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CE Transformation Update: Annual Regulatory Element and the Latest on the MQP

October 04, 2022

The implementation of the largest change to the securities industry Continuing Education program in 25 years is well under way, with a few new deadlines right around the corner.

On this episode, we hear from Patricia Monterosso and Nicole Lefort from FINRA’s Credentialing, Registration, Education and Disclosure team about how the Maintaining Qualifications Program is progressing and what firms can expect with regard to changes to the Continuing Education Regulatory Element in the months ahead.

Resources mentioned in this episode:

Regulatory Element Topics

CE Council Website

FINRA CE Transformation Resource Page

Maintaining Qualifications Program

Episode 97: What to Expect: The CE Transformation & Maintaining Qualifications Program

Listen and subscribe to our podcast on Apple PodcastsGoogle PodcastsSpotify or wherever you listen to your podcasts. Below is a transcript of the episode. Transcripts are generated using a combination of speech recognition software and human editors and may contain errors. Please check the corresponding audio before quoting in print. 


00:00- 00:26

Kaitlyn Kiernan: The implementation of the largest change to the Securities Industry Continuing Education Program in 25 years is well underway, with a few new deadlines right around the corner. On this episode, we hear from two members of FINRA's Credentialing, Registration, Education and Disclosure Team about how the Maintaining Qualifications Program is progressing and what firms can expect with regard to changes in the continuing education regulatory element in the months ahead.


Intro Music

00:35 - 00:59

Kaitlyn Kiernan: Welcome to FINRA Unscripted. I'm your host, Kaitlyn Kiernan. We're welcoming two guests from FINRA's Credentialing, Registration, Education and Disclosures Team, or CRED, with us today to give an update on the ongoing Continuing Education transformation. Joining us are Patricia Monterosso and Nicole Lefort, two members of CRED's Continuing Education Services team. Patricia and Nicole, welcome to the show.

01:00 - 01:00

Patricia Monterosso: Thank you.

01:01 - 01:01

Nicole Lefort: Thank you.

01:02 - 01:09

Kaitlyn Kiernan: So just to kick us off, can you both start by introducing yourselves and telling us what you do with FINRA? Patricia, do you want to start?

01:10 - 01:20

Patricia Monterosso: I'm Patricia Monterosso, Director of CRED Continuing Education Services. I'm responsible for the overall management of the Securities Industry Continuing Education Program.

01:21 - 01:22

Kaitlyn Kiernan: And Nicole, how about you?

01:22 - 01:40

Nicole Lefort: I'm Nicole Lefort. In my role as Associate Director of Continuing Education Content, I lead the team responsible for creating content included in our courses and training programs. My team is comprised of individuals with industry training and instructional design experience.

01:41 - 01:56

Kaitlyn Kiernan: Patricia, you joined us on the podcast at the beginning of the year on Episode 97 to talk about the CE transformation. And we'll link to that episode in our show notes for anyone who wants to go back for some more detail. But at a high level, what are we talking about here?

01:56 - 02:36

Patricia Monterosso: First, it's great to be back again to provide an update on the CE transformation. It's a major initiative that began a few years back with the CE Council making recommended changes to the CE program, including enhancements to the regulatory element and the firm element. And they suggested the creation of a maintaining qualifications program that would allow previously registered individuals to maintain their qualifications after terminating their registration by participating in annual CE. And in support of these suggested changes, FINRA and the other SROs have filed rule changes and we made other program improvements that are also underway that we'll touch upon today.

02:37 - 03:00

Kaitlyn Kiernan: When we talked about the Maintaining Qualifications Program, that's what allows people to maintain their series exams, so like a Series 7, Series 24 and the like, for five years instead of just two years. As long as, like you said, they complete some CE. So that became effective on March 15th of this year, 2022. So what is the latest here now that that's in effect?

03:02 - 03:28

Patricia Monterosso: Since then, Kaitlyn, nearly 15,000 individuals have enrolled in the program. And beginning in July of this year, those individuals received their annual CE Learning Plans for 2022, which includes a regulatory element which is similar to what a registered person would receive, and additional training courses that are part of a practical element that Nicole's team develops.

