Principals at municipal advisor firms must pass the Series 54 exam by November 30, 2021, to continue acting as principals. Continue reading
As we covered in a previous blog post on the Solomon Industry News Blog, the Municipal Securities Rulemaking Board (MSRB) had announced plans to push back the deadline for municipal advisor principals to take the new Series 54 exam. However, the MSRB did not say how much of an extension they intended to give.
Now we know. On September 2, the MSRB filed a request with the SEC to extend the Series 54 deadline from November 12 toNovember 30.
The SEC must still approve the extension before it becomes official.
UPDATE – September 30, 2021:The MSRB issued a notice stating that November 30, 2021, is the deadline for passing the Series 54 exam.
Principals at municipal advisor firms must pass the Series 54 exam by November 12, 2021, to continue acting as principals. Continue reading
When the Municipal Securities Rulemaking Board (MSRB) created an exam specifically for principals at municipal advisor (MA) firms, the plan was for all MA principals to take it within a year.
The exam, known as the Series 54, was first made available on November 12, 2019. The MSRB required that all MA principals who wanted to continue acting as principals would have to pass the Series 54 by November 12, 2020.
But like many plans in 2020, the MSRB’s plan for the Series 54 was disrupted by Covid-19. With FINRA testing centers shut down for months, and uncertainty regarding when testing would resume, the MSRB added a one-year grace period to its original deadline. MA principals would now have until November 12, 2021, to pass the Series 54 exam.
The regulator recently reminded MA firms that “those who engage in the management, direction or supervision of…municipal advisory activities” will need to pass the Series 54 on or before November 12.
UPDATE: On August 11, the MSRB announcedthat it would seek SEC approval for an additional extension. The MSRB did not say how long the planned extension would be, but the regulator plans to announce this by September 10. The MSRB also announced an “interim accommodation” allowing those who need to take the Series 54 exam online to do so. Details about how to apply for this accommodation will be posted on MSRB.org no later than August 20.
UPDATE: On September 2, the MSRB announced that it has filed a request with the SEC to extend the Series 54 deadline from November 12 to November 30, 2021. View the blog post about this announcement here.
What is a Municipal Advisor?
A municipal advisor, or MA, differs from a municipal securities dealer in that an MA does not underwrite and sell municipal securities. Instead, an MA gives advice about structuring an issue of municipal securities, selecting an underwriter, investing the proceeds, and related matters. Unlike a municipal securities dealer, an MA is the municipality’s fiduciary, which means that the MA must put the municipality’s interests before its own. MAs became regulated in a manner like municipal securities dealers as one of the reforms resulting from the 2008 financial crisis.
When MAs first came under the MSRB’s jurisdiction, the MSRB only had one qualification exam for MA personnel: the Series 50, which is taken by representatives and principals alike. During the grace period, principals who have only passed the 50 have been allowed to continue as principals. After the deadline, MA principals will need to have passed both the Series 50 and the Series 54.
Solomon Exam Prep has helped hundreds pass the Series 50 and Series 54 exams.
Solomon offers an innovative suite of exam prep products for the Series 54 to help you pass this difficult test, plus a step-by-step study schedule to tell you how to do it. Choose from an easy-to-understand Study Guide, an Exam Simulator with hundreds of relevant practice questions and detailed rationales, and a Video Lecture to help you learn and highlight the most critical information for the exam.
Solomon recommends at least 40 hours of studying to give yourself the best chance at passing this challenging principal exam.
Do yourself a favor and start studying well before the deadline, and let Solomon help you on your road to success! Explore Solomon’s Series 54 study materials by clicking the link below.
FINRA partner Prometric has developed ProProctor for online, remote test taking. Here are some takeaways about the process. Continue reading
Lucas Rumpeltes of Solomon Exam Prep passed the SIE Exam with ProProctor
Updated May 26, 2022
In person licensing exams have been a staple in the securities industry for decades, but with the novel Coronavirus COVID-19, FINRA has been tasked with providing a safer method for testing. Given this, FINRA partner Prometric has developed a new product titled ProProctor for online, remote test taking. Prometric is a giant in the testing industry, and operates hundreds of testing centers.
