How to Pass the MSRB Series 51 Exam

Considering taking the Series 51 exam? Keep reading to learn what the Series 51 qualifies you to do, what the exam covers, and how you should prepare for it. Continue reading

What is the Series 51 exam?

The Series 51, also called the Municipal Fund Securities Limited Principal Exam, is a Municipal Securities Rulemaking Board (MSRB) exam. The MSRB is a self-regulatory organization that establishes rules for municipal securities dealers and municipal advisors. Municipal securities dealers are required to designate principals to supervise their business and associated persons. To work as a principal in this capacity, you must pass either the Series 53 or Series 51 exam.

The Series 51 was created for principals who don’t otherwise deal in municipal securities and haven’t passed the Series 53. Passing the Series 51 exam qualifies you to oversee the municipal fund securities activities of a broker, dealer, or municipal securities dealer. Note that this is limited to municipal fund securities, whereas the Series 53 allows you oversee activities for all municipal securities. Therefore, the Series 51 is shorter than the Series 53 (60 questions vs 100) and focused on 529 college savings plans, local government investment pools, ABLE plans, and other funds created by a state or municipality.

The Series 51 permits you to manage, direct, and supervise any of the following activities:
    • Underwriting, trading, and selling municipal fund securities
    • Offering financial advice and consultant services to issuers of municipal fund securities
    • Communicating with customers about any of the activities above
    • Maintaining records related to any of the activities above
    • Training of principals and representatives
    • Processing, clearing, and safekeeping of municipal fund securities

With a Series 51 license, you may also manage individuals who work in multiple capacities relating to municipal fund securities, including underwriting, sales, trading, advising, and consulting with issuers of municipal fund securities.

Am I eligible to take the Series 51?

To take the Series 51 exam, you must be sponsored by your firm. You must also pass the corequisite Series 24 or Series 26 exam to obtain the Series 51 qualification.

About the Exam

The Series 51 exam consists of 60 multiple-choice questions that are worth one point each. You have one and a half hours to complete the exam, and you must score 70% or higher to pass.

Series 51 exam details

Note: Scores are rounded down to the next lowest whole number (e.g. 69.9% would be a final score of 69%–not a passing score for the Series 51 exam).

Topics Covered on the Exam

The Series 51 exam measures your knowledge of MSRB rules, rule interpretations, and federal statutory provisions applicable to allowed activities. It also measures your ability to apply these rules and interpretations to given situations in the context of municipal fund securities activities.

The Series 51 exam covers the seven areas of the MSRB Series 51 Content Outline:

Series 51 exam topics

The MSRB updates its exam questions regularly to reflect the most current rules and market practices. Solomon recommends that you print out the current version of the MSRB Series 51 Content Outline and use it in conjunction with the Solomon Series 51 Study Guide. The Content Outline is subject to change without notice, so make sure you have the most recent version.

Series 51 Example Questions

The Series 51 exam consists of multiple-choice questions, each with four options. You may see the following question structures. However, keep in mind that these sample questions don’t necessarily represent the difficulty level or subjects covered in the exam.

Closed Stem Format:

This item type asks a question and gives four possible answers to choose from.

For SIPC coverage purposes, which of the following people would have their multiple accounts combined?

    1. Joe, who has an individual account and a joint account with his wife
    2. Jane, who has a cash account and a margin account in her name
    3. Jack, who has an UGMA account for his daughter, a trust account for his son, and an individual account
    4. Joan, who has a partnership account for her business, an individual account, and an UTMA account for her niece
Open Stem Format:

This kind of question has an incomplete sentence followed by four possible conclusions.

Municipal fund securities are distinguished from mutual funds by their:

    1. Sellers
    2. Issuers
    3. Investors
    4. Underlying investments
“Except” (or “Not”) Format:

This type requires an answer that is incorrect or is an exception among the four answer choices.

For a 529 plan, all of the following are qualified education expenses except:

    1. Tuition
    2. Services for special needs students
    3. Books
    4. Room and board for all students
Complex Multiple-Choice (“Roman Numeral”) Format: 

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

Arkansas issues a 529 plan to Firm A. Firm A is in a selling agreement with Firm B. Firm B utilizes other firms to sell the plan. Which of the following are true?

    1. Firm A is a selling dealer.
    2. Firm B is a selling dealer.
    3. Firm A is a primary distributor.
    4. Firm B is a primary distributor.
      1. I and III
      2. I and IV
      3. II and IV
      4. II and III
  1. Answers: 1. B   2. B   3. D.  4. D  

For more Series 51 practice questions, try a free sample of the Solomon Exam Prep Series 51 Exam Simulator. You’ll receive instant feedback on each question with a robust explanation of the correct answer.

Taking the Series 51 Exam

FINRA administers the Series 51 exam, and you must take it at a Prometric test center via computer. Like all securities industry exams, the Series 51 is closed-book. The testing center will provide you with any materials you need to take the exam, such as a four-function calculator, erasable note board, dry-erase markers, and noise-cancelling headphones. The inspection and sign-in requirements at testing centers are stringent, so arrive at least 30 minutes before your appointment.

Test-Taking Tips

Here are some basic test-taking strategies to remember when taking your exam. Avoid lingering too long on any one question—this could cause you to run out of time and not get to other questions you know. If you’re not sure about a question, take your best guess and mark it for review. There’s no penalty for guessing, so try to answer every question.

After you’ve answered all the questions, you can go back to any questions you flagged for review. This strategy allows you to efficiently answer the ones you know. You might also learn something later in the exam that helps you answer an earlier question. Just remember to factor in some time to return to the questions you flagged. However, don’t simply skip all of the difficult questions with the plan to answer them later. Instead, make a sincere effort to answer each question before moving on to the next one because your mind is fresher earlier on during the exam.

How to Study for the Series 51 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. Many students read the Study Guide two or three times before taking the exam. 
    • Take chapter quizzes in the Exam Simulator. When you finish reading a chapter in the Study Guide, take 4–6 chapter quizzes in the Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales.
    • Take full practice exams in the Exam Simulator. When you’ve finished reading the entire Study Guide, review your handwritten notes once more. Finally, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least 80%. When you reach that point, you’re probably ready to sit for the Series 51 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10–15 minutes. Studies show that taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another proven method to reinforce memory and strengthen learning.
    • Research. Research anything you don’t understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they don’t understand get a deeper understanding of the subject matter and are much more likely to pass. 
    • Become the teacher. Studies show that explaining what you’re learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions, or explain it out loud to yourself. Studies show this helps almost as much as explaining to an actual person (see Solomon’s blog post to learn more about this strategy!). 
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Series 51 Resources folder in your Solomon student account has helpful study tools, including detailed study schedules that you can print out. Or, use the online study schedule and check off tasks as you complete them.
    • Use Ask the Professor. If you have a content-related question, click the Ask the Professor button in your account dashboard and get personalized help from a Solomon professor
  • Good practices while studying:
    • Take regular breaks. Studies show that if you’re studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep. Sleep consolidates learning into memory, studies show. Be good to yourself while you’re studying for the Series 51: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the MSRB Series 51 exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming a Municipal Fund Securities Limited Principal..

Explore all Solomon Series 51 exam prep, including the Study Guide, Exam Simulator, and Audiobook.

And join the Solomon email list to hear about new product releases, industry news, and more! Just click the button below:

How to Pass the FINRA Series 22 Exam

Thinking about taking the Series 22 exam? Keep reading to learn what the Series 22 qualifies you to do, what the exam covers, and how you should prepare for it. Continue reading

What is the Series 22 exam?

The Series 22, also called the Direct Participation Programs Representative Exam, is a FINRA (Financial Industry Regulatory Authority) exam. FINRA is an independent, self-regulatory organization that creates and enforces rules for registered broker-dealer firms and their representatives. FINRA is also responsible for administering securities licensing exams, such as the Securities Industry Essentials (SIE) exam, Series 7 exam, Series 22 exam, and many more.

The Series 22 exam measures the knowledge of entry-level registered representatives to perform their duties as Direct Participation Programs Representatives. Taking the exam will help you understand your professional responsibilities, including the solicitation, purchase, and sale of limited partnerships, among other products.

What does the Series 22 permit me to do?

Did you know that the Series 22 exam is an easier path to becoming a direct participation program representative than the Series 7? The Series 22 is a shorter exam requiring less study time. Pass it and you’re on your way to being qualified to solicit and sell interests in direct participation programs (DPPs), including real estate, oil and gas, equipment leasing, BDCs, agricultural, and like-kind exchanges.

A DPP is FINRA term for a pass-through entity, such as a limited partnership or S-corp, whose shares indicate ownership, not of an operating company, but of certain physical assets of the company.  As a pass-through entity, DPPs can offer tax benefits to investors, but they are not suitable for all investors, and they are not liquid investments.

Other permitted activities and products with a Series 22 license include:

    • Limited partnerships
    • Limited liability companies
    • S corporations
Am I eligible to take the Series 22?

