In September 2015, the Securities Industry Continuing Education Program celebrated its 20th anniversary. In recognition, we gathered past and present CE Council Chairpersons and SRO representatives, including RAD senior leadership, FINRA Chairman and CEO Rick Ketchum and former SEC Chairman Arthur Levitt, to share their perspectives on the development of the Continuing Education Program.
This video documents the evolution of the Continuing Education Program, beginning in May 1993 with the formation of a securities industry task force at the direction of then-SEC Chairman Arthur Levitt.
The conversations recount the creation of the two-part Continuing Education Program—the Regulatory Element and the Firm Element. Initially the S101 was the general program available for everyone in the securities industry. Over the years additional programs were introduced to address specific registrations—the S201 Supervisors Program, was launched in 1998; the S106 Program for Investment Products/Variable Contracts Representative in 2001; the S901 Program for Operations Professionals in 2013; and most recently in 2016, the personalization of the S101 Program which permits participants to self-select content specific to their registrations—retail sales, institutional sales, investment banking/research, trading and operations.
The discussion details the progression of the content development process and technological considerations made during the design of the Regulatory Element and culminates with the launch of CE Online in October 2015.
1993 - 1994
In May 1993, six SROs-the New York Stock Exchange, American Stock Exchange, Chicago Board Options Exchange, Municipal Securities Rulemaking Board, NASD and Philadelphia Stock Exchange-created the Securities Industry Task Force on Continuing Education to study the issue of continuing education and to develop recommendations. Four months later, the Task Force issued a report calling for a formal, two-part continuing education program: the Regulatory Element for securities industry professionals requiring periodic, uniform training in regulatory matters; and the Firm Element Program consisting of ongoing training programs provided by firms to keep employees up to date on job-specific subjects. The report also recommended creation of a permanent Securities Industry/Regulatory Council on Continuing Education to (1) determine the specific content of the uniform regulatory component and (2) mandate specific minimum core curricula for inclusion in appropriate segments of ongoing firm training programs.
In May 1994, Arthur Levitt, then chairman of the SEC, issued a letter to the Chief Executive Officers of securities firms emphasizing that mandatory continuing education of securities industry professionals was "the industry's highest priority" and asked for prompt implementation of this initiative.
|1995 - 2000||
The SRO rules for continuing education were approved by the SEC on February 8, 1995. At that time, firms were advised that they were required to have their Firm Element needs analysis and training plans completed and available for SRO exam staff by July 1, 1995. During this time, content committees were already hard at work developing the first Regulatory Element Program, the S101, which was designed to be a general program for all registration types. In an effort to help firms understand and prepare to meet their requirements of CE, Council sponsored seminars around the country.
With firms asking for guidance in meeting their Firm Element requirements, Council issued the Guidelines for Firm Element Training in November 1995. A year later, Council published Firm Element Practices and Council Commentary, which provided excerpts of needs analyses and training plans from broker-dealers of various sizes and types and included commentary from the Council to highlight strong and weak aspects of the plans. The first Firm Element Advisory was issued in March 1997 to summarize the regulatory notices that may affect firm’s Firm Element requirements.
Many changes were implemented into the continuing education rules in 1998. The SRO rules were amended to reflect a change in the participation cycle for the Regulatory Element Program and also removed the opportunity for registered persons to graduate from participation. Unless individuals were previously grandfathered or graduated from the program, they were required to continue to take the Regulatory Element for their entire registered career. Another change that came about that year specifically addressed individuals who held a supervisory registration.
In July 1998, the Supervisors Program, also known as the S201, was introduced. With the introduction of the S201, individuals who were registered in a supervisory capacity for less than 10 years and who may have previously been grandfathered or graduated were required to re-enter the program. Firms were reminded that appropriate training of the immediate supervisors of registered persons who had direct contact with customers was required in their Firm Element training.
In their ongoing effort to address firm's questions and concerns relating to the Firm Element Program, the Council developed "Firm Element Questions & Answers for Small Firms, in 2000." The intent of this publication was to clarify Firm Element requirements and to provide guidance specifically directed to small firms in developing their continuing education programs.
2001 - 2006
In 2001, in response to feedback from the industry, firms were permitted to administer the Regulatory Element Program to their registered persons by instituting an in-firm delivery program. Firms were required to follow specific procedures and file a letter of attestation with their SRO before in-firm delivery could be introduced at the firm.
In the summer of 2001, a third Regulatory Element program was developed. The S106 Program was developed specifically for individuals who were Series 6 registered. Upon implementation of this program, Series 6 registered persons would take the S106 Program, supervisors/principals of Series 6 registered persons would continue to take the Supervisors Program, and all other registration categories would continue to take the General Program, the S101.
