What is Series 24?

The Series 24 test and license give the bearer the authority to oversee and control branch operations at a broker-dealer. The General Securities Principal Qualification Examination, as it is often called, was created to assess applicants’ knowledge and proficiency in choosing entry-level securities principals. After passing the test, supervisory responsibilities such as advertising, underwriting, and regulatory compliance over trading and market-making operations are permitted.

How the Series 24 Works

The Financial Industry Regulatory Authority (FINRA) administers the Series 24 test, including trading, client accounts, corporate securities, real estate investment trusts (REITs), and regulatory requirements. A candidate must pass the Securities Industry Essentials (SIE) test, the Series 24 exam, and one of the five representative-level qualification examinations (Series 7, 57, 79, 82, or 86/87) to be eligible for primary registration. Additionally, candidates may become eligible for the research principal registration by passing the Series 24 and Series 16 examinations but not the SIE.

The Series 24 Test

There are 150 scored questions on the test, and ten unscored questions dispersed randomly throughout the test are also included. A candidate must correctly answer at least 105 out of the 150 scored questions to pass. This corresponds to a 70% rating. The exam administrator provides dry-erase boards, pens, and electronic calculators. No additional study materials, calculators, or references are allowed in the examination room.

The test may be completed in a maximum of three hours and forty-five minutes by candidates. Before a candidate may register to take the test, a FINRA member company or other suitable firm must file a Form U4 and pay the $120 examination fee.

Particular Points to Remember

The five primary job responsibilities that a general securities principal does daily when employed by a broker-dealer are the categories into which the Series 24 material is divided. Among these job duties are:

• Supervision of the Broker-Dealer’s Registration and Personnel Management Activities (9 questions): This covers employing and registering related personnel, regulatory requirements and exemptions, and the distinctions between different registrations.
• 45-question test on the supervision of general broker-dealer activities covers written supervisory processes, controls, and the creation, execution, and revision of company policies. It also covers the creation, assessment, and provision of goods and services, as well as oversight of the behavior of related parties, disciplinary measures, and compensation monitoring.
• Supervision of Retail and Institutional Customer-Related Activities (32 questions): This covers overseeing the creation of new accounts and the upkeep of current ones, in addition to keeping an eye on public speaking engagements and other communications. It also entails checking account activity, suggestions, and transactions for accurate disclosures.
• Thirty-two questions: Supervision of Trading and Market-Making Activities: This covers order entry, routing, and execution supervision; it also covers correct trade booking and settlement, and it includes an execution review for compliance.
• The creation and upkeep of rules, guidelines, and controls about investment banking operations and research are included in the supervision of investment banking and research (32 questions). In addition, investor disclosures, pitch books, and marketing materials must be examined and approved.

Authority for Financial Industry Regulation, “Series 24: General Securities Principal Exam.”

Is the Series 24 exam difficult?

Series 24 is a highly challenging test. While there are no official pass rates or statistics, a quick search will yield forums of those who have taken the test, and most people agree that it is one of the most complex financial exams, requiring a significant time investment in studying and a thorough comprehension of the material needed to obtain the necessary 70% passing grade.

What is the pass rate for the test?

There is no reported pass rate for Series 24. Many test-takers believe the exam is quite challenging compared to the preparatory tests. For this reason, both FINRA and study guides suggest giving yourself plenty of time to be ready for the challenging test.

What Does It Take to Get Extra Time on the Series 24 Exam?

Regarding additional time for the Series 24 test, something needs to be added to the FINRA website. Nonetheless, the test is set up and organized so that candidates have enough time to complete every question and return to those needing clarification.

Does having a Series 24 mean I need a Series 79?

Passing a Series 24 test requires completing several preparatory exams, including the Series 79 exam. SIE and Series 7, SIE and Series 57, SIE and Series 82, and SIE and Series 86 and 87 may be acquired. As a stand-alone requirement, you can skip the SIE and a complement and only take Series 16. The principal registration you might get if you have Series 79 and the SIE is the Investment Banking Principle (BP).

The Final Word

Before a candidate may take the challenging the test, they must meet several requirements. A FINRA member or another appropriate self-regulatory entity must sponsor a candidate. To control compliance for advertising, market making, trading, and underwriting, those who choose to take the test do so.

Conclusion

• The test is required to become competent at overseeing branch operations.
• FINRA specifies the requirements for earning a Series 24, which include passing numerous investment tests, such as Series 7 and Series 79.
• There are 150 scored questions in the Series 24 test.
• The part of the exam with the most questions is general broker-dealer operations supervision.
• It’s a very challenging test.