With all this as the backdrop, one month ago I was tasked with studying for and taking the Securities Industry Essentials (SIE) exam as a junior associate at Solomon Exam Prep. Using the ProProctor product seemed like the most convenient way to take the exam, and proved easy enough. However, for the benefit of Solomon exam takers, I would like to share some takeaways about the process.
Before Exam Day
Signing up for the exam
I registered for the test three weeks ahead of time on the Prometric website. There were still many time slots available, but the most convenient ones had been taken. The most feasible slot for me ended up being at 7:45 AM, so if you prefer to test later in the day, register ahead of time!
I immediately received a confirmation email detailing all of the procedures that I would need to follow for test day. It was a lengthy email. This is due to Prometric’s desire to avoid cheating and duplication of the test, so they are rightfully cautious. This ProProctor user guide contains all the procedures. That being said, there are a few procedures that are very important to understand ahead of time.
Preparing for exam day
First is your testing environment. Ideally one is able to test in a bare, white room, at a desk, with no decorations of any kind. However, this is not always possible, so it is helpful to have a bed sheet or tarp on hand to cover anything that your proctor determines to be unacceptable. Furthermore, you cannot have any interruptions during the test, so it is imperative to notify your office mates!
Prometric also recommends having a mirror on hand for the check in process. Ultimately, this is simply for the purpose of inspecting your computer keyboard and screen if you cannot remove your webcam, so a medium-sized mirror is fine. The more easily you can position it in front of your screen the better (I did not take my own advice here and had a giant mirror, which was tough to position so that my proctor could see my keyboard).
Leading up to the exam day, you should do one of Prometric’s system readiness checks, test your microphone specifically, and download and install their application.
On Exam Day
Getting started
On exam day, you will follow a unique web link in your confirmation email to launch your exam. Once there, you will input user specific information, and it will automatically launch the application. Be warned, once you launch the exam application, you cannot access any other settings or applications on your computer, so adjust your volume or microphone controls ahead of time. Once there, you will be asked to photograph yourself and take a picture of your photo ID. Then you’ll be sent to the security proctor.
Ultimately two different proctors will communicate with you. The process for meeting with them is seamless, and they will answer any questions you may have.
Security checks
The first proctor will conduct the security checks, and you will have a webcam view of them. The security checks are detailed on the ProProctor website, as well as in the confirmation email, but here are a few tips. I wore pants with lots of pockets, which was a mistake. Wearing as few items of clothing as possible, with as few pockets as possible, is helpful because they will ask you to empty them. Additionally, they advise no jewelry. Ideally, the only things in the testing room are you, your photo ID, and your computer. There is nothing else allowed (with the exception of tests that have certified testing materials).
The security checks also include room checks, which necessitates either an external webcam or an easily portable laptop. The fewer furniture items in the room, the easier the check will be. Finally, the security proctor will detail their break policy. I did not use the break, and it should ultimately be seen as an emergency asset. The test time does not stop while you take it, and you will have to redo all security checks upon returning.
Taking the exam
Once all of the security protocol is over with, your security proctor will pass you on to another proctor. The new proctor will greet you via the application chat, but you will not see them on screen. They will, however, see your video and hear your audio. Additionally, they prohibit you from speaking out loud during the exam. You may mouth or whisper the words, but they do not allow you to speak.
Once the exam starts, it’s straightforward. There is a calculator in the application, as well as a “scratch pad” where you may type things. Be warned, you may not go back to questions once you move on. EDIT: As of September 28, 2020, candidates are able to go back to questions and change answers.
Trouble-shooting
When I was taking the SIE, I felt confident once I got to this point, since I was mostly worried about complying with the security checks. However, there is protocol from Prometric should you be disconnected from the application for any reason. I was disconnected with just six questions left (!), so it would have been helpful to know this ahead of time. Needless to say, I panicked. Prometric recommends a wired internet connection for this reason, but I gambled with wifi. Ultimately this was not the reason I was disconnected (my internet connection was fine), but the application automatically closed and I was forced to consult the FAQ.
From here, Prometric recommended that I check my internet connection, wait three minutes, restart my computer, and relaunch the exam. This proved to be perfect advice, and I was readmitted to the system. I had to re-do the entire security check with a new set of proctors, but my test time was paused and my progress had been saved. I finished my last six questions without a hitch. In other words, if you are disconnected, do not panic and simply follow their directions on the FAQ. If the issue persists, they recommend that you contact support.
