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News July 5, 2004 Issue

NASD Proposes to Lift Grandfathering for Regulatory Element CE

Approximately 135,000 NASD registered persons currently are exempt from the NASD’s Regulatory Element continuing education requirements.

That could be changing.

Last week, the NASD proposed rule changes that would eliminate the two categories of exempted persons: people who were "grandfathered" in 1995 or "graduated" in 1998 (at the time, to qualify for the exemption, those folks must have been registered for at least ten years with no significant disciplinary history for the past ten years).

Why the proposed change? The NASD’s Securities Industry/Regulatory Council on Continuing Education, comprised of SRO and industry participants, decided that there is "great value in exposing all industry participants to the benefits of the Regulatory Element, in part because of the significant regulatory issues that have emerged over the past few years."

The NYSE has approved a similar rule change and is waiting for SEC approval, said a spokesperson.