Michigan Office of Administrative Hearings and Rules  
Administrative Rules Division (ARD)  
MOAHR-Rules@michigan.gov  
REQUEST FOR RULEMAKING (RFR)  
1. Department:  
Licensing and Regulatory Affairs  
2. Bureau:  
Corporations, Securities, & Commercial Licensing  
3. Promulgation type:  
Full Process  
4. Title of proposed rule set:  
Securities  
5. Rule numbers or rule set range of numbers:  
R 451.1.1 - R 451.6.2  
6. Estimated time frame:  
12 months  
Name of person filling out RFR:  
Mitchell Page  
Email of person filling out RFR:  
PageM6@michigan.gov  
Phone number of person filling out RFR:  
517-241-6659  
Address of person filling out RFR:  
2407 N. Grand River Ave, Lansing, MI 48906  
7. Describe the general purpose of these rules, including any problems the changes are intended  
to address.  
The Corporations, Securities, and Commercial Licensing Bureau (CSCL) proposes to amend the  
Securities Rules (Rule 451.1.1 - 451.6.2) to incorporate model rules adopted by the North American  
Securities Administrators Association (NASAA) in 2022 and 2023. The model rules 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 two MUSA registration categories at issue are agents who effect securities transactions and  
register pursuant to MCL 451.2402, and investment adviser representatives (IAR or IARs) who advise  
clients about how to invest in securities and register pursuant to MCL 451.2404.  
Agents generally must be registered with both a self-regulatory organization (often FINRA) and the  
states where they conduct business. In Michigan, agents must take and pass an examination or  
combination of examinations required by rule 451.4.9 to become registered.  
IARs are generally only required to register with relevant state securities authorities where they do  
business, and in Michigan must take and pass an examination or combination of examinations  
required by rule 451.4.12.  
Under the current rules 451.4.9 and 451.4.12 in Michigan, agents and IARs must have taken and  
passed relevant examinations no more than two years before the application for registration is filed  
MCL 24.239  
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with the administrator, unless the person qualifies for an examination waiver. For both agents and  
IARs, if the individual was registered in Michigan or another state with the same examination  
requirements within the two years prior to the application, then the individual is not required to comply  
with the examination requirements.  
Under the current framework, an examination remains valid if the individual is registered with and  
employed by or associated with a broker-dealer (for an agent) or an investment adviser (for an IAR),  
and then for two years following 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.  
8. Please cite the specific promulgation authority for the rules (i.e., department director,  
commission, board, etc.).  
MCL 451.2102(a) under the MUSA defines “administrator” as the Office of Financial and Insurance  
Regulation. Executive Reorganization Order No 2012-6, MCL 445.2034, transferred the Securities  
Division of the Office of Financial and Insurance Regulation to the Department of Licensing and  
Regulatory Affairs on November 6, 2012. The Department Director delegated authority as the  
Administrator of the MUSA to the Corporations, Securities, and Commercial Licensing Bureau  
Director.  
MCL 451.2412(5) states, “A rule or order under this act may require that an examination, including an  
examination developed or approved by an organization of securities regulators, be successfully  
MCL 24.239  
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completed by a class of individuals or all individuals. An order under this act may waive an  
examination as to an individual and a rule under this act may waive an examination as to a class of  
individuals if the administrator determines that the examination is not necessary or appropriate in the  
public interest and for the protection of investors.”  
MCL 451.2605(1)(a) and (c) allow the Administrator to, after notice and comment, adopt and amend  
rules necessary or appropriate to carry out the MUSA, and may by rule classify securities, persons,  
and transactions, and adopt different requirements for different classes.  
A. Please list all applicable statutory references (MCLs, Executive Orders, etc.).  
MCL 451.2102, MCL 451.2102a, MCL 451.2102c, MCL 451.2401, MCL 451.2402, MCL  
451.2403, MCL 451.2404, MCL 451.2405, MCL 451.2406, MCL 451.2407, MCL 451.2408,  
MCL 451.2409, MCL 451.2411, MCL 451.2412, MCL 451.2601, MCL 451.2605, MCL  
451.2608, Executive Reorganization Order NO. 2012-6, MCL 445.2034.  
B. Are the rules mandated by any applicable constitutional or statutory provision? If so,  
please explain.  
No.  
9. Please describe the extent to which the rules conflict with or duplicate similar rules,  
compliance requirements, or other standards adopted at the state, regional, or federal level.  
These rules will not conflict with or duplicate similar rules, compliance requirements, or other  
standards adopted at the state, regional, or federal level. They would promote uniformity and  
consistency with parallel requirements of other regulatory bodies.  
10. Is the subject matter of the rules currently contained in any guideline, handbook, manual,  
instructional bulletin, form with instructions, or operational memoranda?  
The Securities Rules are available on CSCL’s website, www.michigan.gov/securities, under the  
Spotlight section.  
11. Are the rules listed on the department’s annual regulatory plan as rules to be processed for  
the current year?  
No.  
12. Will the proposed rules be promulgated under Section 44 of the administrative procedures act  
of 1969, 1969 PA 306, MCL 24.244, or under the full rulemaking process?  
Full Process  
13. Please describe the extent to which the rules exceed similar regulations, compliance  
requirements, or other standards adopted at the state, regional, or federal level.  
The rules do not exceed similar regulations, compliance requirements, or other standards adopted at  
the state, regional, or federal level.  
14. Do the rules incorporate the recommendations received from the public regarding any  
complaints or comments regarding the rules? If yes, please explain.  
The rules do not incorporate recommendations received from the public. The rules are based on  
NASAA model rules for which NASAA sought and received public comment in its drafting and  
adoption process.  
15. If amending an existing rule set, please provide the date of the last evaluation of the rules and  
the degree, if any, to which technology, economic conditions, or other factors have changed  
the regulatory activity covered by the rules since the last evaluation.  
The rules were last amended with an effective date of February 16, 2022. FINRA adopted its MQP in  
March 2022, which led NASAA to draft and adopt exam validity extension program model rules for  
broker-dealer agents in September 2022, and for investment adviser representatives in April 2023.  
CSCL seeks to incorporate these updated rules into its rule set under the MUSA.  
16. Are there any changes or developments since implementation that demonstrate there is no  
continued need for the rules, or any portion of the rules?  
No.  
MCL 24.239  
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17. Is there an applicable decision record (as defined in MCL 24.203(6) and required by MCL  
24.239(2))? If so, please attach the decision record.  
No  
Based on the information provided in this RFR, MOAHR concludes that there are sufficient policy and legal  
bases for approving the RFR. The RFR satisfies the requirements of the administrative procedures act of  
1969, 1969 PA 306, MCL 24.201 to 24.328, and Executive Reorganization Order No. 2019-1, MCL 324.99923.  
MCL 24.239  
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