As with the in-person exams, my preliminary results were shown at the conclusion of the exam, and I was free to continue with my work day. All in all, the process was relatively user-friendly, and well worth it since I was able to avoid going to a testing center.
It was previously announced that FINRA and NASAA had been working to introduce an online testing service as an alternative to candidates taking their exam at traditional test centers, to be launched Continue reading
It was previously announced that FINRA and NASAA had been
working to introduce an online testing service as an alternative to candidates
taking their exam at traditional test centers, to be launched on May 24th.
FINRA has now announced that this service, which is
currently in its pilot phase, requires further validation before it can be
implemented and therefore will not be launched on May 24th as
planned. This also means that there will be a delay in booking appointment
times for the five exams that will be included in its initial launch, including
the SIE, Series 6, Series 7, Series 63, and Series 66 exams.
FINRA has also updated policies for test candidates,
extending enrollment windows that have either expired, or are due to expire
between March 16th and June 30th, 2020. This includes all
FINRA, NASAA and MSRB exam enrollment dates, with affected enrollment windows
being systematically updated in CRD.
Prometric will continue to reopen test centers in accordance
with local, state and federal regulations. You can check their Site Openings page, which is
continually being updated. You can also read more about the Prometric policies
to ensure candidate safety on their Covid-19 Update page.
If your Solomon Exam Prep materials are due to expire
before June 1st, contact Customer Service on 503 601 0212 or by
email at info@solomonexamprep.com
for a complimentary extension until August 1st.
It has now been announced that FINRA and NASAA plan to implement a new remote testing service, which will allow exam candidates to take selected exams using a camera-equipped computer. Continue reading
Due to the COVID-19 pandemic, on March 17
Prometric closed its testing centers in the US and Canada, with these
closures being extended until May 31st. It has now been announced
that FINRA and NASAA plan to implement a new remote testing service, which will
allow exam candidates to take selected exams using a camera-equipped computer.
Exam testing will continue to be administered by Prometric, with their staff
supervising the exams via video and online monitoring tools.
While this
remote testing service is currently in its trial phase, FINRA plans to launch
the service “in the near future” for selected exams, including the SIE, Series
6, Series 7, Series 63 and Series 66. It is expected that further exams will be
included in the weeks following the launch of this innovative service.
Prometric
also announced that it plans to resume testing at certain test centers on May 1st,
with limited capacity to maintain safe social distancing protocols. Further
information will be updated on the Prometric
Coronavirus Update page.
Solomon Exam Prep is offering complimentary extensions for students who have Solomon study materials expiring before June 1st. Contact Customer Service at info@solomonexamprep.com or phone us on 503 601 0212 to have your Solomon study materials extended until August 1st.
In accordance with CDC and WHO guidelines, it was announced by Prometric that they will be extending the closure of their test centers nation-wide until May 31st Continue reading
In accordance with CDC and WHO guidelines, it was announced by Prometric that they will be extending the closure of their test centers nation-wide until May 31st, and plan to resume testing after that time. You can read more about the announcement on the Prometric website regarding these closures. Here, you will also find some helpful information about newly introduced social distancing policies and procedures to ensure safety during your testing appointment.
Solomon
Exam Prep understands the stress that this uncertainty can bring and wish to
offer free extensions for students who have materials due to expire before June
1st. We will extend these materials free of charge until August 1st.
Email info@solomonexamprep.com or
contact us by phone on 503 601 0212 to request your complimentary extension.
Solomon Exam Prep continues to support our customers during this time and
encourage you to contact us if you have any questions or concerns.
The North American Securities Administrators Association (NASAA) has announced that it will implement updates to the Series 63, Series 65 and Series 66 examinations on July 1, 2016. What has changed? Continue reading
The North American Securities Administrators Association (NASAA) has announced that it will implement updates to the Series 63, Series 65 and Series 66 examinations on July 1, 2016.
The changes are aimed at better aligning the skills and knowledge required by professionals in the securities industry.
The new exam outlines are similar to the current exam outlines, but some significant changes have been made.
What has changed?
