The Operations Professional Qualification Exam is coming in 2011, according to John Kalohn, Vice President of Testing at FINRA.
The Operations Professional Qualification Exam is coming in 2011, according to John Kalohn, Vice President of Testing at FINRA. As outlined at the January ARM conference in Sarasota, FINRA received over 50 “mostly positive” comment letters in response to the 2010 FINRA “Regulatory Notice 10-25” re the exam proposal. Some commenters argued that the new registration would be “overly burdensome” and they suggested that firms could “accomplish the same goals through internal training and written supervisory procedures.” The exam committee of 40 individuals from “a broad cross-section of FINRA members” has reviewed the comment letters and is working on completing the content outline for the exam and submitting a rule filing to the SEC. Once the SEC gives the green light, FINRA expects to make the content outline available, “probably in mid-2011.” Testing will begin approximately 90 days later.
According to Kalohn, the exam will be “different, not job-focused” but instead will try to assess basic financial industry knowledge as that relates to operations. In particular, the exam will focus on professional conduct and ethical considerations, essential product and market knowledge, knowledge associated with operations activities, and the identification and escalation of “red flag” issues. FINRA says that the exam was motivated by a request from the SEC. “There is no question that this new registration exam is a direct result of Bernie Madoff,” says David Sobel, EVP and CCO at Abel/Noser in New York. “They want the back office to know the rules.”
Importantly, the new operations professional registration will be a requirement for those in a managerial or supervisory position and, per FINRA Regulatory Notice 05-48, it will apply to member broker-dealers and their affiliates (third party service providers).
At the January 2011 Association for Registration Management Sarasota conference, John Kalohn indicated that the new operations professional registration will require continuing education. The CE requirement will include three general modules plus one self-selected module based on 4–7 targeted job functions.
FINRA notes that “a significant number” of operations professionals will be exempt from the new qualification examination because they will have already taken an “acceptable alternative qualifying examination (i.e. Series 6, 7, 24 and others).”
For more information, please call Jeremy Solomon at 503 968 6777 or via email: J.Solomon@SolomonExamPrep.Com.