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The general securities principal exam, commonly referred to as the Series 24 exam, is administered by the U.S. Financial Industry Regulatory Authority (FINRA) which qualifies a registered individual to supervise or manage branch activities such as corporate securities, REITs, variable contracts, and venture capital; a general principal may also approve advertising and sales literature, including communications regarding municipal securities. The exam covers topics such as supervision of investment banking, trading, customer accounts, and the primary/secondary markets.
A Series 24 license does not qualify an individual to function as a:
The Series 24 Exam is made up of 150 questions. Candidates have up to 3.5 hours to take the exam. 70% (105 correct answers) is considered a passing grade. In order to take the Series 24 exam, a candidate must be sponsored by a member firm of FINRA or another SRO (self-regulatory organization).
| Test breakdown | Number of questions | % of exam |
|---|---|---|
| Supervision of investment banking activities | 33 | 22% |
| Supervision of trading and market making activities | 31 | 21% |
| Supervision of brokerage office operations | 29 | 19% |
| Sales supervision; general supervision of employees; regulatory framework of FINRA | 43 | 29% |
| Compliance with financial responsibility rules | 14 | 9% |
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A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition. In some jurisdictions the term specifically excludes financial instruments other than equities and fixed-income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants.
The U.S. Securities and Exchange Commission (SEC) is a large independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market manipulation.
A stockbroker is a regulated broker, broker-dealer, or registered investment adviser who may provide financial advisory and investment management services and execute transactions such as the purchase or sale of stocks and other investments to financial market participants in return for a commission, markup, or fee, which could be based on a flat rate, percentage of assets, or hourly rate. The term also refers to financial companies, offering such services.
The Municipal Securities Rulemaking Board (MSRB) writes investor protection rules and other rules regulating broker-dealers and banks in the United States municipal securities market, including tax-exempt and taxable municipal bonds, municipal notes, and other securities issued by states, cities, and counties or their agencies to help finance public projects or for other public policy purposes.
The Chartered Financial Analyst (CFA) program is a postgraduate professional certification offered internationally by the American-based CFA Institute to investment and financial professionals.
World Financial Group (WFG) is a multi-level marketing company based in Johns Creek, Georgia, a suburb of Atlanta, which sells investment, insurance, and various other financial products through a network of distributors in the United States, Canada, and Puerto Rico. It is wholly owned by Aegon.
A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory body in order to provide advice.
A self-regulatory organization (SRO) is an organization that exercises some degree of regulatory authority over an industry or profession. The regulatory authority could exist in place of government regulation, or applied in addition to government regulation. The ability of an SRO to exercise regulatory authority does not necessarily derive from a grant of authority from the government.
The Uniform Combined State Law Examination also called the Series 66 exam is designed to qualify candidates as both securities agents and investment adviser representatives in the United States. It was developed by North American Securities Administrators Association (NASAA) and operated by the Financial Industry Regulatory Authority (FINRA).
The Uniform Securities Agent State Law Examination, commonly referred to as the Series 63, is developed by North American Securities Administrators Association (NASAA) and is administered by the Financial Industry Regulatory Authority (FINRA). The examination is designed to qualify candidates as securities agents in the United States; nearly all states require individuals to pass the Series 63 as a condition of state registration.
Uniform Investment Adviser Law Examination, also called the Series 65 exam, is a test taken by individuals in the United States who seek to become licensed investment adviser representatives. The exam covers topics necessary to provide investment advice to clients.
In the United States, the Series 7 exam, also known as the General Securities Representative Exam (GSRE), is a test for entry-level registered representatives, to buy or sell security products such as corporate securities, municipal fund securities, options, direct participation programs, investment company products and variable contracts. The Series 7 is administered by Financial Industry Regulatory Authority (FINRA), an industry regulatory agency.
In the United States, the investment company products/variable life contracts representative exam, is commonly referred to as the Series 6 exam. Individuals passing this multiple choice exam are licensed to sell a limited set of securities products:
A registered investment adviser (RIA) is a firm that is an investment adviser in the United States, registered as such with the Securities and Exchange Commission (SEC) or a state's securities agency. The numerous references to RIAs within the Investment Advisers Act of 1940 popularized the term, which is closely associated with the term investment adviser. An investment adviser is defined by the Securities and Exchange Commission as an individual or a firm that is in the business of giving advice about securities. However, an RIA is the actual firm, while the employees of the firm are called Investment Adviser Representatives (IARs).
Securities research is a discipline within the financial services industry. Securities research professionals are known most generally as "analysts", "research analysts", or "securities analysts"; all the foregoing terms are synonymous. Research analysts produce research reports and typically issue a recommendation: buy ("overweight"), hold, or sell ("underweight"); see target price. These reports can be accessed from a number of sources, and brokerages will often offer the reports free to their customers. Research can be categorized by the security type, as well as by whether it is buy-side research or sell-side research; analysts further focus on particular industries. Although usually associated with fundamental analysis, research also focuses on technical analysis, and reports will often include both. See also Financial analyst #Securities firms.
The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD) as well as the member regulation, enforcement, and arbitration operations of the New York Stock Exchange. The US government agency that acts as the ultimate regulator of the US securities industry, including FINRA, is the US Securities and Exchange Commission (SEC).
A registered representative, also called a general securities representative, a stockbroker, or an account executive, is an individual who is licensed to sell securities and has the legal power of an agent in the United States.
The Limited Representative – Investment Banking Exam, commonly referred to as the Series 79, is an examination administered by the U.S. Financial Industry Regulatory Authority (FINRA) for investment banking professionals. The examination is designed to qualify candidates for a limited scope of activities as investment bankers, without the full requirements of the General Securities Representative Exam.
Securities market participants in the United States include corporations and governments issuing securities, persons and corporations buying and selling a security, the broker-dealers and exchanges which facilitate such trading, banks which safe keep assets, and regulators who monitor the markets' activities. Investors buy and sell through broker-dealers and have their assets retained by either their executing broker-dealer, a custodian bank or a prime broker. These transactions take place in the environment of equity and equity options exchanges, regulated by the U.S. Securities and Exchange Commission (SEC), or derivative exchanges, regulated by the Commodity Futures Trading Commission (CFTC). For transactions involving stocks and bonds, transfer agents assure that the ownership in each transaction is properly assigned to and held on behalf of each investor.