03:29 - 03:31

Kaitlyn Kiernan: What kind of CE do they have to complete?

03:32 - 03:52

Nicole Lefort: As Patricia just mentioned, they have an annual CE requirement, and it's comprised of two components, the regulatory element and the practical element. The regulatory element is the same content that registered individuals receive, as Patricia mentioned, and the practical element is new for the Maintaining Qualifications Program.

03:53 - 03:55

Kaitlyn Kiernan: And how much CE are we talking about here?

03:56 - 04:03

Nicole Lefort: The amount of CE will vary from year to year and also registration to registration.

04:04 - 04:08

Kaitlyn Kiernan: And what is this practical element that you mentioned that was developed just for this program?

04:09 - 04:31

Nicole Lefort: The practical element are e-learning courses specific to the maintaining qualifications program. Basically, it's learning that's meant to be analogous to what an individual would get through their firm if they were still in the industry and still associated with a firm. The courses cover foundational knowledge and guidance for various topics and subjects.

04:31 - 04:37

Kaitlyn Kiernan: And so if a individual is no longer associated with a firm, how are they completing the CE?

04:38 - 04:46

Nicole Lefort: They go into FinPro and from there they will be able to see the courses they've been assigned and also track completion.

04:47 - 04:49

Kaitlyn Kiernan: And can you tell us again what is FinPro?

04:50 - 05:17

Patricia Monterosso: It's the Financial Professional Gateway, and it's a tool by which registered and formally registered persons can go in and track and manage some of their registration type information. And FinPro is the tool by which individuals would go in to enroll in the MQP, renew their enrollment on an annual basis, and it's where they would access their required training as well as track their completion status and [indeciperable] annual completion history.

05:18 - 05:23

Kaitlyn Kiernan: Have you heard from any of the people enrolled in the MQP Program so far?

05:24 - 05:51

Patricia Monterosso: Nearly all of the feedback we've received from individuals involved in the MQP has been positive. Individuals are just happy to be able to extend their qualifications for an additional three years on top of the two years by participating in this program. So we've heard feedback from individuals who've shared that they're stepping away from the industry to start families, going back to school to pursue advanced degrees, and individuals who are just in between jobs.

05:52 - 06:09

Kaitlyn Kiernan: That's awesome to hear that that program is going so well so far. You mentioned earlier that Continuing Education has two elements for associated individuals. There's the firm element and the regulatory element. Can you talk through the difference between these two things?

06:10 - 06:30

Patricia Monterosso: The regulatory element, which is administered by FINRA, focuses on regulatory changes such as new rules and amendments and regulatory trends. While the firm element, which is provided by each firm, focuses on securities products, services and strategy. It's policy and industry trends.

06:31 - 06:39

Kaitlyn Kiernan: So a firm element might be AML, whereas regulatory element might be Reg BI?

06:39 - 06:55

Patricia Monterosso: AML could also be covered as part of the regulatory element depending on if there's a significant rule change. But the firm would also cover AML as part of its firm element training to hone in on firm policies, more specifically.

06:56 - 07:00

Kaitlyn Kiernan: I'm sure they could also hone in on firm policy with Reg BI more specifically as well.

07:00 - 07:01

Patricia Monterosso: Yes.

07:01 - 07:04

Kaitlyn Kiernan: So why is CE segmented in this way?

07:05 - 07:33

Patricia Monterosso: Just taking a step back, the goal of this program has been to provide registered persons with education that facilitates maintaining adequate knowledge and understanding of their registered goals. The two parts are meant to complement one another and facilitate a partnership between firms and regulators. And so the CE transformation changes create even more opportunities to increase synergies between the two programs.

07:34 - 07:43

Kaitlyn Kiernan: I understand there are some changes coming here. Can we start with the regulatory element? What's happening and how is this maybe going to help with these synergies that you mentioned?

