Series 26

Exam Alert: The Series 99 Outline is Up!

FINRA recently posted the outline for the new Series 99 Operations Professionals Exam. The Madoff-inspired test is meant to ensure that Continue reading

FINRA recently posted the outline for the new Series 99 Operations Professionals Exam. The Madoff-inspired test is meant to ensure that operations professionals understand the fundamentals of the operations and regulations of a broker-dealer’s business. Click here to see the official outline.

What will be tested on the exam?

This exam will be three hours and consist of 110 questions (10 unscored) focusing on the following three topics:

Basic knowledge associated with the securities industry – basic questions about SROs, types of markets, types and characteristics of securities, broker-dealers versus investment advisers, suitability, and types of broker-dealers

Basic knowledge associated with broker-dealer operations – basic questions about types of accounts, maintenance of accounts, custody, anti-money laundering, margin, short sales, settlement, tax-reporting, and record-keeping

Professional conduct and ethical considerations – questions on FINRA conduct rules involving privacy, complaints, information barriers, written supervisory procedures, and registration

The test will be more heavily weighted toward the second category with 48 questions on broker-dealer operations. Securities industry knowledge is the second most important topic with 32 questions and the remaining 20 questions will be comprised of conduct and ethics. FINRA has yet to release the score that will be required to pass.

How difficult is the exam?

The exam outline contains 30 practice questions that represent the level of difficulty of the exam questions. Based on these sample questions the exam appears to be comparable to the Series 6 exam.

Who will have to take the exam?

Day One Professionals – Individuals who currently work as operations supervisors or operations managers or individuals who currently have the authority to materially commit capital in various back office functions. These individuals must be identified by December 16, 2011 and must register within 60 days of being identified. Those registered individuals will then have until October 17, 2012 to pass the Series 99 or a comparable exam such as the Series 6 or Series 7.

Non-Day One Professionals – Individuals who are not currently working in back-office activities, but plan to in the future. These individuals must pass the Series 99 or a comparable exam before engaging in back-office activities. They are not subject to the 12-month transition period.

Individuals who hold the following Series Exams will be exempt from taking the Operations Professionals Exam: Series 4, 6, 7, 9/10, 14, 16, 17, 23, 24, 26, 27, 28, 37, 38, 51, and 52.

Study Alert: New memory retention study finds reading hard copy is better than reading online

A University of Oregon study shows that readers of the printed New York Times “remember significantly more news stories than online news readers.” Continue reading

A University of Oregon study shows that readers of the printed New York Times “remember significantly more news stories than online news readers.” Additionally, the study shows that print readers “remember significantly more topics than online newsreaders” and that print readers remembered “more main points of news stories.”

For anyone studying for an exam and thinking about what type of study material to use, this study from Arthur D. Santana, Randall Livingstone and Yoon Cho is something to be aware of. Click on the following link below for the full article:

http://img.slate.com/media/66/MediumMatters.pdf.

Exam Alert: FINRA Charges New Fees for Canceling or Rescheduling Exams

FINRA has changed its rules regarding fees for canceling and rescheduling exams. Beginning September 1, 2011, if you cancel or reschedule an exam within Continue reading

FINRA has changed its rules regarding fees for canceling and rescheduling exams. Beginning September 1, 2011, if you cancel or reschedule an exam within 3-10 business days of the scheduled date, you will be charged one-half of the exam fee being canceled or rescheduled. If you cancel or reschedule within two days prior to the exam date, you will be charged the full exam fee.

You can check out the full notice from FINRA by clicking here.

Exam Alert: Large traders must identify themselves to the SEC

The SEC has adopted rules that require “large traders” to register with the Commission and receive unique identification numbers. The traders must then Continue reading

The SEC has adopted rules that require “large traders” to register with the Commission and receive unique identification numbers. The traders must then provide their broker-dealers with their ID numbers when they make trades, and the broker-dealers must record the ID numbers as part of their recordkeeping and transaction reporting requirements. A “large trader” is a “person whose transactions in exchange-listed securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month.” Relevant to the Series 79, 62, 55, 7, 26, and Series 24 exams.

