Agency Report to JCAR -Page 2
termination of that employment. If the person re-applies for registration within two years of terminating prior
employment, their examination will be considered valid; otherwise, they would need to re-take their relevant
examinations or qualify for a waiver.
In March 2022, FINRA implemented its Maintaining Qualifications Program (MQP) to extend the validity of
examinations for FINRA registration purposes from two years to five years under certain circumstances. By enrolling
in the MQP and completing relevant continuing education each year, an agent’s examinations will remain valid for five
years without being employed by or associated with a broker-dealer, rather than two years without MQP participation.
Where an agent does not successfully participate in MQP, their examination validity still expires two years after they
terminate their employment with a broker-dealer.
In September 2022, NASAA promulgated a model rule available for state adoption to extend broker-dealer agent
examination registration validity from two years to five under relevant state laws; a companion model rule made clear
that MQP participation by an agent would not extend IAR examination validity. In April 2023, NASAA adopted another
model rule to extend the validity of examinations for IARs who enroll in a NASAA-administered program and complete
relevant continuing education.
Just like FINRA’s MQP, the NASAA model rules do not eliminate the two-year validity of relevant examinations;
rather, they provide an option for individuals to extend the validity to five years should the individual successfully
participate in the relevant programs. Adoption of the NASAA model rules will align agent requirements with parallel
FINRA requirements and ensure that IARs and agents are treated similarly in the examination validity space.
CSCL staff believes that adoption of these NASAA model rules extending examination validity for agents and IARs
who successfully participate is beneficial for members of industry and for investors alike. Agents and IARs may leave
employment with their firms for any number of reasons, including business reorganizations, career changes, and life
events like caring for children or elderly parents, or pursuing additional education. Doing so for more than two years
would require the person to retake their qualification examinations before re-associating with a broker-dealer or
investment adviser to prove their knowledge of industry requirements. However, if the individual is incentivized to
maintain their knowledge of industry standards, products, practices, and ethics during their disassociated period
through approved and documented continuing education, then the investor protection concern is reduced, and the
burden on the investment professional is minimized as well.
Incorporation of these new NASAA model rules would involve amendments to Rule 451.4.9 and Rule 451.4.12, along
with the addition of a new Rule 451.4.30.
2. Summary of the proposed rules:
The proposed rules incorporate model rules adopted by the North American Securities Administrators Association
(NASAA) in 2022 and 2023 that extend the validity of qualifications examinations for certain individuals registered
under the Michigan Uniform Securities Act (MUSA) if they enroll in a program administered by the Financial Industry
Regulatory Authority (FINRA) and/or NASAA, and complete continuing education applicable to their registration
categories. The rules would incentivize individuals to maintain their knowledge of industry standards, products,
practices, and ethics during their disassociated period through approved and documented continuing education.
3. List names of newspapers in which the notice of public hearing was published and publication
dates:
The Ann Arbor News – April 14, 2024
The Grand Rapids Press – April 14, 2024
The Marquette Mining Journal – April 15, 2024
4. Date of publication of the proposed rules and notice of public hearing in the Michigan Register:
4/15/2024
5. Date, time, and location of the public hearing:
MCL 24.242 and 24.245