On October
18, 2004, the Securities and Exchange Commission approved amendments to Rule
G-3, on professional qualifications, to remove the exemptions from the
Regulatory Element of the Continuing Education Program and require all
registered persons to participate in the Regulatory Element.[1] The effective date of the amendments is
dependent upon the effective date of similar amendments filed by the NASD[2]
because NASD administers the Regulatory Element computer-based education
program. NASD has stated that it will
announce the effective date of its rule change in a Notice to Members to be
published no later than 60 days following Commission approval. NASD stated that the effective date will be
(1) not more than 30 days following publication of the Notice to Members
announcing Commission approval, (2) not more than 30 days following the
implementation of necessary changes to Web Central Registration Depository (Web
CRD), or (3) April 4, 2005, whichever date is the latest to occur. The effective date of the MSRB’s amendments
will be the same as the effective date of the NASD’s amendments.
A
description of the amendments can be found at “Amendments Filed to Remove
Exemptions from Regulatory Element of Continuing Education Program,” MSRB
Notice 2004-27 (August 5, 2004)
(http:www.msrb.org/msrb1/whatsnew/G-3CEJuly2004.htm).
(a) – (g) No change.
This section (h) prescribes requirements regarding the
continuing education of certain registered persons subsequent to their initial
qualification and registration with a registered securities association
with respect to a person associated with a member of such association, or the
appropriate regulatory agency as defined in section 3(a)(34) of the Act with
respect to a person associated with any other broker, dealer or municipal
securities dealer (“the appropriate enforcement authority”). The requirements shall consist of a
Regulatory Element and a Firm Element as set forth below.
(A)
Requirements—No broker, dealer or municipal securities dealer shall permit any
registered person to continue to, and no registered person shall continue to,
perform duties as a registered person, unless such person has complied with the
requirements of section (i) hereof.
[(1)]
Each registered person shall complete the Regulatory Element [beginning
with] on the occurrence of their second registration anniversary
date and every three years thereafter or as otherwise prescribed by the
Board. On each occasion, the Regulatory
Element must be completed within 120 days after the person’s registration
anniversary date. A person’s initial
registration date, also known as the “base date,” shall establish the
cycle of anniversary dates for purposes of this section (i). The content of the Regulatory Element shall
be determined by the Board for each registration category of persons subject to
the rule.
[(2)
Persons who have been continuously registered for more than 10 years as of the
effective date of this section are exempt from the requirements of this rule
relative to participation in the Regulatory Element, provided such persons have
not been subject to any disciplinary action within the last 10 years as
enumerated in paragraphs (i)(C)(1)-(2) of this section. However, persons delegated supervisory
responsibility or authority pursuant to rule G-27 and registered in such
supervisory capacity are exempt from participation in the Regulatory Element
under this provision only if they have been continuously registered in a supervisory
capacity for more than ten years as of the effective date of this rule and
provided that such supervisory person has not been subject to any disciplinary
action under paragraphs (i)(C)(1)-(2) of this section.]
[(3) In
the event that a registered person who is exempt from participation in the
Regulatory Element subsequently becomes the subject of a disciplinary action as
enumerated in paragraphs (i)(C)(1)-(2), such person shall be required to
satisfy the requirements of the Regulatory Element as if the date the
disciplinary action becomes final is the person’s initial registration
anniversary date.]
(B) No change.
(C) [Re-entry into Program]
Disciplinary Actions—Unless otherwise determined by the appropriate
enforcement authority, a registered person will be required to [re-enter]
retake the Regulatory Element and satisfy all of its requirements in the
event such person:
(1) becomes
subject to any statutory disqualification as defined in Section 3(a)(39) of the
Securities Exchange Act of 1934;
(2) becomes
subject to suspension or to the imposition of a fine of $5,000 or more for
violation of any provision of any securities law or regulation, or any
agreement with or rule or standard of conduct of any securities governmental
agency, securities self-regulatory organization, the appropriate enforcement
authority or as imposed by any such regulatory or self-regulatory organization
in connection with a disciplinary proceeding; or
(3) is ordered as
a sanction in a disciplinary action to [re-enter] retake
the [continuing education program] Regulatory Element by
any securities governmental agency, the appropriate enforcement authority or
securities self-regulatory organization.
[Re-entry] The
retaking of the Regulatory Element shall commence with [initial] participation within 120 days of the registered person becoming subject to the
statutory disqualification, in the case of (1) above, or the completion of the
sanction or the disciplinary action becomes final, in the case of (2) or (3)
above. The date that the disciplinary
action becomes final will be deemed the person’s [initial registration
anniversary] new base date for purposes of this section (i).
(D) - (G) No
change.
(ii) No
change.
