What is the Series 24?
The Series 24 is an exam and license that enables holders to supervise and manage branch activities at a broker-dealer. Also known as the General Securities Principal Qualification Examination, it tests the knowledge and competency of candidates aspiring to become entry-level securities principals. Supervisory activities post-exam include regulatory compliance over trading, market-making, underwriting, and advertising.
Key Takeaways
- You need to pass the Series 24 exam to qualify for managing branch activities.
- Prerequisites include various investment exams like Series 7 and Series 79.
- The exam features 150 scored questions.
- Supervising general broker-dealer activities constitutes the largest section of the exam.
- This is a highly challenging exam.
How the Series 24 Works
Administered by the Financial Industry Regulatory Authority (FINRA), the Series 24 exam covers topics such as corporate securities, real estate investment trusts (REITs), trading, customer accounts, and regulatory guidelines. To be eligible for principal registration, candidates must pass the Series 24 exam, Securities Industry Essentials (SIE) exam, and one of the following five representative-level qualification exams: Series 7, 57, 79, 82, or 86/87.
The Series 24 Exam
The examination comprises 150 scored questions and 10 additional unscored questions, randomly mixed throughout the test. A passing score requires correctly answering at least 105 scored questions, equating to 70%. Candidates have a maximum time of three hours and 45 minutes to complete the exam. Registration can be done by a FINRA member firm or equivalent by submitting a Form U4 and the $120 examination fee.
Exam Content Breakdown
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Supervision of Registration of the Broker-Dealer and Personnel Management Activities (9 questions): Covers regulatory requirements, exemptions, and the hiring and registration of associated persons.
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Supervision of General Broker-Dealer Activities (45 questions): Focuses on firm policy development, written supervisory procedures, disciplinary actions, and supervision of compensation and services.
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Supervision of Retail and Institutional Customer-Related Activities (32 questions): Includes supervision of new account openings, transaction reviews, and public communications.
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Supervision of Trading and Market-Making Activities (32 questions): Covers order entry, trade execution, booking, and settlement, along with compliance checks.
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Supervision of Investment Banking and Research (32 questions): Encompasses policy development related to investment banking activities and research, along with investor disclosures and marketing materials.
How Difficult is the Series 24 Exam?
The Series 24 is widely considered one of the toughest financial exams. While official pass rates are not published, anecdotal evidence and forums suggest a high level of difficulty. Deep understanding and substantial study time are required to meet the 70% passing mark.
Series 24 Pass Rate
Though there are no official statistics on pass rates, many who have taken the exam report its intensity. Extended preparation is recommended by FINRA and study prep courses due to the exam’s challenging nature.
Requirements for Additional Time
FINRA’s guidelines do not offer specific details on granting additional time for the Series 24 exam. However, the test is designed to allow sufficient time for completion of all questions, with opportunities to revisit uncertain answers.
Relationship Between Series 24 and Series 79
Yes, the Series 79 is one of the required exams to take before the Series 24. Alternatives include SIE with Series 7, Series 57, Series 82, or Series 86/87. Bypassing the SIE is possible by sitting for the Series 16 as a standalone prerequisite.
The Bottom Line
The Series 24 exam is a demanding exam with various prerequisites. Candidates need sponsorship from a FINRA member. Those who pass the exam are able to oversee compliance for advertising, market-making, trading, and underwriting.
Related Terms: Series 7, Series 79, Series 57, Securities Industry Essentials, Investment Banking Principal.
References
- Financial Industry Regulatory Authority. “Series 24 – General Securities Principal Exam”.
- Financial Industry Regulatory Authority. “Changes to Qualification Examination Fees”.
- Financial Industry Regulatory Authority. “General Securities Principal Qualification Examination (Series 24)”, Page 5.
