Effective October 17, 2011, new FINRA Rule 1230(b)(6) requires certain personnel involved in the back office operations of a broker-dealer to pass a FINRA qualification examination, designated as the Series 99, and subsequently register as an Operations Professional. The Rule further requires senior management having direct responsibility over such personnel to also register. Firms should review the responsibilities of certain employees with the following key aspects of the Rule in mind:

• Operations Professionals can be considered: (i) senior management with a direct responsibility over back office functions; (ii) supervisors or other personnel who are responsible for approving or authorizing work; and (iii) personnel with authority or discretion to commit a firm's capital or to authorize a contract or agreement on behalf of a firm as related to back-office functions.
• Personnel whose activities that perform a function that is "ancillary" or include activities that are supportive, solely clerical or ministerial to back office operations do not have to register.
• Existing personnel have until December 16, 2011 to register and until October 17, 2012 to pass the exam, during which time they may function as an Operations Professional.
• Personnel may register without taking the exam if they hold certain representative-level registrations (such as Series 7) or principal-level registrations (such as Series 24). These registrations must be current or held within two years of registering as an Operations Professional.
• New Personnel must be registered before engaging in any activities that require registration.

View Regulatory Notice on FINRA Rule 1230(b)(6)

FrontLine Compliance, LLC is a regulatory compliance consulting firm of former high-level regulatory insiders offering customized services to investment advisers, broker-dealers, hedge funds, private equity firms, investment companies, and insurance company affiliates. Staffed by former SEC and FINRA regulators, and chief compliance officers, FrontLine Compliance provides the kind of industry knowledge, experience and expertise on regulatory issues only available from well-seasoned insiders. For more information about the firm, please visit www.frontlinecompliance.com.

FrontLine Compliance, LLC
phone: 888-518-8070
email: info@frontlinecompliance.com
www.frontlinecompliance.com
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