(Dow Jones) The Financial Industry Regulatory Authority is seeking to expand its oversight of securities professionals to back-office workers who provide sales and trading support and handle investor assets.
Finra's regulatory requirements have traditionally applied to individuals, such as brokers, traders and investment bankers, who provide advice to customers and effect securities transaction.
The proposed rule, on which Finra is seeking comment, would extend registration, testing and continuing education beyond the frontline sales force to certain operations staff who support broker-dealers' businesses, the self-regulatory organization said Wednesday.
"These employees perform an integral role inside the firms, and their actions can have meaningful connections to the safety of customer funds, accounts and transactions, and the overall integrity of firm books and records," Finra said in a release.
Employees who may be required to register under the new proposal include those responsible for the development and approval of valuation models; manage trade confirmations, account statements, trade settlement and margin; or employees who oversee stock loan/securities lending, prime brokerage, receipt and delivery of securities, and/or financial regulatory reporting, Finra said.
Testing for this new category would cover three segments, Finra said: professional conduct and ethics, essential product and market knowledge, and knowledge associated with operational activities.
The Securities and Exchange Commission, which approves rule changes, has previously indicated support for a qualification examination for back-office staff, Finra said.
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