You must be employed and sponsored by a FINRA-member firm to take the Series 22 exam.

To obtain the Series 22 qualification, you must also pass the co-requisite Securities Industry Essentials (SIE) exam. Unlike the Series 22 exam, the SIE does not require you to be sponsored by a broker-dealer.

About the Exam

The Series 22 exam consists of 50 scored and five unscored multiple-choice questions. The five unscored questions are experimental questions and appear randomly.

Series 22 exam details

Note: Scores are rounded down to the next lowest whole number (e.g. 69.9% would be a final score of 69%–not a passing score for the Series 22 exam).

Topics Covered on the Exam

FINRA divides the questions on the Series 22 exam into four areas representing the four major job functions of a Direct Participation Programs Representative. FINRA updates its exam questions regularly to reflect the most current rules and regulations.

Series 22 exam topics

Solomon recommends that you print out the current version of the FINRA Series 22 Content Outline and use it in conjunction with the Solomon Series 22 Study Guide. The Content Outline is subject to change without notice, so make sure you have the most recent version.

Series 22 Example Questions

The Series 22 exam consists of multiple-choice questions, each with four options. You may see the following question structures. However, keep in mind that these sample questions don’t necessarily represent the difficulty level or subjects covered in the exam.

Closed Stem Format:

This item type asks a question and gives four possible answers to choose from.

Which of the following could potentially be a DPP? 

    1. A corporation 
    2. A REIT
    3. A company that has issued exchange-traded securities
    4. An investment company
Open Stem Format:

This kind of question has an incomplete sentence followed by four possible conclusions.

Owners of limited liability companies (LLCs) are considered:

    1. Shareholders
    2. Members
    3. Trustees
    4. Partners
“Except” (or “Not”) Format:

This type requires an answer that is incorrect or is an exception among the four answer choices.

Each of the following can cause an LP to be dissolved before the date specified in its Certificate of Limited Partnership, except:

    1. The only general partner dies.
    2. The LP declares bankruptcy.
    3. The only remaining general partners are substitute general partners.
    4. A majority of limited partners and all general partners agree to early dissolution.
  1.  
  1. Answers: 1. A   2. B   3. C  

For more Series 22 practice questions, try a free sample of Solomon Exam Prep’s Series 22 Exam Simulator. You’ll receive instant feedback on each question with a robust explanation of the correct answer.

Taking the Series 22 Exam

FINRA administers the Series 22 exam, and you must take it at a Prometric test center. The exam is given via computer. Before the exam, you’ll be able to watch a tutorial on how to take the exam.

Like all qualifying exams in the securities industry, the Series 22 is closed-book, and you’re not allowed to bring anything into the exam. The test center will provide you with any materials you need to complete the exam. For instance, the test center may provide a whiteboard with markers or scratch paper and a pencil, as well as a basic electronic calculator. The inspection and sign-in requirements at test centers are stringent, so plan to arrive at least 30 minutes before your scheduled test appointment.

Test-Taking Tips

When taking the exam, it helps to keep some test-taking strategies in mind. Try not to spend too long on one question—this may cause you to run out of time and not get to other questions you know. If you don’t know the answer to a question, guess at the answer and mark it for review . There’s no penalty for guessing, so it’s beneficial to answer every question.

After you’ve finished all the questions, you can return to any flagged questions. This strategy allows you to efficiently answer the ones you know. You might also learn something later in the exam that helps you answer an earlier question. Just remember to save enough time to return to the questions you didn’t answer. However, it’s not a good idea to simply skip all of the difficult questions with the plan to answer them later. You should make a serious effort to answer each question before moving on to the next one since your thoughts are often clearer earlier on during the exam.

How to Study for the Series 22 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. Many students read the Study Guide two or three times before taking the exam. 
    • Take chapter quizzes in the Exam Simulator. When you finish reading a chapter in the Study Guide, take 4–6 chapter quizzes in the Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales.
    • Take full practice exams in the Exam Simulator. When you’ve finished reading the entire Study Guide, review your handwritten notes once more. Finally, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least 80%. When you reach that point, you’re probably ready to sit for the Series 22 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10–15 minutes. Studies show that taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another proven method to reinforce memory and strengthen learning.
    • Research. Research anything you don’t understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they don’t understand get a deeper understanding of the subject matter and are much more likely to pass. 
    • Become the teacher. Studies show that explaining what you’re learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions, or explain it out loud to yourself. Studies show this helps almost as much as explaining to an actual person (see Solomon’s blog post to learn more about this strategy!). 
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Series 22 Resources folder in your Solomon student account has helpful study tools, including detailed study schedules that you can print out. Or, use the online study schedule and check off tasks as you complete them.
    • Use Ask the Professor. If you have a content-related question, click the Ask the Professor button in your account dashboard and get personalized help from a Solomon professor
  • Good practices while studying:
    • Take regular breaks. Studies show that if you’re studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep. Sleep consolidates learning into memory, studies show. Be good to yourself while you’re studying for the Series 22: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the FINRA Series 22 exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming a Direct Participation Programs Representative.

Explore all Solomon Series 22 exam prep, including the Study Guide and Exam Simulator.

And join the Solomon email list to hear about new product releases, industry news, and more! Just click the button below:

How to Pass the FINRA Series 99 Exam

Thinking about taking the Series 99 exam? Keep reading to learn what the Series 99 qualifies you to do, what the exam covers, and how you should prepare for it. Continue reading

What is the Series 99 exam?

The Series 99, also called the Operations Professionals Exam, is a FINRA (Financial Industry Regulatory Authority) exam. FINRA is an independent, self-regulatory organization that creates and enforces rules for registered broker-dealer firms and their representatives. FINRA is also responsible for administering securities licensing exams, such as the Securities Industry Essentials (SIE) exam, Series 7 exam, Series 99 exam, and many more.

The Series 99 exam measures the knowledge of entry-level registered representatives to perform their duties as Operations Professionals. The exam will help you understand your professional responsibilities, including key regulatory and control requirements. It will assess your broad understanding of the following:

    • The operations functions that support a broker-dealer’s business
    • The regulations that are designed to achieve investor protection and market integrity
    • The regulations that drive operations processes and procedures conducted at a broker-dealer
    • Regulatory red flag issues and the ability to identify and address these issues to the appropriate persons within the member firm and/or to a regulatory body, if necessary
What does the Series 99 permit me to do?

Obtaining a Series 99 qualification will permit you to perform crucial functions in a broker dealer’s operations department. Duties may include customer onboarding, financial control, stock loan/securities lending, trade confirmation, and issuing account statements.

Are there any prerequisites for the Series 99?

Yes, you must also pass the co-requisite Securities Industry Essentials (SIE) exam to obtain the Series 99 qualification. To take the Series 99 exam, you must be employed and sponsored by a FINRA-member firm.

Can I register as an Operations Professional without passing the Series 99 exam?

If you hold any of the following registrations, you can qualify as an Operations Professional without taking the Series 99 exam:

About the Exam

The Series 99 exam consists of 50 scored and five unscored multiple-choice questions. The five unscored questions are experimental questions and appear randomly.

Series 99 exam details in a table

Note: Scores are rounded down to the next lowest whole number (e.g. 67.9% would be a final score of 67%–not a passing score for the Series 99 exam).

Topics Covered on the Exam

FINRA divides the questions on the Series 99 exam into two parts representing the two major job functions of an Operations Professional.

FINRA updates its exam questions regularly to reflect the most current rules and regulations. Solomon recommends that you print out the current version of the FINRA Series 99 Content Outline and use it in conjunction with the Solomon Series 99 Study Guide. The Content Outline is subject to change without notice, so make sure you have the most recent version.

Series 99 Example Questions

The Series 99 exam consists of multiple-choice questions, each with four options. You may see the following question structures. However, keep in mind that these sample questions don’t necessarily represent the difficulty level or subjects covered in the exam.

Closed Stem Format:

This item type asks a question and gives four possible answers to choose from.

Which of the following is not a factor that can be used to determine whether securities were not delivered in good form and are therefore subject to possible rejection?

    1. Improper endorsements
    2. Late arrival
    3. Erroneously cancelled coupons
    4. Damaged or mutilated certificates
Open Stem Format:

This kind of question has an incomplete sentence followed by four possible conclusions.

Shoestring Discount Stock Jocks owns no shares of stock in any exchange-traded companies. In its efforts to execute a buy order for your account, it would be acting as a:

    1. Broker-dealer
    2. Dealer
    3. Broker
    4. None of the choices listed
“Except” (or “Not”) Format:

This type requires an answer that is incorrect or is an exception among the four answer choices.

All of the following are definitely DTC-eligible securities, except:

    1. A stock that trades on the NYSE
    2. A stock that trades on Nasdaq
    3. An OTC security
    4. A bond that trades on the NSYE
  1.  
  1. Answers: 1. B   2. C   3. C  

Try a free sample of Solomon Exam Prep’s Series 99 Exam Simulator. You’ll receive instant feedback on each question with a robust explanation of the correct answer.

