The Firm Element requirements apply to all "covered persons." Covered persons is defined as registered persons, including salespeople, traders, sales assistants, investment company shareholder servicing agents, investment bankers, and others who have direct contact with public customers in the conduct of a securities sales, trading, or investment banking business, and their immediate supervisors, for as long as they are considered covered persons. The term "customer" in the definition of covered persons includes retail, institutional and investment banking customers, but does not apply to other broker-dealers. Each firm is required to analyze and evaluate its training needs in light of the firm's size, organizational structure, scope of business, types of products and services it offers, as well as regulatory developments and the performance of its registered persons in the Regulatory Element.
The Firm Element consists of annual, firm-developed and administered training programs designed to keep specified covered employees current regarding job- and product-related subjects. The Firm Element requires broker-dealers to annually evaluate and prioritize their training needs, i.e., conduct a Needs Analysis, and develop a written plan. In planning, developing, and implementing the Firm Element training, each broker-dealer must take into consideration its size, structure, scope of business, and regulatory concerns.
Particular emphasis should be placed on changes to firm or industry demographics from the prior year. New products, new rules related to firm business and problems the firm has experienced, such as complaints, regulatory or legal actions, are other particularly important considerations.
Each firm must then administer its Firm Element Continuing Education Program in accordance with its annual Needs Analysis and written plan, and must maintain records documenting the content of the program and completion of the program by covered persons.
(New) Navigating the Firm Element Advisory (FEA)
The Council has released the FEA in a new online format. The new webpage format provides easier access to relevant notices and resources about the specified subjects and will be updated quarterly to keep it current and relevant. The categories, listed on the left side of this page, are expandable and may contain additional information about suitability, supervision, and educational resources.
To find out in which areas your firm may want to focus its training, you can visit FINRAs Reports Center for Quarterly Performance Reports on your firms Regulatory Element Training.