In 2004, based on recommendations by the Council, SROs amended their continuing education rules to rescind all exemptions from required participation in the Regulatory Element Program. Registered persons who were previously eligible for "grandfathered" or "graduated" exemptions were now required to participate in the Regulatory Element Program on a prescribed schedule.
As part of its ongoing commitment to communicate and reinforce the importance of compliance with just and equitable principles of trade, the Council developed a Regulatory Element module with specific emphasis on ethics. Although Regulatory Element programs had consistently included ethical considerations in a variety of business scenarios, it was determined that the importance of ethical conduct should be more prominently featured and more emphatically stressed to all registered persons. An ethics module was added to all Regulatory Element Programs in January 2005.
As with many of its initiatives, Council responded to requests from the industry for preparatory material, for the Regulatory Element and the Firm Element Programs, by introducing netCEP in 2006. netCEP consisted of actual scenarios that were retired from the Regulatory Element Programs. Individuals could access netCEP to prepare for a required Regulatory Element session. While the content had been well received by individuals, the Council decided to cease offering netCEP and agreed to move the content to FINRA to integrate it into its e-learning programs.
In 2005, Council formed the Long Range Planning Committee to review all aspects of the Regulatory Element Program including the delivery mechanism and instructional design aspects. Council decided at that time that a more advanced continuing education program was needed and the concept of redesigning the current continuing education programs in three phases was adopted.
|2007 - 2013||
The purpose of the redesign was to employ new instructional design methodologies with state-of-the-art technology to provide CE candidates with a more well-rounded educational experience. In 2007, the first phase of the redesign project began with the S101 and S106 Programs. Changes were made to the content outlines, the structure of the programs and the content. The content outlines were re-organized from eight to four modules.
Each module contains a series of cases. Each case contains specified learning objectives which play out in a storyline that follows characters through a series of scenes to a resolution. The cases are text-based with media treatments providing information contextually related to the storyline. Educational elements, in the form of resources and rollovers, are integrated into the scenes to provide more in-depth knowledge about the topics being covered. Activities focusing on the learning objectives follow each scene. These activities assess the participant’s understanding of the topics covered in the scene. If proficiency is not shown, participants are shown another case in the same module. Participants must show proficiency in all modules in order to successfully complete their CE sessions.
In 2009, a pilot program was conducted to verify the validity of the new programs’ structure and content. The accumulation of comments and feedback from the session helped put the finishing touches on the project. The redesigned S101/S106 content was successfully launched into the industry on January 4, 2010.
The second phase of the Redesign, focused on the S201 Program for Supervisory/Principals, began in 2009. The content committees developed content outline using the redesigned format. The redesigned S201 program was launched on January 2, 2012.
A third phase of the redesign of Continuing Education began in 2013, with the development of the S901 Operations Professional Regulatory Element Program. The S901 was developed in response to a recommendation from the SEC to create a regulatory structure for back-office operations staff. The Program launched on October 17, 2013.
|2015 - Present||
In 2015 the development of a new era for CE began. With the approval of amendments to FINRA Rule 1250 from the SEC, the CE Online Program was rolled out in two phases. The first phase of CE Online included the S106, S201 and S901 Regulatory Element Programs and was launched on October 1, 2015. As a result, the fee for CE Online was reduced to $55 from the $100 charged for test center delivery.
The second phase of the CE Online Program included the Personalized S101 Regulatory Element Program, which was launched on January 4, 2016. Test-center delivery was phased out, except for special accommodations, effective July 1, 2016. The use of In-Firm delivery of the Regulatory Element is was phased out effective January 4, 2016. All Regulatory Element Programs are now available through online delivery.
- 1995 - William Simmons
- 1996 - Therese Haberle
- 1997 - David DeMuro
- 1998 - Robert Watts
- 1999 - Richard Austin
- 2000 - John Weingart
- 2001 - John Dixon
- 2002 - Mary Owen
- 2003 - John Noble
- 2004 - Ronald Thomson
- 2005 - Susan Agonis
- 2006 - Howard Plotkin
- 2007 - Philip Bugay
- 2008 - Dean Morell
- 2009 - John T. Miller
- 2010 - James Rabenstine
- 2011 - Deborah Castiglioni
- 2012 - Nicholas C. Cochran
- 2013 - William E. Bartol
- 2014 - Patricia Bartholomew
- 2015 - Joseph Fleming
- 2016 - John Meegan