Appeal to the California DFPI

I have a public regulatory appeal to make, specifically to the California Department of Financial Protection and Innovation.? This is an appeal on behalf of all mothers and caregivers who work in the securities industry.

My friend and colleague, Caroline Hayes, penned an excellent article in Investment News in December 2020, explaining the problem as she faced it:?securities regulations “time out” registered representatives who are not registered with a broker-dealer for a two year period.? If someone wants back into the business after taking time off or working in another business for two years, they must retake multiple licensing exams, which for some can be a career death sentence.??As Caroline wrote: “...when I wanted to return to the workforce, I first had to convince an employer to hire me after an extended period of unemployment, a difficult hurdle for any professional. When I found a company interested in hiring me, my employer had to accept that I would be unable to perform the majority of my required responsibilities for a considerable period of time.”?

These statutory time requirements ---- which is all that they are, since knowledge, experience, and professional credentials do not factor into the rules --- disproportionately affect women who take time away from working at a securities firm to work as full-time mothers and caregivers.

Since Caroline’s article was published, FINRA has modified its registration rules to create a pathway for securities industry professionals to retain their licenses.??Good for FINRA and props to its leadership team for making this rule change a priority.? It was long overdue, especially given the disproportionate harm experienced by professional women.?FINRA rightly observed that the new rule would “enhance diversity and inclusion in the securities industry by attracting and retaining a broader and diverse group of professionals.”

Surprisingly, the DFPI appears to be tone-deaf on this issue, recently informing my firm, in regard to one of our registered representatives --- a mother who took two years and two months away from the business to care full-time for her young children: “California will not make an exception to the 2-year registration period for the 63, regardless of the reason.”??Why not?? FINRA granted a waiver, and so did the State of Utah's Division of Finance.?

How does California’s position serve anyone’s interest, and how can the DFPI square its capricious standard with the Secretary of State’s public statements that California cares deeply about gender equity in the workplace and the professional advancement of women? ?Of course my question is rhetorical, because nobody is served by this intransigent approach:?not our employee, not investors (our rep is a highly capable, experienced professional whose ability to pass the Series 63 will not be an issue), and not the State of California.?

Hence the reason for my appeal.?California needs to step up its game.?DFPI can do better, and it should do better.