Definition
The Series 24, also known as the General Securities Principal Qualification Examination, is a certification given by the Financial Industry Regulatory Authority (FINRA). The examination measures the applicant’s knowledge of securities industry management and regulatory practices. It is required for individuals who manage or supervise any aspect of the broker-dealer’s securities business, such as branch office management.
Key Takeaways
- Series 24, officially known as the General Securities Principal Qualification Examination, is a licensing exam for those interested in managing or supervising investment banking or securities business for broker-dealers. Administered by the Financial Industry Regulatory Authority (FINRA).
- People who pass the Series 24 examination are eligible to register as General Securities Principals. This enables them to manage or supervise the investment banking or securities business of firms, such as the underwriting of securities, trading and market making, advertising, and the training of principals and representatives.
- The Series 24 exam consists of 150 multiple-choice questions and covers topics such as supervision of investment banking, trading, customer accounts, regulatory compliance and a wide range of securities products. Candidates are given 3 hours and 45 minutes to complete the test and a score of 70% or higher is required to pass.
Importance
The finance term “Series 24” refers to a specific securities license permitting the holder to supervise and manage branch activities in broker-dealers.
It’s important because it allows the person to oversee all regulatory compliance and sales practices within the broker-dealer business.
The Financial Industry Regulatory Authority (FINRA) administers the Series 24 exam and it covers topics like supervision of investment banking, trading and market making, brokerage office operations, and the handling of customer accounts.
Therefore, the Series 24 represents a significant level of authority and responsibility in the investment industry.
Explanation
The Series 24, formally known as the General Securities Principal Qualification Examination, serves a significant purpose within the finance industry, specifically in supervisory roles within broker-dealer firms.
Broker-dealer firms play a critical role in the financial industry by serving as intermediaries between buyers and sellers of securities, like stocks, and are regulated by the Financial Industry Regulatory Authority (FINRA). The Series 24 examination is used by FINRA to ascertain whether or not an individual is suited to manage or supervise a broker-dealer’s investment banking or securities business, thereby maintaining the integrity of financial markets.
In terms of its use, passing the Series 24 examination provides indication of an individual’s capacity and wherewithal to execute managerial functions within the brokerage industry.
This includes supervising the opening and maintenance of customer accounts, training registered representatives, keeping abreast of all the regulatory requirements, overseeing the firm’s record keeping, and making sure the firm is in compliance with all regulatory rules and procedures.
Thus, the Series 24 designation is a prerequisite for those who aim to occupy upper management or supervisory roles in broker-dealer companies, thereby proving their proficiency in regulatory, compliance, and operational aspects of the financial industry.
Examples of Series 24
The Series 24 is a financial certification for those who want to supervise or manage a branch within a brokerage firm in the United States. Here are three real-world examples of Series 24:
Brokerage branch manager: At a Wall Street brokerage firm, an individual might manage all the activities of the branch. This can include overseeing the sale of stocks, bonds, and other securities. To get to such a position, they would have to pass the Series 24 exam, among other qualifications, demonstrating their deep understanding of securities industry rules and management responsibilities.
Compliance officer: In a mid-sized investment company, the compliance officer ensures the company’s adherence to rules and regulations. In order to be eligible for such a position, passing the Series 24 exam among other qualifications would often be necessary.
Operations manager: In a small brokerage firm, the operations manager might oversee the company’s securities trading, deal with technical issues, and ensure the smooth functioning of the firm. This professional might be required to have Series 24 due to their supervisory nature of their role. It would demonstrate their knowledge of securities regulations, investment practices, and managerial responsibilities.
FAQ Section: Series 24
What is Series 24?
The Series 24 is an exam and license administered by the Financial Industry Regulatory Authority (FINRA) to qualify individuals to supervise or manage branch activities such as corporate securities, REITs, variable contracts, and venture capital; a Principal.
Who should consider taking Series 24 exam?
Individuals who want to supervise or manage certain operations within a brokerage and carry out responsibilities that require principal approval should consider taking the Series 24 exam.
What are the prerequisites for Series 24 exam?
Candidates must be associated with and sponsored by a Financial Industry Regulatory Authority (FINRA) member firm or other applicable self-regulatory organization (SRO) member firm to be eligible to take the Series 24 exam. Candidates must also have passed the securities Industry Essentials (SIE) exam and a representative-level qualification exam such as the Series 7.
What material is covered in the Series 24 exam?
The Series 24 exam covers topics like supervisory management, regulatory compliance, and operational processes, combo products and public-offering, investment banking, research, business processing and record keeping rules and regulations, and handling of customer accounts.
What is the format of the Series 24 exam?
The Series 24 exam consists of 150 multiple choice questions, and candidates have three and a half hours to complete the exam. A score of 70% is required to pass the exam.
Related Entrepreneurship Terms
- Securities and Exchange Commission (SEC)
- Financial Industry Regulatory Authority (FINRA)
- Registered Principal
- General Securities Principal
- Compliance Officer
