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FINRA Proposes 7-Year Hiatus Period Before Requiring a Re-Taking of Exams

FINRA has filed a proposal that would allow individuals to return to a broker-dealer without re-taking their exams for up to 7 years so long as they fulfill continuing education requirements.  The proposal seeks to correct the current rule whereby a licensed representative loses his/her license after 2 years even though s/he merely transferred to a financial services affiliate.  The proposal also allows a person associated with a firm to obtain any qualification and registration permitted by the firm so as to allow such person to “demonstrate proficiency for new roles” and “help firms better manage unanticipated needs.”  FINRA will also create a new Securities Industries Essentials exam for those interested in joining the securities industry but may not yet be associated with a registered firm.  Those passing the SIE will then take a second specific proficiency exam upon joining a firm.

OUR TAKE: FINRA offers a long overdue revamping of the outdated examination rules.  The 2-year rule really makes little sense in the modern world populated by financial services firms that are not necessarily organized by regulatory designation.  Also, the contemplated SIE is a brilliant idea to get new blood in the industry and rid the current exams of duplicative questions.


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