Source: SEC Release 2011-154

Further Reading: Analysis by the Securities Technology Monitor

Exam Alert: SEC alters investment adviser registration and reporting requirements

The SEC has adopted changes to the registration and reporting requirements that private fund advisers face. Unless the private fund adviser meets Continue reading

The SEC has adopted changes to the registration and reporting requirements that private fund advisers face. Unless the private fund adviser meets an exemption, they must register with the SEC. Exemptions from registration are provided for venture capital fund advisers and private fund advisers with less than $150 million in assets under management in the U.S., though these advisers must still report certain business information. Foreign private advisers are exempt from the registration and reporting requirements.

Source: SEC Release 2011-133

Exam Alert: Mid-sized advisers must register with the states

The SEC has modified the standards for federal investment adviser registration. They have raised the bar for federal registration from Continue reading

The SEC has modified the standards for federal investment adviser registration. They have raised the bar for federal registration from $25 million in assets under management to $100 million. Advisers with between $25 million and $100 million in assets under management fall into the new category of “mid-sized advisers,” which must register with the states unless they qualify for federal registration based on other criteria. Mid-sized advisers have until June 28, 2012 to register at the state level.

Source: SEC Release 2011-133

Exam Alert: SEC approves exemption from investment adviser registration for “family offices”

On June 22, 2011, the SEC approved an exclusion for “family offices” from the regulations of the Investment Adviser Act of 1940. The new exemption applies Continue reading

On June 22, 2011, the SEC approved an exclusion for “family offices” from the regulations of the Investment Adviser Act of 1940. The new exemption applies to a company that only provides advice to “family clients,” is wholly owned by “family clients,” and does not hold itself out to the public as an investment adviser. “Family clients” include family members, key employees, and certain other clients.

Family offices were typically covered under the exemption for advisers with fewer than 15 clients, but that exemption will be removed under Dodd-Frank changes.

Relevant to the Series 7, 6, 65, 66, 63, 24 and Series 26 exams.

Source: SEC Release 2011-134

Exam Alert: FINRA pushes back implementation date for higher customer care standards

FINRA has changed the date on which its new know-your-customer and suitability rules will take effect. The new effective date is Continue reading

FINRA has changed the date on which its new know-your-customer and suitability rules (previously mentioned in this exam alert) will take effect. The new effective date is July 9, 2012. FINRA has also answered questions from firms about the new rules; the questions and answers may be found here.

http://www.finra.org/Industry/Regulation/Notices/2011/P123702

Exam Alert: SEC approves consolidated FINRA rules on books and records

The SEC has approved a new set of FINRA Rules governing books and records. These rules will be effective December 5, 2011. The rules state that records Continue reading

The SEC has approved a new set of FINRA Rules governing books and records. These rules will be effective December 5, 2011. The rules state that records for which no retention period is given under FINRA or Securities Exchange Act rules must be kept for six years. Firms must now record the name of the agent(s), if any, responsible for an account. Relevant to the Series 6, 7, 62, 24 and 26. Additional changes can be found here: http://www.finra.org/Industry/Regulation/Notices/2011/P123549.

Exam Alert: Proposed FINRA rule will clarify firms’ supervisory responsibilities for outsourced activities

On March 29, 2011, FINRA requested comment on proposed FINRA Rule 3190. The proposed rule makes it clear that when a firm outsources a function or Continue reading

On March 29, 2011, FINRA requested comment on proposed FINRA Rule 3190. The proposed rule makes it clear that when a firm outsources a function or activity to a third party, the firm is still responsible for complying with applicable securities law and FINRA and MSRB rules. This responsibility cannot be delegated to another party. Firms will also be required to have supervisory procedures in place to ensure compliance with the rule.

http://www.finra.org/Industry/Regulation/Notices/2011/P123399