Taking the Series 99 Exam

FINRA administers the Series 99 exam, and you must take it at a Prometric test center. The exam is given via computer. Before the exam starts, you’ll take a tutorial on how to take the exam. After you finish the tutorial, the exam will begin and you’ll have one hour and 30 minutes to complete it.

Like all qualifying exams in the securities industry, the Series 99 is closed-book, and you’re not allowed to bring anything into the exam. The test center will provide you with any materials you need to complete the exam. For instance, the test center may provide a whiteboard with markers or scratch paper and a pencil, as well as a basic electronic calculator. Or, a digital calculator and notepad will be available within the computer testing platform.

The inspection and sign-in requirements at test centers are stringent, so plan to arrive at least 30 minutes before your scheduled test appointment.

Test-Taking Tips

When taking the exam, it helps to keep some test-taking strategies in mind. Try not to spend too long on one question—this may cause you to run out of time and not get to other questions you know. If you don’t know the answer to a question, guess at the answer and mark it for review . There’s no penalty for guessing, so it’s beneficial to answer every question.

After you’ve finished all the questions, you can return to any flagged questions. This strategy allows you to efficiently answer the ones you know. You might also learn something later in the exam that helps you answer an earlier question. Just remember to save enough time to return to the questions you didn’t answer. However, it’s not a good idea to simply skip all of the difficult questions with the plan to answer them later. You should make a serious effort to answer each question before moving on to the next one since your thoughts are often clearer earlier on during the exam.

How to Study for the Series 99 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. Many students read the Study Guide two or three times before taking the exam. 
    • Take chapter quizzes in the Exam Simulator. When you finish reading a chapter in the Study Guide, take 4–6 chapter quizzes in the Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales.
    • Take full practice exams in the Exam Simulator. When you’ve finished reading the entire Study Guide, review your handwritten notes once more. Finally, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least 80%. When you reach that point, you’re probably ready to sit for the Series 99 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10–15 minutes. Studies show that taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another proven method to reinforce memory and strengthen learning.
    • Research. Research anything you don’t understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they don’t understand get a deeper understanding of the subject matter and are much more likely to pass. 
    • Become the teacher. Studies show that explaining what you’re learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions, or explain it out loud to yourself. Studies show this helps almost as much as explaining to an actual person (see Solomon’s blog post to learn more about this strategy!). 
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Series 99 Resources folder in your Solomon student account has helpful study tools, including documents that summarize important exam concepts. There’s also a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Watch the Video Lecture. This provides a helpful review of the key concepts in each chapter after reading the Solomon Study Guide. Take notes to help yourself stay focused.
    • Use Ask the Professor. If you have a content-related question, click the Ask the Professor button in your account dashboard and get personalized help from a Solomon professor.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you’re studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep. Sleep consolidates learning into memory, studies show. Be good to yourself while you’re studying for the Series 99: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the FINRA Series 99 exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming an Operations Professional.

Explore all Solomon Series 99 exam prep, including the Study Guide, Exam Simulator, and Video Lecture.

And join the Solomon email list to hear about new product releases, industry news, and more! Just click the button below:

How to Pass the MSRB Series 54 Exam

Thinking about taking the Series 54 exam? Keep reading to learn what the Series 54 qualifies you to do, what the exam covers, and how you should prepare for it. Continue reading

What is the Series 54 exam?

The Series 54, also called the Municipal Advisor Principal Qualification Exam, is a Municipal Securities Rulemaking Board (MSRB) exam. The MSRB is a self-regulatory organization that establishes rules for municipal securities dealers and municipal advisors. As of November 30, 2021, all municipal advisor professionals working in the capacity of a municipal advisor principal must pass the Series 54 to be appropriately qualified.

Passing the Series 54 exam qualifies you to manage, direct, and supervise municipal advisory activities. These activities include advising a municipality regarding issuing municipal securities, such as the structure, timing, or terms of an issue. Soliciting municipal securities business from municipalities on behalf of a third party is also a form of municipal advising.

Are there other exams I need to take to become a municipal advisor principal?

Yes. To become properly qualified as a municipal advisor principal, you must also pass the Series 50, Municipal Advisor Representative Qualification Exam.

About the Exam

The Series 54 exam consists of 100 scored and ten unscored multiple-choice questions. You have three hours to complete the exam, and you must score a 70% or higher to pass.

Series 54 exam details in a table

Note: Scores are rounded down to the next lowest whole number (e.g. 69.9% would be a final score of 69% – not a passing score for the Series 54 exam).

Topics Covered on the Exam

The Series 54 exam is designed to make sure that municipal advisor principals are competent in the supervisory application of rules and regulations. This means that the exam measures your ability to apply regulatory requirements to the municipal advisor’s activities, rather than just a general knowledge of what those regulations are.

The Series 54 exam covers the three main topic areas of the MSRB Series 54 Content Outline:

Series 54 exam topics in a table

The MSRB updates its exam questions regularly to reflect the most current rules and regulations. Solomon recommends that you print out the current version of the MSRB Series 54 Content Outline and use it in conjunction with the Solomon Series 54 Study Guide. The Content Outline is subject to change without notice, so make sure you have the most recent version.

Question Types on the Exam

The Series 54 exam consists of multiple-choice questions, each with four options. You may see the following four question structures. However, keep in mind that these sample questions don’t necessarily represent the difficulty level or subjects covered in the exam.

Closed Stem Format:

This item type asks a question and gives four possible answers to choose from.

Which of the following would be most likely to require registration as a municipal advisor?

    1. Providing a municipality with a price quote for an investment product within the municipality’s investment criteria
    2. Offering the municipality a possible price range for a new issue
    3. Displaying a comparison of debt financing structures
    4. Providing advice on issuing securities to the municipality through its municipal advisor
Open Stem Format:

This kind of question has an incomplete sentence followed by four possible conclusions.

When dealing with municipal entity clients, the two primary duties that a non-solicitor municipal advisor must fulfill with reference to standards of conduct are:

    1. The duties of care and loyalty
    2. The duties of care and suitability
    3. The duties of loyalty and prudence
    4. The duties of fairness and consistency
“Except” (or “Not”) Format:

This type requires an answer that is incorrect or is an exception among the four answer choices.

Documentation that defines a municipal advisory relationship with a client must include all of the following except:

    1. A description of the advisor’s compensation arrangement
    2. Educational background information about the municipal advisor’s associates
    3. The termination date of the relationship between the advisor and the client
    4. A description of all activities to be performed for the client
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

Which two of the following actions are required for a municipal advisor to comply with MSRB rules on supervision?

    1. Designation of a single chief compliance officer
    2. Annual certification of supervisory policies
    3. Providing clients with an annual update of supervisory practices
    4. Designation of a principal at each of the firm’s offices to oversee the system
    1. I and II
    2. I and IV
    3. II and III
    4. III and IV
  1.  

Answers: 1. D   2. A   3. B   4. A  

Try a free sample of Solomon Exam Prep’s Series 54 Exam Simulator. You’ll receive instant feedback on each question with a robust explanation of the correct answer.

Taking the Series 54 Exam

The Financial Industry Regulatory Authority (FINRA) administers the Series 54 exam, and you must take it at a Prometric test center. Like all qualifying exams in the securities industry, the Series 54 is closed-book, and you’re not allowed to bring anything into the exam. The test center will provide you with any materials you need to complete the exam. For instance, the test center may provide a whiteboard with markers or scratch paper and a pencil, as well as a basic electronic calculator. The inspection and sign-in requirements at test centers are stringent, so plan to arrive at least 30 minutes before your scheduled test appointment.

Before the exam starts, you’ll take a 30-minute tutorial on exam administration. After you finish the tutorial, the exam will begin and you’ll have three hours to complete it.

Test-Taking Tips

When taking the exam, it helps to keep some test-taking strategies in mind. Try not to spend too long on one question—this may cause you to run out of time and not get to other questions you know. If you don’t know the answer to a question, guess at the answer and “flag” it. There’s no penalty for guessing, so it’s beneficial to answer every question.

After you’ve finished all the questions, you can come back to any flagged questions. This strategy allows you to efficiently answer the ones you know. You might also learn something later in the exam that helps you answer an earlier question. Just remember to save enough time to return to the questions you didn’t answer. However, it’s not a good idea to simply skip all of the difficult questions with the plan to answer them later. You should make a serious effort to answer each question before moving on to the next one since your thoughts are often clearer earlier on during the exam.