07:44 - 08:30

Nicole Lefort: For the regulatory element where we are changing both the frequency of the requirement and the type of content that will be delivered. The regulatory element will now be an annual requirement. New courses will be provided at the beginning of each year and individuals will have a December 31st deadline to complete. As for the content, we are producing courses that are relevant and tailored to registration categories. We will be providing training specific to a particular audience, which allows us to emphasize what individuals need to know based on their registration or registrations they hold. Very generally, our courses will focus on topics within new rules and amendments, industry trends, as well as core content.

08:31 - 08:34

Kaitlyn Kiernan: So by moving to annual, what was it previously?

08:35 - 08:48

Patricia Monterosso: Previously it would have been every three years generally, so an individual would be required to complete regulatory element two years after the first anniversary of their registration and then every three years thereafter.

08:49 - 09:04

Kaitlyn Kiernan: So I can see how that can be complicated, because then you have different deadlines throughout the year for different individuals based on their registration date. So it sounds like you're moving it both annually and also simplifying things to just December 31st for everyone.

09:05 - 09:06

Patricia Monterosso: Yes, for sure.

09:06 - 09:24

Nicole Lefort: Having an annual requirement helps us provide registered persons with timely and relevant education training. The content in the program focuses on significant regulatory developments, and an annual program allows us to be more responsive to the current environment.

09:24 - 09:33

Patricia Monterosso: I would just echo what Nicole is saying. It is an opportunity to ensure that reps have the training that they need year over year.

09:33 - 09:40

Kaitlyn Kiernan: Yeah, three years is a long time to wait if there is a significant new development. So when does this go into effect?

09:42 - 09:46

Nicole Lefort: It goes into effect January 1st, 2023. So coming up.

09:46 - 10:02

Kaitlyn Kiernan: Very soon, the holidays will be here before we know it. What does this look like for people with multiple registrations? I know you mentioned that Continuing Education's supposed to be more tailored for the different registrations. So how does this work when you have maybe a Series 7 and a 24?

10:02 - 10:35

Nicole Lefort: Individuals with multiple registrations, as you mentioned, may have more content to complete than individuals with a single registration. And that's because they're going to be required to complete content specific to each registration category they hold. So the example that you mentioned, a person who holds a general securities registration and a general principal registration will be required to take courses assigned to each of those registrations. And some of our courses are relevant to multiple registrations, while some have a more limited audience.

10:36 - 10:41

Kaitlyn Kiernan: So the ones that are relevant to both, they would just complete the one time, not twice.

10:41 - 10:42

Nicole Lefort: That is correct.

10:43 - 10:55

Kaitlyn Kiernan: I'm sure everyone is happy to hear that. So we talked about FinPro a little bit earlier. It is still new. So what are some of the benefits of FinPro and how will it make this easier for individuals?

10:57 - 11:34

Patricia Monterosso: FinPro, as mentioned, it is really a place that former and current reps can go to to directly access tools to manage their securities registration information that can include accessing a copy of their Form U5, updating their change of address. For CE purposes it's where registered persons go to access the regulatory element, track their completion progress, view their regulatory elements history. And as we mentioned earlier, it's also where individuals who are eligible for the MQP can enroll in the program and access their required learning for the MQP.

11:35 - 11:44

Kaitlyn Kiernan: FINRA just published the 2023 regulatory element topics - where can firms find this information and how do you hope they'll use it?

11:44 - 12:09

Patricia Monterosso: So FINRA has a dedicated page on It is linked to the Continuing Education section. It announces the Regulatory Element topic information on behalf of both FINRA and the CE Council. And the goal is to publish these annual topics in advance each year so that firms can use that information in planning their annual firm knowledge training programs.

12:10 - 12:13

Kaitlyn Kiernan: And what's new with the published topics this year?

12:14 - 12:42

Nicole Lefort: Rather than publishing content outlines as we have in the past, we'll be communicating the topics through the interactive tool that Patricia just referenced. The tool will allow a user to select a registration category or categories and see the corresponding topics that make up the learning plan for those that they selected. In addition to the topics, we will be providing course title and a brief description of the course.

12:43 - 12:48

Kaitlyn Kiernan: And how does FINRA work with the CE Council on the regulatory element?

