposed several new Registration and Qualification requirements including a new stand-alone registration for Compliance Officers based on the old NYSE rule. FINRA will adopt the NYSE’s Compliance Official Examination and require the Series 7 as a prerequisite. FINRA also clarifies that members must have an appropriately registered Chief Compliance Officer, Financial Operations Principal, and Operations Principal, although the latter two roles may be consolidated in one person for firms that don’t do clearing. The proposed rules also allow a permissive registration for any person engaged in a “bona fide business purpose” of the member. FINRA will add an “inactive” category and will allow registrations held by persons employed by a securities industry affiliate. FINRA does not propose changing the requirement to have two principals.
OUR TAKE: FINRA is formalizing the functional roles within broker-dealers in an effort to ensure that qualified persons perform critical functions such as financial operations and compliance. At the same time, FINRA is making it easier for firms to hold licenses of those not directly involved in the securities business.