The Series 24 license, also known as the General Securities Principal Examination, is a certification that allows the holder to supervise and manage branch activities at a broker-dealer. This includes overseeing regulatory compliance, managing trading and market-making activities, handling customer accounts, and ensuring proper sales practices.
Prerequisites for the Series 24 License
Basic Requirements
To sit for the Series 24 exam, candidates must first possess one of the following prerequisite licenses:
- Series 7: General Securities Representative
- Series 62: Corporate Securities Representative
- Series 79: Investment Banking Representative
Additional Considerations
Candidates should have a comprehensive understanding of securities regulations and a strong background in the financial services industry. It is advisable for candidates to have experience in financial management or similar supervisory roles.
Exam Details
Structure of the Exam
The Series 24 exam consists of 150 multiple-choice questions that must be completed within a 3 hour and 45-minute timeframe. The exam covers five main areas:
- Supervision of Investment Banking, Underwriting, and Research
- Supervision of Trading and Market Making
- Supervision of Brokerage Office Operations
- Sales Supervision, General Supervision of Employees, Regulatory Framework
- Compliance with Financial Responsibility Rules
Scoring and Passing Rate
A score of 70% or higher is required to pass the exam. According to FINRA, the pass rate for first-time test takers varies, reflecting the rigorous nature of the exam.
Difficulty Level
Based on Candidate Feedback
The Series 24 exam is considered challenging due to its comprehensive coverage of supervisory practices and strict regulatory standards. Most candidates spend several months preparing for the exam, utilizing study materials, online courses, and practice exams.
Study Recommendations
Candidates are encouraged to:
- Dedicate significant time for preparation, typically 100-150 hours.
- Enroll in preparatory courses offered by financial education providers.
- Use a combination of study guides and practice questions to ensure understanding of key concepts.
Historical Context and Applicability
Evolution of the License
The General Securities Principal Examination was introduced to ensure that those in supervisory roles at broker-dealers have the necessary knowledge and skills to maintain regulatory compliance and uphold industry standards.
Key Roles and Responsibilities
Holders of the Series 24 license can take on several critical roles, including:
- Compliance Manager
- Branch Manager
- Supervisory Principal
Related Terms and Definitions
Series 7
The Series 7 license allows an individual to engage in the solicitation, purchase, and sale of all securities products, including corporate securities, municipal securities, options, and more.
Series 63
The Series 63 license, also known as the Uniform Securities Agent State Law Examination, is a North American Securities Administrators Association (NASAA) exam administered for state law registration.
Series 79
The Series 79 license entitles the holder to engage in investment banking and deal-making activities, including mergers and acquisitions, and corporate restructuring.
FAQs
What happens if I do not pass the Series 24 exam on the first attempt?
How can I schedule the Series 24 exam?
Is the Series 24 license valid indefinitely?
References
- Financial Industry Regulatory Authority (FINRA) - Series 24 Exam Information
- Securities and Exchange Commission (SEC) - Rules and Regulations
- North American Securities Administrators Association (NASAA) - Continuing Education Requirements
The Series 24 license is a pivotal certification for individuals aspiring to oversee and manage branch activities at a broker-dealer. With stringent prerequisites, a comprehensive exam, and considerable difficulty, it plays a crucial role in ensuring that supervisory personnel are well-equipped to uphold regulatory standards and maintain industry integrity.