How to Study for the Series 54 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, listen to the Solomon Series 54 Audiobook. The Audiobook is a word-for-word reading of the Study Guide.
    • Take chapter quizzes in the Exam Simulator. When you finish reading a chapter in the Study Guide, take 4–6 chapter quizzes in the Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales.
    • Take full practice exams in the Exam Simulator. When you’ve finished reading the entire Study Guide, review your handwritten notes once more. Finally, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least 80%. When you reach that point, you’re probably ready to sit for the Series 54 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10–15 minutes. Studies show that taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another proven method to reinforce memory and strengthen learning.
    • Research. Research anything you don’t understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they don’t understand get a deeper understanding of the subject matter and are much more likely to pass. 
    • Become the teacher. Studies show that explaining what you’re learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions, or explain it out loud to yourself. Studies show this helps almost as much as explaining to an actual person (see Solomon’s blog post to learn more about this strategy!). 
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Series 54 Resources folder in your Solomon student account has helpful study tools, including documents that summarize important exam concepts. There’s also a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Watch the Video Lecture. This provides a helpful review of the key concepts in each chapter after reading the Solomon Study Guide. Take notes to help yourself stay focused.
    • Use Ask the Professor. If you have a content-related question, click the Ask the Professor button in your account dashboard and get personalized help from a Solomon professor.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you’re studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep. Sleep consolidates learning into memory, studies show. Be good to yourself while you’re studying for the Series 54: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the MSRB Series 54 exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming a Municipal Advisor Principal.

Explore all Solomon Series 54 exam prep, including the Study Guide, Exam Simulator, Audiobook, and Video Lecture.

And join the Solomon email list to hear about new product releases, industry news, and more! Just click the button below:

How to Pass the NFA Series 3 Exam

What is the Series 3 exam? Learn what passing the Series 3 exam allows you to do, what the exam covers, and how you should prepare for it. Continue reading

What is the Series 3 exam?

The Series 3, also called the National Commodities Futures Examination, is an NFA (National Futures Association) exam. NFA is the self-regulatory organization for the U.S. derivatives industry and is designated by the Commodity Futures Trading Commission (CFTC) as a registered futures association. The goals of the NFA are to ensure the integrity of the derivatives markets, protect investors, and enforce regulations.

Individuals and entities that do business as futures professionals must register with the CFTC and meet certain proficiency requirements. This usually means passing the Series 3 exam.

You may need to take the Series 3 exam in order to work as an associated person at one of the following:

    • Futures commission merchant (FCM)—a brokerage firm that solicits orders from customers and executes trades. It may also provide credit to its customers to enable trading.
    • Introducing broker (IB)—a brokerage firm that solicits orders from customers but is not permitted to execute them. It must send its orders to an FCM to execute and clear the trades.
    • Commodity trading advisor (CTA)—an individual or firm that analyzes futures markets, issues reports, offers advice, and makes recommendations.
    • Commodity pool operator (CPO)—an individual or firm that solicits funds from the public and pools them into a single account to invest in futures contracts.
    • Retail foreign exchange dealer (RFED)—an individual or entity that acts as a counterparty to an over-the-counter foreign currency transaction.
What does the Series 3 qualify me to do?

Passing the Series 3 exam qualifies you sell commodities, futures contracts, or commodity pools. The term “sell” includes soliciting customers, customer orders, customer funds, or customer accounts on behalf of the entities listed above. It also qualifies those who work for a CTA to analyze, issue reports, and offer advice on futures markets. You’ll also be qualified to manage other individuals who sell commodities or futures contracts.

Note that simply passing the Series 3 exam does not allow you to act as a registered commodity broker. You’ll also need to complete a lengthy online registration application with the NFA, which includes submitting a fingerprint card and other required filings.

Are there any prerequisites for the Series 3?

There are no prerequisites for the Series 3 exam, and you can enroll to take the exam without firm sponsorship. You must sign up for the exam and pay the exam fee to the Financial Industry Regulatory Authority (FINRA), which administers the Series 3 exam.

About the Exam

The Series 3 exam consists of 120 scored and five unscored multiple-choice or true/false questions. The five unscored questions are experimental questions and appear randomly.

Series 3 exam details in a table

Note: Scores are rounded down to the next lowest whole number (e.g. 69.9% would be a final score of 69% – not a passing score for the Series 3 exam).

Topics Covered on the Exam

The NFA divides the questions on the Series 3 exam into two parts. The first part, covering market knowledge, includes several topics. The second part covers U.S. regulations and includes only one topic. The NFA updates its exam questions regularly to reflect the most current rules and regulations. You must receive a score of 70% on both parts of the exam to pass.

Series 3 topics in a table

Question Types on the Exam

The Series 3 exam consists of multiple-choice questions, each with four options. You may see the following question structures. However, keep in mind that these sample questions don’t necessarily represent the difficulty level or subjects covered in the actual exam.

Closed Stem Format:

This item type asks a question and gives four possible answers to choose from.

Which of the following is not classified as a commodity?

    1. Livestock
    2. Automobiles
    3. Corn
    4. Oil
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four possible conclusions.

All foreign exchange futures contracts are quoted in:

    1. American terms
    2. European terms
    3. The same terms in which the foreign currency is quoted in the spot market
    4. American and European terms side by side
“EXCEPT” Format:

This type requires you to recognize the one choice that is an exception among the four answer choices.

All of the following are characteristics of a Treasury bill except:

    1. They are sold at discount to the par value.
    2. They pay low periodic interest payments.
    3. They are considered the safest of Treasury securities.
    4. They have a maximum 52-week maturity.
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

A forward conversion combines which two of the following?

    1. A long futures contract
    2. A short futures contract
    3. A short call and a long put on the futures contract
    4. A long call and a short put on the futures contract
    1. I and III
    2. I and IV
    3. II and III
    4. II and IV

This format is also used in items that ask you to rank or order a set of items from highest to lowest (or vice versa), or to place a series of events in the proper sequence.

Put these futures contract events in the proper sequence:

    1. Last delivery date
    2. First delivery date
    3. First notice date
    4. Last trade date
    1. IV, II, III, I
    2. III, II, IV, I
    3. III, IV, II, I
    4. II, III, I, IV

 

Answers: 1. B   2. A   3. B   4. A   5. B

Try a free sample of the Solomon Series 3 Exam Simulator. You receive instant feedback on each question with a robust explanation of the correct answer.

Taking the Series 3 Exam

You can take the Series 3 exam at a Prometric test center or remotely online using Prometric’s ProProctor system. If taking the exam at a test center, you will receive any materials you need to complete the exam. These may include a whiteboard with markers or scratch paper and a pencil, as well as a basic electronic calculator. The inspection and sign-in requirements at test centers are stringent, so plan to arrive at least 30 minutes before your scheduled test appointment.

If you decide to take the test online with ProProctor, you should learn about the strict procedures you must follow. See this ProProcter user guide or the FINRA online testing page for complete details. And for a first-hand account of the remote testing experience, read this Solomon blog post.

Test-Taking Tips

Whether you take the exam at a test center or online, it helps to keep some test-taking strategies in mind. Try not to spend too long on one question—this may cause you to run out of time and not get to other questions you know. If you don’t know the answer to a question, take your best guess and flag it. There’s no penalty for guessing, so it’s beneficial to answer every question.

After you’ve finished all the questions, you can return to any flagged questions. This strategy allows you to efficiently answer the ones you know. You might also learn something later in the exam that helps you answer an earlier question. Just remember to save enough time to return to the questions you didn’t answer. However, it’s not a good idea to simply skip all of the difficult questions with the plan to answer them later. You should make a serious effort to answer each question before moving on to the next one since your thoughts are often clearer earlier on during the exam.

How to Study for the Series 3 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide carefully. Many students read the Study Guide two or three times before taking the exam. 
    • Take chapter quizzes in the Exam Simulator. When you finish reading a chapter in the Study Guide, take 4–6 chapter quizzes in the Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales.
    • Take full practice exams in the Exam Simulator. When you’ve finished reading the entire Study Guide, review your handwritten notes once more. Finally, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least 80%. When you reach that point, you’re probably ready to sit for the Series 3 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10–15 minutes. Studies show that taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another proven method to reinforce memory and strengthen learning.
    • Research. Research anything you don’t understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they don’t understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Become the teacher. Studies show that explaining what you’re learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions, or explain it out loud to yourself. This helps almost as much as explaining to an actual person (see Solomon’s previous blog post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Series 3 Resources folder in your Solomon student account has helpful study tools, including a detailed study schedule that you can print out. Or, use the online study schedule and check off tasks as you complete them.
    • Use Ask the Professor. If you have a content-related question, click the Ask the Professor button in your account dashboard and get personalized help from a Solomon professor.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you’re studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you’re studying for the Series 3: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the NFA Series 3 Exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming a Futures Professional!

Explore all Solomon Exam Prep Series 3 study materials, including the Study Guide and Exam Simulator.

And join the Solomon email list to hear about new product releases, industry news, and more! Just click the button below:

How to Pass the MSRB Series 53 Exam

What is the Series 53 exam? Learn what a Series 53 license qualifies you to do, what the exam covers, and how you should prepare for it. Continue reading

What is the Series 53 exam?

The Series 53, also called the Municipal Securities Principal Qualification Exam, is a Municipal Securities Rulemaking Board (MSRB) exam. The MSRB is a self-regulatory organization that establishes rules for municipal securities dealers and municipal advisors.

