The Series 24, formally known as the General Securities Principal Qualification Examination, is an essential licensing exam administered by the Financial Industry Regulatory Authority (FINRA). This designation gives individuals the authority to supervise and manage various activities within a broker-dealer firm. Notably, it allows for higher-level supervisory authority compared to the branch-manager focus of the Series 9/10 exams.
Purpose and Scope
Authority and Responsibilities
The Series 24 examination certifies individuals to:
- Supervise the trading and market-making activities.
- Oversee the underwriting and distribution of securities.
- Supervise compliance with regulatory rules and firm policies.
- Manage investment banking and securities trading activities.
Comparison with Series 9/10
While the Series 24 exam grants broad supervisory powers, the Series 9/10 exams are designated for those in branch-level supervisory roles:
- Series 9/10: Focused on the management and compliance within a branch office.
- Series 24: Enables a more comprehensive supervision across broader aspects of a broker-dealer’s operations.
Requirements and Exam Details
Eligibility Criteria
Candidates must already have passed one of the requisite exams before taking Series 24, such as the Series 7 (General Securities Representative Exam) or Series 62 (Corporate Securities Limited Representative Exam).
Exam Structure
The Series 24 exam consists of 150 multiple-choice questions divided into five main sections:
- Supervision of Investment Banking, Underwriting, and Research: 19%
- Supervision of Trading and Market Making: 20%
- Supervision of Brokerage Office Operations: 17%
- Sales Supervision, General Supervision of Employees, Regulatory Framework: 28%
- Compliance with Financial Responsibility Rules: 16%
The candidate must achieve a passing score of at least 70%.
Historical Context
FINRA, formerly the National Association of Securities Dealers (NASD), introduced the Series 24 exam to ensure that supervisory professionals possess the knowledge and competence necessary to oversee a wide array of financial activities. This measure was part of a broader effort to enhance regulatory compliance and protect investors.
Applicability in the Financial Industry
Impact on Career
Obtaining the Series 24 license opens doors to higher-level supervisory roles within financial firms, enhancing career advancement opportunities. It is often a requirement for positions such as Compliance Director or Senior Operations Manager.
Regulatory Significance
FINRA mandates that certain supervisory roles require a Series 24 license as part of its effort to uphold the integrity of the securities market. Supervision by Series 24-qualified individuals helps ensure adherence to regulatory standards and ethical practices.
Related Terms
- Series 7: General Securities Representative Exam, a prerequisite for the Series 24.
- Series 9/10: Branch Manager Exams, focusing on branch-level supervision.
- FINRA: Financial Industry Regulatory Authority, the regulator responsible for Series 24.
FAQs
What are the prerequisites for taking the Series 24 exam?
How long is the Series 24 exam?
What is the pass rate for the Series 24 exam?
References
- FINRA Series 24 Exam Overview: FINRA
- “Securities Industry Essentials Exam For Dummies” by Steven M Rice
- U.S. Securities and Exchange Commission (SEC) guidelines
Summary
The Series 24 exam is a critical certification for those aiming to undertake supervisory roles within a broker-dealer firm. Unlike the Series 9/10, which is focused on branch-level management, Series 24 covers comprehensive supervisory responsibilities. Successfully passing the Series 24 exam not only denotes a significant level of expertise but also aligns with regulatory requirements, ensuring the integrity and smooth operation of financial markets.
