CISI, FINRA Sign MoU For New RDR Qualifications

Wendy Spires

9 August 2012

The UK’s Chartered Institute for Securities & Investment and FINRA, the US regulator, have signed a memorandum of understanding which will provide FINRA member, UK-based retail investment advisors with a programme to meet the new UK exam standards.

Under the UK Financial Services Authority’s Retail Distribution Review package of reforms, additional learning content and adherence to mandated ethical standards will be required by all holders of the US Series 7 qualification. This will be the case whether they are already authorised by the FSA or are seeking FSA authorisation as a retail advisor in securities and/or derivatives.

The MoU means that potentially FINRA will offer CISI exams, in particular those required to meet the FSA benchmark standard for qualification as a retail investment advisor in securities, the organisations said in a statement. Also, FINRA members holding the Series 7 qualification will be offered the associate member CISI grade of membership or full membership where they satisfy qualification and experience criteria.

“We have worked cooperatively with CISI over the years and this MoU brings us closer together. Given today’s global markets, we view the MoU as an important step in recognising how qualification bodies must work together to help ensure the highest level of competence for intermediaries dealing with public customers,” said John Kalohn, vice president of testing and continuing education at FINRA.

The RDR will mean that from 1 January 2012 all UK advisors will have to be QCF Level 4 qualified as a minimum . The new mandatory qualification standard has been one of the more controversial elements of the RDR reforms, since it has forced many experienced advisors back into the exam hall for the first time in decades. However, many firms have taken the initiative even further and now require all their advisors to be qualified at Level 6.