Supervision working life

Continuing education

Every year there are 2 forms of continuing education that every registered representative and principal must complete. Both of them must be completed annually, each year, but the exact phrasing of each is a little different.

Firm element

This is taken at the office each year. By law, it must be completed annually. This is created by your firm, by lawyers, about the updates most effecting your business, your member firm, from new rules, regulations, and laws. It is generally a video, that much be watched in a verified way. Usually this is done at the office, after Covid era however, other ways have been devised. This is not a video you can put on play, and then go in the other room and play video games, and come back, click some buttons and get credit.

Regulatory element

This is a written exam, that must be completed by December 31st. It is still completed annually, but the law says by December 31, not end of the year, or annually like the firm element. This is an exam created by FINRA. It is not possible to fail it, you will have to keep repeating the question until you get it correct. Unlike the firm element that is created by your firm, and therefore will be given usually near the end of the year, the regulatory element could be taken anytime before December 31st each year, so can easily be taken at the very beginning of the year to get it out of the way.

Maintaining qualification following termination

The Maintaining Qualifications Program (MQP) allows people who leave a company, to maintain their representative and/or principal registration licenses for up to 5 years. They have to pay an annual $100 fee for participation in the program, and completing the annual CE requirements

There are 6 points that the person must meet to qualify, though 2 of them are easily combined in point 4 below. These apply to each registration category. They are;

1. The person must have been registered in the category for at least one year prior to the termination of the category, and not subject to a statutory disqualification
2. The person has to elect to participate in the continuing education program under this rule at the time of their U5 submission or within 2 years of the termination of the registration category.
3. The person completes by December 31 of each year, in a manner specified by FINRA, all CE during their participation in this program.
4. The person does not have a continuing education deficiency with regards to the regulatory element for 2 consecutive years or more, or become subject to a continuing education deficiency for 2 consecutive years while in the program.
5. The person does not become subject to a statutory disqualification during participation in the program.

Influencing or rewarding employees of other firms (gift limit):

There can be some very subtle differences between being happy with someone and rewarding them, wanting someone to think well of you and your business, and providing them a keepsake, or just underhanded bribery, extortion, and blackmail.

Gift limits

Companies often give gifts to employees of other companies. There could be many reasons for this, the vast majority, and certainly all your company does, are legal, but reasons why underhanded and dirty companies would do this is why there are limitations and rules in giving gifts. To be clear, this rule in no way implies limits to how much your firm, or any firm, can pay that firms employees or partners. This is just "influencing employees of other member firms”

In general, gifts cannot be in excess of $300 (as of 2026) per individual. If a firm has 100 representatives, another firm could send each of them a $50 gift; it is not combined, it is individual agent/representative basis. This could be a gift certificate.

Event gifts, like a wedding, birth of a child, something like that, don’t count. These are rare events, and the representative does need to be careful. If they usually give clients a $450 salad utensil set, and a really good client, or someone they are trying to impress, is getting married, and suddenly they want to buy them a Lamborghini. Yeah, that doesn’t work.

Business-related expenses are also different. If ABC Money Managers sends the top 20 reps at MNO Broker Dealer gold-plated $500 gold pens, that are engraved with “ABC Money Managers”, well that isn’t a gift!! That’s a marketing expense! Every time the agent uses that pen in front of a client, or gives that pen to the client to sign and they see “ABC Money Managers”, that is basically a billboard! It has to be marked/branded in such a way that removing the logo would destroy the item. A literal brand on a leather jacket, burned in, would work. To remove that, would require destroying the jacket. A sticker, or a simple sewn patch would not work. Do not wait for your favorite third party company to send you a vinyl-wrapped Ferrari. They can’t, and won’t, do that 😉

Bets, friendly bets, are generally not going to be allowed. If you and a client are at a golf game, and one of you goes “Betcha $5 you can’t make that putt”, or something, no one is going to be coming after you for a couple of bucks on a day. Again, if you somehow lose 60 bets like that, that is now $300. There is no way you making a bet with a client for $1000 or something silly is allowable, you could easily throw the event, or they could, and suddenly it’s a bribe. In general though, bets are not allowed with clients, again, de minimus wouldn’t be a problem.

All of this is well and good, but intention and purpose still matter. If someone technically follows the rules, but is doing it for nefarious reasons, it would not be allowable. Included in the unethical intentions would include trying to manipulate markets or media to print or do things in the violator’s benefit.

A regulated entity engaging in municipal securities activities for or on behalf of a municipal entity in connection to an offering, is prohibited from getting reimbursed for costs related to entertaining persons affiliated with the municipal entity from the proceeds of the municipal offering.