Series 63
The weighting of the exam sections has been modified to put more emphasis on the registration of broker-dealers over investment advisers
Several new topics have been added which reflect an emphasis on communications with customers and cyber-security. Specifically, the following topics have been added or amended:
Exceptions for foreign B-Ds
B-D supervision of agents
Prospectus delivery requirements
Types of customer accounts
B-D and agent commissions
Cyber-security and data protection
Outside securities accounts
Due diligence for B-Ds
Regulation A amendment
Regulation D amendment
Series 65
The weighting of the exam sections has been modified to put slightly more emphasis on the characteristics of investment vehicles and slightly less emphasis on rules and regulations.
Several new topics have been added which expand the types of investment products and add regulations on electronic communications, cyber-security, pay-to-play and anti-money laundering. Specifically, the following topics have been added or amended:
Valuation of equity securities
Real estate investments
Viatical and life settlements
Structured products
Commodities and precious metals
QDROs
High frequency trading
Regulation A amendment
Regulation D amendment
Electronic communications and social media
B-D and agent commissions
Cyber-security and data protection
Pay-to-play rule
Anti-money laundering
Business continuity plans
Series 66
The passing score has been lowered from 75% to 73%.
The weighting of the exams sections has been modified to put slightly more emphasis on the characteristics of investment vehicles and slightly less emphasis on rules and regulations
Several new topics have been added which expand the types of investment products and add regulations on electronic communications, cyber-security, pay-to-play and anti-money laundering. Specifically, the following topics have been added or amended:
Valuation of equity securities
Technical analysis
Real estate investments
Viatical and life settlements
Structured products
Commodities and precious metals
QDROs
High frequency trading
Regulation A amendment
Regulation D amendment
Electronic communications and social media
B-D and agent commissions
Cyber-security and data protection
Pay-to-play rule
Anti-money laundering
How will this affect my Solomon Exam Prep products?
Solomon Exam Prep will be updating all products offered for the NASAA exams. For those students that currently have materials and are testing after July 1, 2016, we have added an addendum to their Resources folder (located on their student account), that includes all rule changes and updates.
Our Online Exam Simulator has already been adjusted to reflect the new changes, so students will see an option to take full exams structured prior to July 1 or after July 1 – this will allow for any and all students to utilize our products regardless of their anticipated exam date. We are always adding new questions to our database and that will be reflected in the Online Exam Simulator.
In the coming weeks we will also be releasing a new/ updated digital Study Guide that will reflect the upcoming changes. Any current students will have the option of having their digital Study Guide changed to the new edition at that time, or they can continue to study with our current edition and the supplied addendum.
If you have any questions about the changes or our materials, please do not hesitate to call our office at 503.601.0212 or email info@solomonexamprep.com.
FINRA Rule 2040 became effective August 24, 2015. It replaces NASD Rules 2420 and 1060(b). This change affects the Series 6, 7, 24, 26, 27, 28, 62, and 82 exams. Continue reading
FINRA Rule 2040 became effective August 24, 2015. It replaces NASD Rules 2420 and 1060(b). This change affects the Series 6, 7, 24, 26, 27, 28, 62, and 82 exams.
FINRA Rule 2040 explains that an entity must register as a broker-dealer in order to receive commissions and fees for a securities transaction, unless it is a transaction that does not require registration. FINRA does not explicitly outline which transactions do not require registration, but it states that member firms can make this determination on their own by:
Relying on releases, no-action letters, and interpretations from the SEC
Requesting a no-action letter from the SEC
Seeking a legal opinion
Rule 2040 further states that retired representatives may continue to be paid commissions on customer accounts if the representative and member have agreed upon the continuing payments before retirement.
Finally, Rule 2040 (c) states that members may conduct transactions with foreign finders as long as certain requirements are met, including:
The member firm is sure that the finder does not need to register as a broker-dealer in the U.S. and the compensation arrangement doesn’t violate foreign law
Neither the finder nor the customer is a U.S. citizen, and both live abroad
Customers receive a document disclosing the compensation paid to the finder by the member firm
Customers acknowledge receipt of this disclosure to the member firm in writing, which the firm retains and keeps available for inspection
Confirmation of each transaction indicates that a finder’s fee is being paid by written agreement
On September 25, 2015, FINRA implemented a new rule regarding the relationship between investment banking personnel and research analysts. FINRA rule 2241 replaces NASD Rule 2711 and NYSE Rule 472. NASD Rule 2711 was created to prevent investment bankers from pressuring research analysts at the investment bank to write favorable research reports about securities that the investment bank was distributing or planning to distribute. Continue reading
On September 25, 2015, FINRA implemented a new rule regarding the relationship between investment banking personnel and research analysts. FINRA rule 2241 replaces NASD Rule 2711 and NYSE Rule 472. NASD Rule 2711 was created to prevent investment bankers from pressuring research analysts at the investment bank to write favorable research reports about securities that the investment bank was distributing or planning to distribute.
