A registered representative (RR) receives a notice from FINRA stating that they are due for their Regulatory Element of Continuing Education (CE). The RR has been very busy with client meetings and decides to postpone completing the CE until the last possible moment, which is 60 days from the due date. What is the consequence if the RR fails to complete the Regulatory Element within the required timeframe?
- ATheir registration will become inactive, and they will be unable to conduct securities business.
- BThey will be required to retake the Series 6 examination.
- CThey will be assessed a monetary fine by FINRA.
- DTheir firm will be fined for non-compliance, but the RR's registration will remain active.
Show answer & explanationAnswer & explanation
Correct answer: A. Their registration will become inactive, and they will be unable to conduct securities business.
Failure to complete the Regulatory Element of Continuing Education within the prescribed timeframe (typically by the end of the second anniversary of their initial registration and every three years thereafter) will result in the RR's registration becoming inactive. An inactive registration means they cannot conduct any securities business.
Why the other options are wrong
- B. Retaking the exam is not the immediate consequence; rather, the registration goes inactive, and they cannot return to active status without completing the CE.
- C. While fines can occur for other violations, for CE non-completion, the primary consequence is inactivation.
- D. While the firm may also face consequences, the direct and immediate impact on the RR is the inactivation of their registration.
FINRA Regulatory Element CE (Non-Compliance)
The Regulatory Element of FINRA's Continuing Education program must be completed by registered representatives within specific timeframes. Failure to do so results in the RR's registration becoming inactive, prohibiting them from conducting any securities business.
- Mandatory CE component.
- Due on 2nd anniversary and every 3 years thereafter.
- Failure leads to inactive registration.
- Inactive RRs cannot conduct securities business.
Memory trick: Miss Your CE, Your License Flees, No More Business, Just Empty Keys.