Series 24 Exam

From Exampedia
Jump to: navigation, search

History

The General Securities Principal Examination (known as the Series 24) was first implemented by the National Association of Securities Dealers (NASD) in 1979.[1] Administration of the Series 24 has continued under the successor organization of the NASD, the Financial Industry Regulatory Authority (FINRA), since FINRA was organized in 2007.[2]

The Series 24 is periodically updated to ensure it covers the most up-to-date job functions and knowledge required by General Securities Principals. The most recent revision to the examination's content outline was published in 2014. The content outline was revised based on a job analysis study which included surveying practicing General Securities Principles.[3] Due to the fact that the financial industry changes rapidly over time and that laws and regulations are continually revised, the pool of questions for the Series 24 exam is also constantly under revision, with new test items being created, assessed, and implemented and old items being revised or removed every year.[3]

Function of the Test

Series 24 Study Guide

The Series 24 is a qualification exam for General Securities Principals, who comprise one of the several categories of principal registration under FINRA/NASD rule 1022.[4] The Series 24 examination tests candidates on knowledge, skills, and competencies related to managing or supervising an investment bank or securities business.[3][4] Candidates for General Securities Principal status must have achieved registration as a General Securities Representative or (depending on the specific role of the supervisory position) as a Limited Representative in an area such as Investment Banking or Corporate Securities.[4]

Candidates for the Series 24 examination must be sponsored by and associated with a FINRA member firm. There are no prerequisites for the examination.[3]

FINRA does not appear to publish statistics regarding how many candidates take the Series 24 each year or how many candidates pass the examination.

Test Administration

Series 24 Flashcards

The Series 24 is administered year-round at Pearson VUE and Prometric test centers.[5][6] The fee to take the examination is $115.[7] Candidates must be directly sponsored by a FINRA member firm in order to take the examination; independent candidates cannot take the exam.[3]

The time limit for the 150-question exam is three hours and forty-five minutes.[7][3] Upon completing the examination, candidates receive both on-screen test results as well as a paper copy of the test results. The score report includes a breakdown of performance by content area to help candidates identify their areas of relative strength and weakness.[3]

Unsuccessful candidates who wish to retake the examination must wait 30 days before retaking the exam. Candidates who fail the exam three or more times must wait 180 days between test administrations. There is no limit to the number of times a candidate may take the Series 24; however, for all retakes, the candidate's firm must re-request the examination, and another examination fee will be charged.[8]

Candidates with disabilities who require special testing accommodations must contact FINRA directly and submit FINRA's Special Accommodations Eligibility Questionnaire and Special Accommodations Verification Request Form.[5]

Test Format

Test Structure

The Series 24 test is made up of 160 questions, ten of which are unscored, pretest questions. All 160 questions have to do with five main topics: Supervision of registration of broker-dealer and personnel management activities; Supervision of general broker-dealer activities; Supervision of retail and institutional customer-related activities; Supervision of trading and market making activities; and Supervision of investment banking and research. All 160 questions are multiple choice.[9]

Test Environment

The Series 24 exam takes place at Pearson VUE and Prometric Exam Centers. There, candidates must provide a government issued ID that contains a signature and picture as well as a photograph. Test-takers are not allowed to bring any notes, bags, phones, books, etc... into the testing room. A four-function calculator, dry erase board, and dry erase pen will be provided by the testing center.[10]

Test Content

  • Series 24 Sample Questions
  1. And underwriter that assumes full responsibility and financial liability for an issue is involved in what type of underwriting commitment?
    A. Fill or Kill
    B. Firm commitment
    C. Best efforts commitment
    D. Stand by commitment
  2. All of the following are requirements for a stock or company to be listed on the NYSE except:
    A. There must be a national public interest for ownership and trading in the company
    B. There must be a minimum of 1,100,000 publicly held shares
    C. The company must have pre-tax earnings in the previous year of at least $5,000,000
    D. The company has at least 2,000 shareholders, each holding at least 100 common shares
  3. FINRA Rule 6541 protects customer limit orders by:
    A. Disallowing firms from placing limit orders for customers
    B. Ruling that customer limit orders must be placed ahead of the firm's limit orders
    C. Disallowing firms from placing their own limit orders
    D. Ruling that a firm's limit orders must be placed ahead of the customer's limit orders
  4. All of the following are true regarding variable annuities except:
    A. They are more susceptible to inflation than fixed annuities
    B. The value of the annuity is based on the value of the underlying securities it holds
    C. Compared with fixed annuities, variable annuities are more likely to produce capital gains
    D. Payouts of the annuity will be based on the value of the underlying securities
  5. Securities that are sold outside the U.S. to non U.S. residents are exempt from SEC registration based on
    A. Regulation S
    B. Regulation T
    C. Regulation A
    D. Regulation D
  6. In order to ensure timely and accurate reporting of quotations in the OTC market, FINRA requires market makers report NASDAQ trades how quickly after execution?
    A. Immediately in real time
    B. 10 seconds
    C. 1 minute
    D. 90 seconds

Scoring

The Series 24 consists of 150 scored multiple-choice questions. The content on the Series 24 is distributed as follows:

Distribution of questions on the Series 24[3]
Job Function # of Items
Supervision of Registration of the Broker-Dealer
and Personnel Management Activities
9
Supervision of General Broker-Dealer Activities 45
Supervision of Retail and Institutional Customer
Related Activities
32
Supervision of Trading and Market Making Activities 32
Supervision of Investment Banking and Research 32
Total 150

In addition to the 150 scored questions, every exam contains ten unmarked, unscored pretest questions which are being assessed for inclusion on future versions of the Series 24.[3]

Candidates must answer at least 105 of the scored questions correctly (70%) to pass the exam. Guessing is not penalized. Although the score report for the Series 24 breaks down candidates' performance on each of the five content areas of the examination, candidates do not need to "pass" every content area to pass the full examination. Poor performance in one content area may be offset by good performance in other content areas to yield a passing score.[3]

Answers to Sample Questions

1;B 2;C 3;B 4;A 5;A 6;B

References

  1. ^ FINRA: Implementation Dates of Qualification Examinations February 26 2015
  2. ^ FINRA - NASD and NYSE Member Regulation Combine to Form the Financial Industry Regulatory Authority - FINRA February 26 2015
  3. ^ a b c d e f g h i j FINRA - General Securities Principal Qualification Examination (Series 24) February 26, 2015
  4. ^ a b c FINRA Manual - NASD Rules - 1022. Categories of Principal Registration February 26 2015
  5. ^ a b FINRA - Registration, Testing and Qualifications February 26 2015
  6. ^ Prometric - FINRA Policies and Procedures February 26
  7. ^ a b FINRA - FINRA Administered Qualification Examinations February 26 2015
  8. ^ FINRA - Qualifications Frequently Asked Questions (FAQ) – Examinations January 29 2015
  9. ^ Taking the Examination 02 April 2015
  10. ^ Day of Exam 02 April 2015