Passing the Series 53 exam qualifies you to oversee the municipal fund securities activities of a securities firm or bank dealer. You’ll also be qualified to supervise associates who engage in various municipal securities activities. In this capacity, a Municipal Securities Principal manages, directs, or supervises one or more of the following activities:

    • underwriting of municipal securities
    • trading of municipal securities
    • buying or selling municipal securities from or to customers
    • rendering of financial advisory or consultant services to issuers of municipal securities
    • communications with customers about any of the above activities
    • maintaining records of the above activities
    • processing, clearing, and safekeeping of municipal securities
    • training of principals or representatives
Are there any prerequisites for the Series 53?

Yes. To take the Series 53 exam, you must have already passed the Series 52, Municipal Securities Representative Qualification Exam, and the FINRA Securities Industry Essentials (SIE) Exam. However, if you had passed the FINRA Series 7 exam before November 7, 2011, then that qualifies you to take the Series 53.

Like the Series 52, you must be employed and sponsored by a broker-dealer to take the Series 53 exam.

About the Exam

The Series 53 exam consists of 100 scored multiple-choice questions covering the six topic areas of the MSRB Series 53 Content Outline.

Series 53 exam details in a table

Note: Scores are rounded down to the next lowest whole number (e.g. 69.9% would be a final score of 69% – not a passing score for the Series 53 exam).

Topics Covered on the Exam

The MSRB divides the questions on the Series 53 exam into six main areas:

Series 53 exam topics

The MSRB updates its exam questions regularly to reflect the most current rules and regulations. Solomon recommends that you print out the current version of the MSRB Series 53 Content Outline and use it together with the Solomon Series 53 Study Guide. The Content Outline is subject to change without notice, so make sure you have the most recent version.

Question Types on the Exam

The Series 53 exam consists of multiple-choice questions, each with four options. You will see these question structures:

Closed Stem Format:

This item type asks a question and gives four possible answers to choose from.

Which agencies enforce MSRB rules for broker-dealers?

    1. FDIC and FINRA
    2. SEC and FINRA
    3. Federal Reserve Board and MSRB
    4. SEC and MSRB
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four possible conclusions.

Municipal securities dealers are required to maintain records of customer complaints for:

    1. Six years
    2. Three years
    3. Two years
    4. Four years
“EXCEPT” Format:

This type requires you to recognize the one choice that is an exception among the four answer choices.

A person must be registered as a Municipal Securities Representative to engage in all of the following except:

    1. Communicating with public investors in municipal securities
    2. Underwriting municipal securities
    3. Providing investment advice about municipal securities
    4. Trading municipal bond funds
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

Which of the following must the underwriter give to a customer who purchases a municipal bond subject to a negotiated offering within the first 25 days following the end of the underwriting period?

    1. The final official statement
    2. The investor brochure
    3. The amount of the underwriting spread
    4. The percentage of orders that were filled in the presale period
    1. I and III
    2. I and II
    3. III and IV
    4. II and IV

This format is also used in items that ask you to rank or order a set of items from highest to lowest (or vice versa), or to place a series of events in the proper sequence.

Arrange the following order types from highest priority to lowest priority:

    1. Designated orders
    2. Group net orders
    3. Member takedown orders
    4. Presale orders
    1. I, II, III, IV
    2. IV, I, II, III
    3. IV, II, I, III
    4. I, IV, III, II

 

Answers: 1. B   2. A   3. B   4. A   5. C

For an even better idea of the possible question types you might encounter on the Series 53 exam, try Solomon Exam Prep’s free Series 53 Sample Quiz.

Taking the Series 53 Exam

The Financial Industry Regulatory Authority (FINRA) administers the Series 53 exam, and you must take it at a Prometric test center. Like all qualifying exams in the securities industry, the Series 53 is closed-book, and you’re not allowed to bring anything into the exam. The test center will provide you with any materials you need to complete the exam. For instance, the test center will likely provide a whiteboard with markers or scratch paper and a pencil, as well as a basic electronic calculator. The inspection and sign-in requirements at test centers are stringent, so plan to arrive at least 30 minutes before your scheduled test appointment.

Test-Taking Tips

When taking the exam, it helps to keep some test-taking strategies in mind. Try not to spend too long on one question—this may cause you to run out of time and not get to other questions you know. If you don’t know the answer to a question, guess at the answer and “flag” it. There’s no penalty for guessing, so it’s beneficial to answer every question.

After you’ve finished all the questions, you can come back to any flagged questions. This strategy allows you to efficiently answer the ones you know. You might also learn something later in the exam that helps you answer an earlier question. Just remember to save enough time to return to the questions you didn’t answer. However, it’s not a good idea to simply skip all of the difficult questions with the plan to answer them later. You should make a serious effort to answer each question before moving on to the next one since your thoughts are often clearer earlier on during the exam.

How to Study for the Series 53 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, the Solomon Series 53 Audiobook will be launching soon! The Audiobook is a word-for-word reading of the Study Guide.
    • Take chapter quizzes in the Exam Simulator. When you finish reading a chapter in the Study Guide, take 4–6 chapter quizzes in the Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales.
    • Take full practice exams in the Exam Simulator. When you’ve finished reading the entire Study Guide, review your handwritten notes once more. Finally, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least 80%. When you reach that point, you’re probably ready to sit for the Series 53 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10–15 minutes. Studies show that taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another proven method to reinforce memory and strengthen learning.
    • Research. Research anything you don’t understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they don’t understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Become the teacher. Studies show that explaining what you’re learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions, or explain it out loud to yourself. This helps almost as much as explaining to an actual person (see Solomon’s previous blog post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Series 53 Resources folder in your Solomon student account has helpful study tools, including documents that summarize important exam concepts. There’s also a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Use Ask the Professor. If you have a content-related question, click the Ask the Professor button in your account dashboard and get personalized help from a Solomon professor.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you’re studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you’re studying for the Series 53: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the MSRB Series 53 Exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming a Municipal Securities Principal!

Explore all Solomon Exam Prep Series 53 study materials, including the Study Guide and Exam Simulator.

And join the Solomon email list to find out when the Series 53 Audiobook is released! Just click the button below:

How to Pass the MSRB Series 52 Exam

What is the Series 52 exam? Learn what a Series 52 license qualifies you to do, what the exam covers, and how you should prepare for it. Continue reading

What is the Series 52 exam?

If you work for a municipal securities dealer and want to underwrite, trade, and sell municipal securities, then you’ll need to pass the Series 52 exam. You’ll also need to pass the Series 52 exam if you work for a municipal dealer and want to do the following activities:

    • Offer financial advice and consultant services to issuers of municipal securities
    • Conduct research and give investment advice on municipal securities
    • Communicate directly or indirectly with public investors about municipal securities

Also known as the Municipal Securities Representative Qualification Examination, the Series 52 was created by the Municipal Securities Rulemaking Board (MSRB). The MSRB is the principal regulator of the municipal securities market. It establishes rules and professional qualification standards for municipal securities dealers and municipal advisors. Those standards include qualification exams for professionals who work in the municipal securities industry. Passing the Series 52 qualifies you to work as a Municipal Securities Representative.

What are municipal securities?

Governments need to finance their activities by raising money, but they can’t sell stocks like businesses. Instead, governments issue municipal bonds (munis) to fund day-to-day operations and special projects.

Are there any prerequisites for the Series 52?

Yes. To become a Municipal Securities Representative, you must also pass the FINRA Securities Industry Essentials (SIE) exam. The SIE is an entry-level securities qualification exam. Unlike the Series 52, you don’t need to be employed and sponsored by a broker-dealer to take the SIE. It’s “co-requisite” with the Series 52, so you can take the exams in any order, but Solomon recommends you take the SIE first. The SIE is a foundational exam, and the knowledge you learn studying for the SIE will help you when you study for the Series 52.

About the Exam

The Series 52 exam consists of 75 scored and five unscored multiple-choice questions covering the three topic areas of the MSRB Series 52 Content Outline. The five additional unscored questions are ones that the exam committee is trying out. These are unidentified and are distributed randomly throughout the exam.

About the Series 52 exam

Note: Scores are rounded down to the next lowest whole number (e.g. 69.9% would be a final score of 69% – not a passing score for the Series 52 exam).

Topics Covered on the Exam

The MSRB divides the questions on the Series 52 exam into three main areas:

Topics on the Series 52 exam

Within these three main parts, you’ll need to learn about many topics, including:

    • Municipal bonds
    • Municipal fund securities
    • MSRB rules
    • Customer accounts
    • Municipal securities trading
    • Recordkeeping
    • Suitability
    • Settlement and delivery
    • Taxation
    • Federal securities acts
    • The SEC
    • Municipal securities underwriting
    • Marketability
    • Political contribution rules
    • Supervisory obligations
    • Market indicators
    • Economic theory
    • Fiscal and monetary policy
    • Interest rates
    • Business cycles
    • The Federal Reserve Board

The MSRB updates its exam questions regularly to reflect the most current rules and regulations. Solomon recommends that you print out the current version of the MSRB Series 52 Content Outline and use it in conjunction with the Solomon Series 52 Study Guide. The Content Outline is subject to change without notice, so make sure you have the most recent version.