The new rule is similar to the rules it replaces with a series of changes that will be implemented to further promote objective and reliable research.
The new rule requires member firms to establish, maintain and enforce written procedures regarding conflicts of interest between research analysts and other people within the firm (e.g., personnel from investment banking, trading and sales). The written policies and procedures should allow analysts to produce objective and reliable research that reflects their true opinions about the securities they are evaluating. The policies and procedures should prevent firms from using research to manipulate or condition the market.
Rule 2241 prevents investment banking personnel from reviewing research reports for factual accuracy before publication. This practice was allowed in the previous rule. Also, firms must specify in their policies and procedures if and when non-research personnel would be allowed to review a research report before publication. If such prepublication review by non-research personnel is permitted then a firm’s written policies and procedures must specify under what circumstances that would be necessary and appropriate. Under the new rule, a FINRA member firm’s written policies and procedures must prohibit pre-publication review of research reports by a subject company (i.e., an issuer) for purposes other than fact-checking.
The new rule says that firms must establish information barriers to ensure that research analysts are insulated from the review, pressure or oversight of other personnel, such as investment banking, sales, and trading. The rule also extends the prohibition on retaliation, preventing employees from retaliating against a research analyst for writing an unfavorable report.
Interestingly, the rule 2241 reduces the quiet periods for IPOs to 10 days for all underwriters and dealers involved in the IPO (it was formerly 40 days for managers and co-managers and 25 days for underwriters and dealers). The quiet period has been reduced to three days for managers or co-managers on follow-on offerings. During a quiet period, firms may not publish or distribute research reports about the issuer, and research analysts may not make public appearances about the issuer.
The new rule continues to prevent investment-banking personnel from supervising research analysts or exerting any influence over analysts’ compensation. In addition, research analysts may not participate in the solicitation of investment banking business. Moreover, research analysts may not communicate with a customer or prospective customer about an investment banking transaction in the presence of the firm’s management or investment banking department personnel. Similarly, investment-banking personnel are forbidden from directing a research analyst either to participate in soliciting investment-banking business or to communicate with a customer or prospective customer about an investment banking transaction.
Note: In 2012, the Jumpstart Our Business Startups (JOBS) Act loosened constraints on research analysts for emerging growth companies (EGCs), defined as businesses with less than $1 billion in revenue. Specifically, the JOBS Act prohibits regulators from imposing a quiet period on EGCs. This means that research analysts from an underwriting firm that participated in an emerging growth company’s IPO may make both public appearances and distribute research reports during the quiet period. If the company is an emerging growth company, a research analyst may attend a pitch meeting, but not participate in soliciting investment-banking business.
On May 22, 2015, FINRA issued guidance concerning communications with the public. Here are some notable points from the guidance… Continue reading
On May 22, 2015, FINRA issued guidance concerning communications with the public. Here are some notable points from the guidance.
Non-promotional communications (i.e. communications that do not promote or recommend a specific product or service) do not need to be filed with FINRA
Electronic forum posts are considered retail communication, but are specifically excluded from filing requirements
Template updates do not need to be filed with FINRA if all that changed was statistical information
Various non-material changes to previously filed communications do not require refiling the communication
A reprinted article does not need to be filed with FINRA
Promotional items that only have the name of a mutual fund are not considered “advertisements” under Rule 482
If a firm includes mutual fund performance in a retail communication or correspondence, they must also include the fund’s expense ratio
Firm must file retail communications regarding registered business development companies
A Series 26 registration does not permit a principal to approve retail communications concerning a business development company. The principal must have a Series 24, Series 9/10, or Series 39 registration instead.
