Introduction
In response to the financial crisis of 2008, Congress passed the Dodd-Frank Act, which, among other things, required “municipal advisors” to register with the Securities and Exchange Commission. The new law required the Municipal Securities Rulemaking Board (MSRB), the municipal securities self-regulatory organization, to create a new registration category called a “municipal advisor principal.” A municipal advisor principal is an employee of a municipal advisor who is directly engaged in the management, direction or supervision of municipal advisory activities and the firm’s associated persons.
To qualify these principals, the MSRB created a new securities qualification exam called the Municipal Advisor Principal Qualification Exam (Series 54). From March 2019 until July 2019, the MSRB is offering a “pilot” of the new exam to try out its bank of exam questions and to determine a passing score for the permanent exam. In return for being a guinea pig, anyone who takes and passes the Series 54 pilot exam will be qualified as a municipal advisor principal and will not be required to take the permanent Series 54 exam.
Once you’ve passed the Series 54 exam, you are qualified to supervise associates who are conducting municipal advisory business. You may need to manage individuals who work in multiple capacities relating to municipal entities. A key reason securities exams exist is to make sure that securities professionals know and follow the rules. The rules are a big part of the Series 54, for sure. But becoming registered in the Municipal Advisor Principal Qualification category is about more than learning to play by the rules; it means you are expected to be competent in your supervisory role. For that reason, passing the Series 54 is not easy; it will require you to study and master a wide range of municipal advisory knowledge. The Series 54 Examination is a high bar, but once you’ve hurdl