Question Types on the Exam

The Series 52 exam consists of multiple-choice questions, each with four options. You will see these question structures:

Closed Stem Format:

This item type asks a question and gives four possible answers to choose from.

Which of the following is a reason that a municipal government might issue a revenue bond instead of a general obligation bond?

    1. The issuer wishes to pay less interest to the bondholders.
    2. The issuer has met its statutory debt limit and does not want to seek voter approval for the issue.
    3. The issuer wants the bond to have a higher credit rating.
    4. The issuer has the ability to impose taxes.
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four possible conclusions.

A make whole call provision is a provision in a bond that allows the issuer to:

    1. Call the bond and pay the bondholder a lump sum payment that includes not just the principal but also the net present value of all future coupon payments that the bondholder would have received if not for the call.
    2. Call the bond and pay the bondholder a lump sum payment that includes the call price of the bond.
    3. Redeem the entire issue early to issue a new set of bonds at a lower interest rate.
    4. Call the bond when the total amount of the interest payments is equivalent to the amount of the principal.
“EXCEPT” Format:

This type requires you to recognize the one choice that is an exception among the four answer choices.

A financial advisor may buy securities from an underwriter for its own or its customers’ accounts if all of the following are true except:

    1. The advisor must not receive any additional underwriting compensation when buying securities for their own account.
    2. The advisor must not receive any additional underwriting compensation when buying securities for customer accounts.
    3. The advisor must disclose the conflict of interest to their customers at or before confirmation of the sale.
    4. The advisor must disclose the conflict of interest to the issuer.
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

_________ risk is a concern for bondholders when interest rates _________.

    1. Interest rate; rise
    2. Call; rise
    3. Interest rate; fall
    4. Call; fall
    1. II and IV
    2. II and III
    3. I and IV
    4. I and III
  1.  

Answers: 1. B   2. A   3. D   4. C

For an even better idea of the possible question types you might encounter on the Series 52 exam, try Solomon Exam Prep’s free Series 52 Sample Quiz.

Taking the Series 52 Exam

The Financial Industry Regulatory Authority (FINRA) administers the Series 52 exam, and you must take it at a Prometric test center. Like all qualifying exams in the securities industry, the Series 52 is closed-book, and you’re not allowed to bring anything into the exam. The test center will provide you with any materials you need to complete the exam. For instance, the test center will likely provide a whiteboard with markers or scratch paper and a pencil, as well as a basic electronic calculator. The inspection and sign-in requirements at test centers are stringent, so plan to arrive at least 30 minutes before your scheduled test appointment.

Test-Taking Tips

When taking the exam, it helps to keep some test-taking strategies in mind. Try not to spend too long on one question—this may cause you to run out of time and not get to other questions you know. If you don’t know the answer to a question, guess at the answer and “flag” it. There’s no penalty for guessing, so it’s beneficial to answer every question.

After you’ve finished all the questions, you can come back to any flagged questions. This strategy allows you to efficiently answer the ones you know. You might also learn something later in the exam that helps you answer an earlier question. Just remember to save enough time to return to the questions you didn’t answer. However, it’s not a good idea to simply skip all of the difficult questions with the plan to answer them later. You should make a serious effort to answer each question before moving on to the next one since your thoughts are often clearer earlier on during the exam.

How to Study for the Series 52 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, the Solomon Series 52 Audiobook will be launching soon! The Audiobook is a word-for-word reading of the Study Guide.
    • Answer practice questions in the Exam Simulator. When you finish reading a chapter in the Study Guide, take 4–6 chapter quizzes in the Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales. When you’re finished reading the entire Study Guide, review your handwritten notes once more. Finally, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least 80%. When you reach that point, you’re probably ready to sit for the Series 52 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10–15 minutes. Studies show that taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another proven method to reinforce memory and strengthen learning.
    • Research. Research anything you don’t understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they don’t understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Become the teacher. Studies show that explaining what you’re learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions, or explain it out loud to yourself. Studies show this helps almost as much as explaining to an actual person (see Solomon’s previous blog post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Series 52 Resources folder in your Solomon student account has helpful study tools, including documents that summarize important exam concepts. There’s also a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Use Ask the Professor. If you have a content-related question, click the Ask the Professor button in your account dashboard and get personalized help from a Solomon professor.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you’re studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you’re studying for the Series 52: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the MSRB Series 52 Exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming a municipal securities representative!

Explore all Solomon Exam Prep Series 52 study materials, including the Study Guide and Exam Simulator.

And join the Solomon email list to find out when the Series 52 Audiobook is released! Just click the button below:

How to Pass the NASAA Series 63 Exam

Thinking about taking the Series 63 exam? Keep reading to learn what the Series 63 qualifies you to do, what the exam covers, and how you should prepare for it. Continue reading

The Series 63, also known as the Uniform Securities Agent State Law Exam, is the state law test for broker-dealer representatives. Passing the Series 63 is required by most U.S. states if you want to register in a state as a registered representative. However, to be fully registered, you may also need to pass the FINRA Securities Industry Essentials (SIE) exam and the Series 6, 7, 22, 52, 79, 82, or 99. For example, if you plan to sell securities for a broker-dealer, you must pass the Series 6 or 7 (plus the co-requisite SIE) in addition to the Series 63.

The Series 63, Series 65, and Series 66 exams were all created by NASAA, which represents state securities regulators in the U.S., Canada, and Mexico. The goal of NASAA is to protect and educate investors to promote the integrity of financial markets. In terms of content, there is a fair amount of overlap between the exams, but each one qualifies individuals a bit differently.

What’s the difference between the Series 63, Series 65, and Series 66 exams?

Of the three exams, the Series 63 is the shortest, at 65 questions. The Series 63 exam covers the registration of persons and securities under the Uniform Securities Act and ethics in the securities industry. As mentioned above, passing the Series 63 permits you to sell securities in a particular state, but you must also pass a FINRA exam (often the Series 6 or 7) in order to become fully registered. For instance, if you pass the Series 6 and Series 63, you are qualified to become a financial adviser or insurance agent who also sells mutual funds and works at a brokerage, investment firm, bank, or insurance company. On the other hand, with the Series 7 and Series 63, you can work as a stockbroker at a brokerage, investment firm, or bank.

If you want to register as an investment adviser representative (IAR), you will need to pass the Series 65 or 66, depending on the state. Some states allow registered brokerage representatives to act as IARs. In these states, if you’ve passed the Series 7, then the 66 will qualify you to become a licensed IAR. If you have NOT passed the Series 7 and want to become an IAR, then you’ll need to take the Series 65 exam. The Series 65 exam contains much of the same information as the Series 7, and it also tests your knowledge of the state laws governing investment advisers. The Series 66 does not cover much of the information from the Series 7, but it does test your knowledge of state laws governing investment advisers. As result, the Series 66 is shorter than the Series 65 (100 questions compared to 130).

If you’re not sure whether you need to pass the Series 63, 65, or 66 for a particular state, check with the state regulator for specific requirements. This page on the NASAA website lists contact information for all state regulators.

About the Exam

The Series 63 exam consists of 60 scored and 5 unscored multiple-choice questions covering the eight topic areas of the Series 63 Content Outline. The 5 additional unscored questions are ones that the exam committee is trying out. These are unidentified and are distributed randomly throughout the exam.

Note: Scores are rounded down to the next lowest whole number (e.g. 71.9% would be a final score of 71% – not a passing score for the Series 63 exam).

Topics Covered on the Exam

The questions on the Series 63 exam cover the following content areas, as determined by NASAA:

Series 63 exam topics

NASAA updates its exam questions regularly to reflect the most current rules and regulations. Solomon recommends that you print out the current version of the NASAA Series 63 Content Outline and use it in conjunction with the Solomon Series 63 Study Guide. The Content Outline is subject to change without notice, so make sure you have the most recent version.

Question Types on the Exam

The Series 63 exam consists of multiple-choice questions, each with four options. You will see these question structures:

Closed Stem Format:

This item type asks a question and gives four possible answers from which to choose.

Typically, how long must an investment adviser keep records?

    1. Three years
    2. Five years
    3. Six years
    4. For the lifetime of the firm
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four options that present possible conclusions.

A broker-dealer registered in one state whose only office is located in that state does not need to register in another state if it has:

    1. Less than $50,000,000 in assets
    2. Over $100,000,000 in assets
    3. No non-institutional clients in that state
    4. Five or fewer non-institutional clients in that state
“EXCEPT” Format:

This type requires you to recognize the one choice that is an exception among the four answer choices presented.

All of the following are exempt from registration under the Investment Advisers Act of 1940 except:

    1. A broker-dealer that charges a fee for investment advice
    2. A publisher that charges a fee to write a column about investments
    3. A lawyer that gives investment advice as part of overseeing a client’s estate
    4. A teacher who is paid to teach a class that offers instruction on how to construct a portfolio
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

Which of the following are types of orders issued by an administrator?

