Details on the FINRA Series 24 License Exam

What is the Series 24 License? In order to operate in a supervisory role at a brokerage firm, you must pass the Series 24 Licensing Exam.


So, what does the Series 24 License Exam cover?

Well, it’s called the General Securities Principal Examination  and is administered by FINRA (Financial Industry Regulatory Authority).

Its key purpose is to enable securities industries professionals to manage or supervise a securities brokerage office or branch.

Series 24 License Exam:

Before one gets a Series 24 License, s/he has to have sat and passed the Series 24 Exam. This exam is usually broken down into five sections:

  • Supervision of investment banking, underwriting and research
  • Supervision of trading and market making activities
  • Compliance with rules of financial responsibility
  • Supervision of brokerage office operations
  • Sales and general employee supervision

This exam comprises of 150 questions (with 10 extra un-scored questions). It takes 3.75 hours (225 minutes), and you’re required to attain at least a 70% score to pass (get 105 questions right).

Percentile-wise, this is how the test is divided:

  • Sales supervision, general supervision of employees and regulatory framework of FINRA covers 29% of the exam (43 questions)
  • Supervision of investment banking covers 22% (33 questions)
  • Supervision of trading and market making activities covers 21% (31 questions)
  • Supervision of brokerage office operations covers 19% (29 questions)
  • Compliance with financial responsibility rules covers 9% (14 questions)

Series 24 Exam

What are the Series 24 License Requirements?

Before you can register for the Series 24 License Exam, you ought to have already earned a Series 82, Series 62, Series 38, Series 37, Series 17, Series 79 or Series 7 exam. In addition, you’ll have to be sponsored by an existing FINRA member or, another SRO – a self-regulatory organization.

This is because the sponsorship and earning of this license is for a promoted position within a brokerage firm/branch.

So having experience/knowledge over activities you’re overseeing is critical. The fee is $120.

Objectives of Series 24 Exam:

Basically, this exam is administered so as to test the candidate’s knowledge of fiduciary obligations more so when trading clients’ accounts. Thus, it ascertains if one is capable of coping professionally with clients’ demands and disagreements.

Also reconciling disagreements between security brokers and management or, between security brokers themselves is another component. It therefore goes beyond simply knowing the regulations and rules that govern securities brokerage sales, operations and trading.

About FINRA:

FINRA is a financial securities industry that’s self-regulating. Its key responsibility is to carry out compliance and regulatory oversight to thousands of brokerage firms and hundreds of thousands of branch offices and registered securities representatives in the country.

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Benefits of Passing the Series 24 Exam and Receiving the License:

There are many benefits of attaining this license. But the most important of all is that once you’ve received your Series 24 License, you can manage or supervise a wide range of branch activities. This includes REITs, venture capital, variable contracts and corporate securities as well as approving sales and advertizing literature.

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