12:49 - 13:26

Nicole Lefort: The CE Council is an advisory committee that's comprised of members from broker dealers, the SEC, the self-regulatory organizations, and the North American Securities Administrators Association. CE Council's main role is to provide guidance regarding the development and ongoing operation of the CE program for the industry. Part of that includes helping to identify and prioritize topics to be included in the regulatory element and the practical element courses. So we work with them to identify those topics and then we write the corresponding continuing education.

13:27 - 13:32

Kaitlyn Kiernan: Is there anyone else FINRA and the CE Council work with on the development of the content?

13:32 - 14:00

Nicole Lefort: We develop our content in conjunction with FINRA's Continuing Education Content Committee. The committee is comprised of representatives of broker dealers and SROs, and they are called upon to act as subject matter experts on registration functions, products, rules and regulations as well as broker dealer business areas. The committee members meet in small groups based on the subject matter expertise that's needed at a particular meeting.

14:01 - 14:07

Kaitlyn Kiernan: And switching gears a bit. How about the firm element side? What's new on that front?

14:08 - 14:42

Patricia Monterosso: So beginning on January 1st, 2023, this CE rules extend the annual firm element requirement to all registered persons. And the amended CE rules explicitly allow firms to consider other training requirements, such as required AML training and the annual compliance meeting, or in satisfying an individual's firm element training requirement. Of course, firms would still be required to complete a needs analysis to determine the appropriateness of applying those other training requirements towards the firm element.

14:43 - 14:50

Kaitlyn Kiernan: So that might ease the burden on individual reps a little bit if they can count certain trainings towards that firm element.

14:51 - 14:55

Patricia Monterosso: Yes, if the firm has deemed that training to be appropriate.

14:55 - 15:01

Kaitlyn Kiernan: And what resources does FINRA have for firms when it comes to developing their firm element CE?

15:01 - 15:27

Patricia Monterosso: Well FINRA is a part of the CE council, and CE council has been working on firm element resources. They're continuously updating guidance, frequently asked questions, and more recently or in the past year or so, they've created a template that firms can use to help with conducting their annual needs analysis. These resources, they're all available on the CE Council website.

15:28 - 15:44

Kaitlyn Kiernan: That sounds like a great resource. We'll link to that in our show notes for listeners. But there have been a lot of changes in the past year or so, as evidenced by the fact that we've had you with us twice, Patricia. Where are we in the lifecycle of this overall transformation?

15:44 - 16:13

Patricia Monterosso: We're still in the implementation phase of this CE transformation. We're coming close to completing the components of the transformation that are associated with the rule changes we just talked about that are coming up on January 1st, 2023. Another component of the CE transformation that's in the works is the creation of a centralized content catalog that firms may optionally leverage for their firm trade. So more to come on that maybe in a later podcast down the road.

16:14 - 16:22

Kaitlyn Kiernan: Excellent. And is there anywhere else you would point listeners to go for more information on any of the topics we've touched on here today?

16:22 - 17:10

Patricia Monterosso: Yes, I would suggest visiting FINRA's CE transformation page that is Finra.Org/CET, that page links to a number of resources that we've mentioned and more. It's continuously updated with new information and resources as they become available, including information about upcoming webinars on the CE transformation. Also, as mentioned, the CE Council, they've developed resources, and one in particular is a CE transformation playbook. It includes a collection of information and resources, including a timeline of key milestones and a stakeholder considerations resource, among other things. The playbook can be found on the CE Council website, and that's CECouncil.Org.

17:11 - 17:55

Kaitlyn Kiernan: Great. And you can go to our show notes for kind of a list of all those great resources. Well, Nicole and Patricia, thank you so much for joining me today to share the latest with the CE transformation. Listeners, definitely be sure to check out the resources linked in the show notes for more on this topic, and for our listeners, if you don't already, be sure to subscribe to FINRA Unscripted wherever you listen to podcasts so you can stay up to date on all of our new episodes. If you have comments on today's episode or ideas for future episodes, you can email us at [email protected]. Today's episode was produced by me Kaitlyn Kiernan and engineered by John Williams. A special thanks to Mareike Finck. Until next time.


Outro Music

18:01 - 18:28

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18:29 – 18:34

Music Fades Out

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