    1. Stop order
    2. Cease and desist order
    3. Resume order
    4. Criminal order
    1. I only
    2. II only
    3. I and II
    4. III and IV
  1.  

Answers: 1. B   2. C   3. A   4. C

For an even better idea of the possible question types you might encounter on the Series 63 exam, try Solomon Exam Prep’s free Series 63 Sample Quiz.

Taking the Series 63 Exam

The Series 63 exam is administered by FINRA and can be taken at a Prometric test center or remotely online using Prometric’s ProProctor system. If taking the exam at a test center, you will be given a dry erase pen and whiteboard or a pen and scratch paper, and a basic electronic calculator. You cannot bring notes, paper, or your own calculator. Phones and watches are not permitted either. Due to COVID-19, you are required to wear a mask the whole time you are at the test center. Solomon recommends taking timed practice exams in the Series 63 Exam Simulator while wearing a mask to get used to this added discomfort.

If you’re thinking about taking the test from the comfort of your own home or office with ProProctor, it’s important to be aware of the strict procedures you must follow. See this user guide for complete details. And for a first-hand account of the remote testing experience, read this Solomon blog post.

Test-Taking Tips

Whether you take the exam in person or online, it helps to keep some test-taking strategies in mind. Don’t spend too long on one question—this may cause you to run out of time and not get to other questions you know. If you don’t know the answer to a question, guess at the answer and “flag” it. There is no penalty for guessing, so it is beneficial to answer every question.

After you have finished all the questions, you can come back to any flagged questions. Not only does this strategy allow you to efficiently answer the ones you know, but it can also help because you might learn something later in the exam that may help you answer an earlier question. Just remember to save enough time to return to the questions you didn’t answer. However, it is not a good idea to simply skip all of the difficult questions with the intention of answering them later. You should make a serious effort to answer each question before moving on to the next one, as your thoughts are often clearer early on in the exam-taking process than they will be later.

How to Study for the Series 63 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. The Series 63 is a knowledge test, not an IQ test. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, listen to the Series 63 Audiobook, which is a word-for-word reading of the Study Guide.
    • Answer practice questions in the Exam Simulator. When you’re done with a chapter in the Study Guide, take 4–6 chapter quizzes in the Solomon Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales. When you’re finished reading the entire Study Guide, review your handwritten notes once more. Then, and only then, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your Solomon Pass Probability score to at least an 80%; when you reach that point, you are probably ready to sit for the Series 63 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10 to 15 minutes. Studies show that the act of taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another powerful and proven method to reinforce memory and strengthen learning. Solomon also offers digital flashcards for the Series 63 exam.
    • Research. Research anything you do not understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they do not understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Become the teacher. Studies show that explaining what you are learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions. If you don’t have anyone, explain it to yourself. Studies show that helps almost as much as explaining to an actual person (see Solomon’s previous blog post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Series 63 Resources folder in your Solomon student account has helpful study tools, including documents that summarize important exam concepts. There is also a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Watch the Video Lecture. This provides a helpful review of the key concepts in each chapter after reading the Solomon Study Guide. Take notes to help yourself stay focused.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you are studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you are studying for the Series 63: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the NASAA Series 63 Exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming qualified to sell securities within a state!

Explore all Solomon Exam Prep Series 63 study materials, including the Study Guide, Exam Simulator, Audiobook, Video Lecture and Flashcards.

Looking for more support as you prepare for the Series 63 exam? Solomon offers Live Web Classes for the Series 63

For more helpful securities exam-related content, study tips, industry updates, and promotional offers sent directly to your inbox, join the Solomon email list. Just click the button below:

How to Pass the MSRB Series 50 Exam

How do you prepare for a challenging securities exam like the Series 50? Solomon shares insights about the test and how to study successfully. Continue reading

The Series 50, also known as the Municipal Advisor Representative Qualification Examination, was developed by the Municipal Securities Rulemaking Board (MSRB) to set professional standards and ensure a basic level of industry knowledge for municipal advisor representatives. Passing the Series 50 exam qualifies you to provide advice about municipal financial products to, or on behalf of, municipal entities. That means you will be able to help municipalities through the process of issuing securities and advise them on how to invest their proceeds. 

The registration category, “Municipal Advisor Representative,” was created to comply with the Dodd-Frank Act, which Congress passed in response to the 2008 financial crisis. Municipal advisor firms must have at least one individual who has passed the Series 50 in order to engage in municipal advisory activities. 

Whether you have years of professional experience, or you’re just starting out in the industry, the Series 50 can be a challenging exam and requires ample study time. Solomon recommends studying for 60 hours over a four-week period. That might seem daunting, but understanding what the test is like and how to study for it will set you on the path to being well-prepared for exam day.

About the Exam

The Series 50 exam consists of 100 scored and 10 un-scored multiple-choice questions covering the five topic areas of the MSRB Series 50 Content Outline. The 10 additional un-scored questions are ones that the exam committee is trying out. These are unidentified and are distributed randomly throughout the exam. Before the test starts, you have 30 minutes to watch a tutorial about the exam’s administration, and this time is included in the total exam time of three and one-half hours.

Series 50 exam details

Note: Scores are rounded down to the next lowest whole number (e.g. 70.9% would be a final score of 70% – not a passing score for the Series 50 exam).

Topics Covered on the Exam

The questions on the Series 50 exam cover the five major job functions of a municipal advisor representative, as determined by the MSRB:

Series 50 exam topics

The MSRB updates its exam questions regularly to reflect the most current rules and regulations. Solomon recommends that you print out the current version of the MSRB Series 50 Content Outline and use it in conjunction with the Solomon Series 50 Study Guide. The Content Outline is subject to change without notice, so make sure you have the most recent version.

Question Types on the Exam

The Series 50 exam consists of multiple-choice questions, each with four options. You will see these question structures:

Closed Stem Format:

This item type asks a question and gives four possible answers from which to choose.

Which of the following is true of the MSRB?

    1. The MSRB creates rules that govern issuers of securities.
    2. The MSRB is composed of 20 members who are knowledgeable about municipal securities.
    3. The MSRB does not have the power to enforce its own regulations.
    4. The MSRB was created by the Securities Exchange Act of 1934.
Incomplete Sentence Format:

This kind of question has an incomplete sentence followed by four options that present possible conclusions.

Advisors prohibited from engaging in municipal advisory business under the pay to play rule may qualify for an automatic exemption if:

    1. The advisor discovered the contribution within a reasonable time from the date it was made.
    2. The contribution did not exceed $250.
    3. The person who made the contribution obtained its return before the advisor discovered the contribution.
    4. The advisor has only used three automatic exceptions in the last 12 months.
“EXCEPT” Format:

This type requires you to recognize the one choice that is an exception among the four answer choices presented.

All of the following might be found in the MD&A except:

    1. A summary of the major events of the year for the municipality
    2. A comparison of the current financial year to the previous one
    3. An organizational chart of governmental employees
    4. A discussion of whether the budget was met or exceeded
Complex Multiple-Choice (“Roman Numeral”) Format:

For this question type, you see a question followed by two or more statements identified by Roman numerals. The four answer choices represent combinations of these statements. You must select the combination that best answers the question.

Which of the following are true?

    1. Municipal advisors may, under certain circumstances, act as underwriters.
    2. Underwriters may, under certain circumstances, act as municipal advisors.
    3. Municipal advisors may never act as underwriters.
    4. Underwriters may never act as municipal advisors.
    1. I and IV
    2. II and III
    3. I and II
    4. III and IV
  1.  

Answers: 1. C   2. B   3. C   4. B

For an even better idea of the possible question types you might encounter on the Series 50 exam, try Solomon Exam Prep’s free Series 50 Sample Quiz.

Taking the Series 50 Exam

The Series 50 exam is administered by FINRA and must be taken at a Prometric test center. Like all qualifying exams in the securities industry, the Series 50 is closed book, which means you are not permitted to bring anything into the exam. The test center will provide you with any materials needed to complete the exam. For instance, the test center will likely provide a whiteboard with markers or scratch paper and a pencil, as well as a basic electronic calculator. 

The inspection and sign-in requirements at test centers are stringent, so plan to arrive at least 30 minutes before your scheduled test appointment. Due to COVID-19, you are required to wear a mask the whole time you are at the test center. Solomon recommends taking timed practice exams in the Series 50 Exam Simulator while wearing a mask to get used to this added discomfort.

Test-Taking Tips

When taking the exam, it helps to keep some test-taking strategies in mind. Try not to spend too long on one question—this may cause you to run out of time and not get to other questions you know. If you don’t know the answer to a question, guess at the answer and “flag” it. There is no penalty for guessing, so it is beneficial to answer every question.
 
