FINRA proposes to require registration of back office and operations personnel

Abstract

Purpose

The purpose of this paper is to explain FINRA's proposed new registration category, qualification examination, and continuing education requirements for certain back office and operations personnel, as published in Regulatory Notice 10‐25, which would add an addendum to proposed Rule 1230.

Design/methodology/approach

The paper explains the background to the proposed rule, who “covered persons” are, what “covered functions” are, the purpose and content of the new qualification examination, exceptions to that examination, continuing educational requirements for operations professionals, and the proposed timing of the new requirements.

Findings

FINRA believes that licensing and education requirements for certain operations personnel are needed to help ensure that investor protection mechanisms are in place in all areas of a member firm's business that could harm a customer, a firm, the integrity of the marketplace or the public.

Practical implications

The breadth of the proposed rule will likely require firms to register significant numbers of back office and operations personnel who currently, under existing rules, are not required to be registered.

Originality/value

The paper provides practical guidance from experienced broker‐dealer lawyers.

Citation

Weissmann, M.R. and Tyrrell, P.M. (2010), "FINRA proposes to require registration of back office and operations personnel", Journal of Investment Compliance, Vol. 11 No. 3, pp. 20-24. https://doi.org/10.1108/15285811011082205