Letter from the 2021 Council Chair
As the 2021 Chair of the Securities Industry/Regulatory Council on Continuing Education (Council), I would like to continue the tradition established by my predecessors and provide you with a review of the 2021 activities and accomplishments of the Council. As described in the following sections, the Council’s primary mission continues to be implementing improvements and modernization to the Securities Industry Continuing Education Program (CE Program) to better serve the industry’s continuing education (CE) needs. This year was particularly exciting in that regard as the Council, working with industry regulators and the industry, made meaningful progress toward CE Program modernization.
In 2021, the Council was composed of 16 industry members and six self-regulatory organization (SRO) members, as well as SEC, NASAA and SRO liaisons to the Council. Industry members generally serve four-year terms, and the Council meets quarterly.
The Council has specific advisory and consultative responsibilities to the CE Program. These are:
II. recommending and approving new content topics for the Practical Element component of the Maintaining Qualifications Program;
III. recommending updates to the Firm Element;
IV. promoting effective implementation of meaningful CE to the securities industry;
V. liaising with appropriate industry groups and regulators; and
VI. maintaining the program on a revenue neutral basis subject to adequate financial reserves.
There are five standing Council committees: the Executive Committee, the Regulatory Element Committee, the Firm Element/Strategic Planning Committee, the Finance Committee and the Nominating Committee.
An additional ad hoc committee, the Change Management and Communications Committee, convened in 2020. This newly established committee continues to focus on change management and communications strategy efforts related to the CE Council transformation initiative. In the following sections, I will share some of the Council’s 2021 accomplishments.
I. The Regulatory Element Program
Steve Longo, Compliance Surveillance Director and Global Head, Information Barrier Surveillance Group at Citigroup Global Markets Inc., served as chairperson of the Regulatory Element Committee in 2021. The Regulatory Element is currently comprised of two distinct programs:
- The S101 General Program for Registered Persons is the original Regulatory Element introduced in 1995 for Series 7 registered persons. Today the program includes all other representative-level registrations and personalization in the form of self-selection by candidates. Candidates select one module that reflects their business function from the following: retail sales, institutional sales, trading, operations, investment banking and research.
- The S201 Supervisors Program for Registered Principals and Supervisors was introduced in October 1998.
In preparation for upcoming changes to the CE Program discussed in FINRA’s Regulatory Notice 21-41, the committee's goals have included working on topic selection and ongoing evaluation of topics for the new annual Regulatory Element to be launched in January 2023. The annual learning plans (which will replace the current S101 and S201) will include registration-specific, tailored content that addresses rules, regulations and ethical business practices of fundamental importance to the industry or of regulatory concern. CE Regulatory Element content is developed by CE Content Committees composed of industry subject matter experts, along with SEC, SRO and NASAA representatives, who meet periodically for this specific purpose.
II. The Practical Element Component of the Maintaining Qualifications Program
Additionally, the committee has been working on developing content standards for the new Maintaining Qualifications Program to be launched in March 2022. Specifically, the committee has developed a topic identification and prioritization process to facilitate robust CE content for participants in the program. From this process, learning plans have been created.
III. The Firm Element
This year’s Firm Element/Strategic Planning Committee chairperson was Melanie Taylor, SVP, Compliance Legal Risk at LPL Financial. This committee reviews industry issues and trends and provides guidance for Firm Element tools that may be useful to the industry.
In 2021, the committee published updated guidance on the Firm Element requirement on the CE Council website. The committee also revamped the frequently asked questions to ensure both documents were in alignment.
Additionally, the committee has been working on the redesign of the Firm Element Advisory (FEA), which is targeted for publication early next year. The FEA is a document for the industry that the Council publishes quarterly and posts to the Council website to highlight current regulatory and sales practice topics for possible inclusion in a firm’s Firm Element training plan. Topics for the FEA are identified from a review of industry, regulatory and SRO announcements and publications of significant events. Such topics may center around new or amended rules and regulations (e.g., Regulation BI), regulatory notices, and SRO guidance.
IV. Promotion of Effective Continuing Education in the Securities Industry
The Council website, www.cecouncil.com, serves as a reliable source of information and assistance to the securities industry with respect to industry CE programs and compliance. A variety of tools and materials are available to assist individuals in preparing for their Regulatory Element sessions. Additional tools and resources are available on the Council website to assist firms in developing their Firm Element training programs.
This year’s chair of the Change Management and Communications committee was Gregory Jaeck, Senior Product Leader – Insurance and Annuities at Edward Jones. The committee has begun work on resources to assist firms with managing the upcoming changes to the CE Program. The committee created a focus group of industry professionals that will provide input on the content of the resources that will be rolled out in the coming year.
V. Liaising with Appropriate Industry Groups and Regulators
On occasion, Council members or SRO staff who support Council functions speak at industry conferences to keep the industry apprised of the latest issues and matters regarding the CE Program and to receive feedback on Council initiatives.
As part of our outreach, members and liaisons to the Council have spoken about the CE Program to industry representatives at the following meetings in 2021:
- Association of Registration Management’s Annual Conference (ARM);
- Licensing and Registration Council/Registration and Qualifications Subcommittee meetings (LRC); and
- Securities and Insurance Licensing (SILA) Annual Conference.
The Council is grateful for the SEC’s continued support over the years. Special thanks to the Commission’s staff from the Office of Chief Counsel in the Division of Trading and Markets who have worked so closely with us: Daniel Fisher, Edward Schellhorn and Kyra Grundeman.
VI. Maintaining the Continuing Education Program on a Revenue Neutral Basis
One of the responsibilities of the Council is to provide advice and consultation on maintaining the CE Program on a revenue neutral basis while ensuring adequate financial reserves to maintain and improve the programs.
The Finance Committee regularly reviews the financial health of the CE Program to ensure that it remains positioned to continue our mission. Gregor Maitland, AVP, Deputy Chief Compliance Officer at Lincoln Financial Group, served as the 2021 Finance Committee chairperson.
VII. Continuing Education Enhancements
The Council continues to focus its attention on the CE Program to explore a number of opportunities to improve the efficiency and effectiveness of education in the securities industry.
On November 17, 2021, FINRA published Regulatory Notice 21-41 announcing the implementation dates and operational launch details of CE transformation changes discussed in its Rule Filing 2021-015, which was approved by the SEC on September 22, 2021. The changes support recommended enhancements made by the CE Council. The enhancements are designed to: (1) ensure that registered persons receive relevant and sufficient Regulatory Element training on an annual basis; (2) provide firms with the guidance and resources necessary to design effective and efficient Firm Element training programs; and (3) provide a path for previously registered individuals to maintain their qualifications through CE.
The Council continually seeks to raise the industry’s awareness of both the Council and its mission to promote and improve the CE Program within the securities industry. The Council continues to be grateful for the SEC’s commitment to this goal and would appreciate continuing support from you and your fellow commissioners to raise awareness of the Council’s work and of the importance of the CE Program in general. On behalf of the Council, thank you for your support. I will be happy to answer any questions you might have.
2021 Chair of The Securities Industry/Regulatory Council on Continuing Education
SVP and Chief Compliance Officer
Waddell & Reed, Inc.