After you have finished all the questions, you can come back to any flagged questions. Not only does this strategy allow you to efficiently answer the ones you know, but it can also help because you might learn something later in the exam that may help you answer an earlier question. Just remember to save enough time to return to the questions you didn’t answer. However, it is not a good idea to simply skip all of the difficult questions with the intention of answering them later. You should make a serious effort to answer each question before moving on to the next one, as your thoughts are often clearer early on in the exam-taking process than they will be later.

How to Study for the Series 50 Exam

Follow Solomon Exam Prep’s proven study system:
    • Read and understand. Read the Solomon Study Guide, carefully. The Series 50 is a knowledge test, not an IQ test. Many students read the Study Guide two or three times before taking the exam. To increase your ability to focus while reading, or as an alternative to reading, listen to the Series 50 Audiobook, which is a word-for-word reading of the Study Guide.
    • Answer practice questions in the Exam Simulator. When you’re done with a chapter in the Study Guide, take 4–6 chapter quizzes in the Solomon Exam Simulator. Use these quizzes to give yourself practice and to find out what you need to study more. Make sure you read and understand the question rationales. When you’re finished reading the entire Study Guide, review your handwritten notes once more. Then, and only then, start taking full practice exams in the Exam Simulator. Aim to pass at least six full practice exams and try to get your average score to at least an 80%; when you reach that point, you are probably ready to sit for the Series 50 exam.
Use these effective study strategies:
    • Take handwritten notes. As you read the Study Guide, take handwritten notes and review your notes every day for 10 to 15 minutes. Studies show that the act of taking handwritten notes in your own words and then reviewing them strengthens learning and memory.
    • Make flashcards. Making your own flashcards is another powerful and proven method to reinforce memory and strengthen learning.
    • Research. Research anything you do not understand. Curiosity = learning. Students who take responsibility for their own learning by researching anything they do not understand get a deeper understanding of the subject matter and are much more likely to pass.
    • Become the teacher. Studies show that explaining what you are learning greatly increases your understanding of the material. Ask someone in your life to listen and ask questions. If you don’t have anyone, explain it to yourself. Studies show that helps almost as much as explaining to an actual person (see Solomon’s previous blog post to learn more about this strategy!).
Take advantage of Solomon’s supplemental tools and resources:
    • Use all the resources. The Series 50 Resources folder in your Solomon student account has helpful study tools, including documents that summarize important exam concepts. There is also a detailed study schedule that you can print out – or use the online study schedule and check off tasks as you complete them.
    • Watch the Video Lecture. This provides a helpful review of the key concepts in each chapter after reading the Solomon Study Guide. Take notes to help yourself stay focused.
  • Good practices while studying:
    • Take regular breaks. Studies show that if you are studying for an exam, taking regular walks in a park or natural setting significantly improves scores. Walks in urban areas or among people did not improve test scores.
    • Get enough sleep during the period when you are studying. Sleep consolidates learning into memory, studies show. Be good to yourself while you are studying for the Series 50: exercise, eat well, and avoid activities that will hurt your ability to get a good night’s sleep.

You can pass the MSRB Series 50 Exam! It just takes focus and determination. Solomon Exam Prep is here to support you on your path to becoming a municipal advisor representative.

Explore all Solomon Exam Prep Series 50 study materials, including the Study Guide, Exam Simulator, Audiobook, and Video Lecture.

Looking for more support as you prepare for the Series 50 exam? Solomon offers Live Web Classes for the Series 50

For more helpful securities exam-related content, study tips, industry updates, and promotional offers, join the Solomon email list. Just click the button below:

Solo 401(k), SEP, & SIMPLE: Retirement Plans for Small Businesses

Be prepared for questions about SIMPLE, SEP, and solo 401(k) retirement account plans on the FINRA Series 6 and Series 7 exams. Continue reading

If you are studying for the FINRA Series 6 or Series 7 exam, you will need to learn about the different types of retirement plan accounts. A retirement account may be an individual plan that is managed by the participant or the participant’s agent, such as an investment firm or a trust bank. Or it may be employer-sponsored, meaning that it is organized and managed by the participant’s employer.
  
Private employers of any size and structure, from the largest C corporation to a sole proprietorship consisting of a single self-employed individual, may set up and use an employer-sponsored retirement plan. For small business owners, retirement plans offer significant tax advantages and can help attract employees. Since there are several types of retirement plans available for small businesses, it’s important to understand the features of each option. Three plans commonly chosen by small businesses are solo 401(k) plans, SEP plans, and SIMPLE plans.

Solo 401(k) Plans  

A business owner can open a solo 401(k) if the business does not employ anyone else. The owner of the business creates a 401(k) plan much like any other employer. Then, as an employee, the owner opens a 401(k) account within that plan.
 
Both employer and employee contributions can be made in a solo 401(k). The maximum employee contribution is the same as for other 401(k)s. As of 2022, this limit is $20,500 per year, with a catch-up contribution of $6,500 for those aged 50 and above. As an employer, the maximum annual contribution is 25% of what the owner pays herself. The combined annual contribution (employee and employer) cannot exceed $61,000.
 
The business owner is allowed to employ her spouse and still make use of a solo 401(k) plan. The spouse can open their own 401(k) account using the business’s solo 401(k) plan. A solo 401(k) can be created whether the business is set up as a corporation, LLC, or sole proprietorship. Self-employed people who haven’t set up a business can also create a solo 401(k), although their contribution limits are calculated differently.
  
Unlike most employer-sponsored retirement plans, solo 401(k)s do not need to comply with ERISA (the Employee Retirement Income Security Act). This is a federal law that requires employers to give employees fair access to the employer’s retirement plan. These concerns do not apply when the business has no other employees.

SEP 

Simplified Employee Pension (SEP) plans are IRA-based retirement plans for any size business but are usually favored by small businesses. Under this type of plan, the business owner can make pre-tax contributions into IRA accounts set up for eligible employees and also for herself if the owner is self-employed.

The plan allows employers to skip contributions in years when business is bad, but if the owner makes a contribution for herself, she must also make contributions for her employees. When contributions are made, they must be made for all participants who actually performed work during the year for which the contributions are made, including those over 72 years of age (the latter feature is unique to the SEP plan). Contributions for all participants generally must be uniform, for example the same percentage of hourly wage.
 
The business owner can make contributions of up to 25% of an employee’s salary, or an annual maximum of $61,000, whichever is less. Only the employer, and not the employee, makes contributions to the SEP IRA, but an employee is always 100% vested in his SEP IRA. Generally, the employer can take an income tax deduction for contributions made to each employee’s SEP. SEP contributions are not included on the employee’s W-2 statement for tax purposes. Rules for withdrawal of funds are generally the same as for any other IRA, meaning that withdrawals are subject to income taxes, and early withdrawals are usually subject to a penalty.

SIMPLE 

Savings Incentive Match Plan for Employees (SIMPLE) plans are retirement plans for businesses having no more than 100 employees. With a SIMPLE IRA or SIMPLE 401(k), the employee may make pre-tax contributions to the plan. The contribution is expressed as a percentage of the employee’s compensation and is limited to $14,000 a year ($17,000 for employees aged 50 and over). The employer is required to either match these contributions up to 1% to 3% of the employee’s compensation or to contribute 2% whether the employee makes a contribution or not. The employer chooses which type of contribution (and if matching, the maximum percentage it will match). This choice applies to all employees. So an employer who chooses matching contributions is not obligated to contribute 2% to an employee who chooses not to contribute.
 
Any employee who previously earned at least $5,000 during any two years and is reasonably expected to receive at least $5,000 during the current calendar year is eligible to participate in this plan. Unlike the SEP plan, however, premature SIMPLE IRA distributions (withdrawals of account funds) will incur a 25% penalty in the first two years the account exists if made before age 59 1/2.
 
While the SEP plan is discretionary, in that the employer can decide when to fund the plan, funding the SIMPLE IRA plan is mandatory, no matter what kind of year the business had. A SIMPLE 401(k) functions similarly to a SIMPLE IRA. Both have the same contribution limits and are 100% vested from the beginning.

Good to know:

SEP and SIMPLE IRAs have characteristics in common with traditional IRAs. For example, contributions are generally made with pre-tax dollars, must be earned income, and must only be in cash. Taxes on contributions and earnings are deferred until withdrawal, as long as withdrawals occur after the age of 59 1/2. Required minimum distributions (RMDs) must begin the year the participant turns age 72, although the participant may choose to delay the first payment until April 1 of the following year. After that, RMDs must be taken by December 31 each year. Funds can be distributed as a lump sum or in periodic payments. If the account owner fails to withdraw an RMD or the full amount of the RMD before the deadline, the amount not withdrawn is taxed at 50%.

Common Retirement Plans for Small Businesses

Anyone who plans to become a registered representative by passing the Series 6 or Series 7 exam and assist customers with retirement plans must understand the complexity of retirement planning. The Solomon Exam Prep Series 6 Study Guide and Series 7 Study Guide both cover retirement plan accounts so that you can be prepared for questions about this topic on exam day. Visit the Solomon website to explore study materials for 21 different securities exams, including the Series 6 and 7.