Introduction
If you have to take the Series 26 Investment Company and Variable Contracts Products Principal Qualification Exam, you have some idea of what to expect because you’ve already passed the Series 6 Investment Company and Variable Contracts Products Representative Exam or the Series 7 General Securities Representative Exam. You know that securities licensing exams require an understanding of the structure and operations of the U.S. capital markets, as well as knowledge of specific securities and industry rules, regulations, and practices. You know that serious study is required, and you know that once you’ve passed a FINRA exam, you are permitted to do something that few people are permitted to do: work in the securities industry, taking care of other people’s investments. Regulators want to prevent registered individuals from behaving like Agent 007, and that’s a key reason the “Series” exams exist—to make sure that everyone in the securities industry knows and plays by the rules. Rules are a big part of the Series 26. But passing the Series 26 and becoming an Investment Company and Variable Contracts Products Principal means you will be licensed to supervise others. That’s what is meant by “Principal.” As a result, the Series 26 exam focuses most on rules as they relate to supervision.
What subjects does the Series 26 exam test?
The Series 26 covers rules, regulations, and practices in product areas you will be licensed to supervise, including investment company products such as mutual funds and ETFs, closed-end funds at initial distribution, and variable annuities and variable life insurance.
FINRA divides the Series 26 into three “job functions” as follows:
- • Function One—Personnel Management Activities and Registration of the Broker-Dealer—16 questions
- • Function Two—Supervises Associated Persons and Oversees Sales Practices—49 questions
- • Function Three—Oversees Compl