Table of Contents
SIE PREP | FINANCIAL REGULATION COURSES
The Series 24 — formally titled the General Securities Principal Qualification Examination — is the FINRA-administered licensing examination that qualifies an individual to supervise and manage the general securities business of a FINRA member broker-dealer firm, including the supervision of registered representatives, the review and approval of advertising and sales literature, the oversight of trading and market making activities, the supervision of investment banking operations, and the administration of the firm's overall regulatory compliance programme. Passing the Series 24 examination — in combination with the Securities Industry Essentials examination and an appropriate representative-level qualification examination — results in registration as a General Securities Principal under FINRA Rule 1220(a)(2), the registration category applicable to the broadest supervisory role in the broker-dealer framework. The Series 24 is the primary principal-level examination for securities industry supervisors and managers and is directly referenced on the SIE and Series 7 examinations in the context of the FINRA registration framework and the distinction between representative and principal registration categories.
Before examining the Series 24 specifically, the fundamental distinction between representative-level and principal-level registration must be understood — a distinction that is directly tested on securities licensing examinations.
A registered representative is an individual who engages in the securities business of a FINRA member firm — soliciting and executing securities transactions, providing investment recommendations, and communicating with customers about securities. Representative registration qualifies an individual to perform specific securities activities based on their examination category — the Series 7 General Securities Representative qualifies for all securities products while narrower representative registrations such as the Series 6 cover only specific product categories. Representative-level registration does not authorise the individual to supervise others, approve advertising, or perform the management functions that require principal registration.
A registered principal is an individual who manages or supervises the securities activities of a FINRA member firm — reviewing and approving advertisements and sales literature, supervising registered representatives, approving new accounts, reviewing correspondence, and overseeing the firm's regulatory compliance programme. FINRA Rule 3110 — the Supervision rule — requires member firms to designate registered principals as responsible supervisors for each area of the firm's business. No individual may perform principal supervisory functions without holding an appropriate principal registration.
The Series 24 is the top-level principal registration — the General Securities Principal — whose supervisory authority extends across the full range of a broker-dealer's general securities business. It is the most broadly applicable principal registration and the one most commonly held by branch managers, compliance officers, chief executive officers, and senior operations supervisors at broker-dealer firms.
To sit for the Series 24 examination, the candidate must satisfy three requirements under FINRA Rule 1210 and Rule 1220(a)(2).
First, the candidate must be associated with and sponsored by a FINRA member firm or another SRO. Unlike the Securities Industry Essentials examination — which is available to any individual eighteen years of age or older without firm sponsorship — the Series 24 requires active association with a registered broker-dealer that submits the registration request through the Central Registration Depository system on the candidate's behalf.
Second, the candidate must hold or simultaneously obtain an active representative-level registration in one of the qualifying categories. The Series 24 is a corequisite examination — its supervisory scope is defined by and limited to the product areas covered by the candidate's representative-level registration. The eligible corequisite representative examinations are the Series 7 — General Securities Representative, the most common corequisite — or the Series 17 United Kingdom Module of Series 7, the Series 37 or 38 Canada Module of Series 7, the Series 62 Corporate Securities Limited Representative, the Series 79 Investment Banking Representative, or the Series 82 Private Securities Offerings Representative. A Series 24 principal who holds a Series 7 corequisite has the broadest supervisory scope — authority to supervise the full range of general securities activities. A Series 24 principal who holds only a Series 79 has supervisory authority limited to investment banking activities.
Third, the candidate must pass the Securities Industry Essentials examination — the foundational prerequisite for all FINRA top-off qualification examinations.
The Series 24 examination consists of one hundred and fifty scored questions and ten unscored pretest questions — one hundred and sixty questions total — administered over three and a half hours. The passing score is seventy percent — one hundred and five correct answers out of one hundred and fifty scored questions. The examination is administered through Prometric testing centres across the United States.
FINRA's content outline divides the Series 24 examination into five major supervisory function areas that reflect the actual job responsibilities of a General Securities Principal.
Supervision of investment banking and securities business accounts for twenty-two percent of the examination — covering the regulatory framework governing underwriting, new issue distribution, private placements, research analyst independence, investment banking conflicts, and the rules applicable to the primary market activities of broker-dealers. This section tests the principal's understanding of the Securities Act of 1933 registration process, the cooling off period, Regulation M — the anti-manipulation rules applicable during distributions — the research analyst conflict of interest rules, and the supervisory obligations applicable to investment banking personnel.
Supervision of trading and market making activities accounts for twenty-one percent of the examination — covering the regulatory framework governing secondary market trading, short selling under Regulation SHO, market making obligations, the national market system rules of Regulation NMS, the prohibition on frontrunning under FINRA Rule 5270, best execution obligations, trading halts, and the manipulation prohibitions of Securities Exchange Act Section 9. This section tests the principal's understanding of how trades must be executed and supervised to comply with applicable trading rules.
Supervision of brokerage office operations accounts for nineteen percent of the examination — covering the operational requirements of running a broker-dealer's back office, including trade confirmation and settlement obligations, the net capital rule under SEC Rule 15c3-1, the customer protection rule under Rule 15c3-3, records requirements under Exchange Act Rules 17a-3 and 17a-4, margin account operations, and the financial responsibility framework applicable to registered broker-dealers.
Sales supervision, general supervision of employees, and the regulatory framework of financial industry accounts for twenty-nine percent of the examination — the largest single content area — covering the supervisory obligations of FINRA Rule 3110, the hiring, registration, and termination requirements for registered persons, the outside business activity and private securities transaction rules, customer account supervision including suitability and Regulation Best Interest, advertising and communications review, and the anti-money laundering programme requirements of FINRA Rule 3310.
Regulation of investment advisers, investment companies, and variable contracts accounts for nine percent of the examination — covering the regulatory framework of the Investment Advisers Act of 1940, the Investment Company Act of 1940, and the rules applicable to the sale of variable annuities and variable life insurance products.
The Series 24 examination tests a candidate's practical knowledge of the supervisory obligations that a General Securities Principal must discharge in the daily management of a broker-dealer's business — obligations codified primarily in FINRA Rule 3110.
Rule 3110 requires member firms to establish and maintain a system of supervision reasonably designed to achieve compliance with applicable securities laws and FINRA rules by all registered and associated persons. The supervisory system must include written supervisory procedures covering all aspects of the firm's business — specifying who is responsible for supervising each area, how supervision is conducted, what records are maintained as evidence of supervision, and how supervisory deficiencies are identified and corrected. Each supervisor must be registered as a principal in the appropriate category for the activities they supervise.
A General Securities Principal's daily supervisory responsibilities encompass reviewing customer account activity for suitability and Regulation Best Interest compliance, reviewing and approving all advertisements and sales literature before use under FINRA Rule 2210, reviewing incoming and outgoing customer correspondence for compliance with applicable standards, reviewing new account documentation for completeness and accuracy, reviewing registered representative outside business activities and private securities transactions for conflicts, and overseeing the firm's anti-money laundering programme for suspicious activity detection and reporting.
The General Securities Principal registration — and the Series 24 examination — does not qualify an individual for all principal supervisory functions. Several specialised principal registrations require separate examinations and cover activities outside the Series 24 scope.
The Series 4 Registered Options Principal qualification is required to supervise options trading activities — the Series 24 alone does not authorise supervision of registered options trading and options accounts. The Series 27 Financial and Operations Principal — FINOP — qualification is required for the designated principal responsible for the firm's financial condition and financial reporting including net capital computations. The Series 53 Municipal Securities Principal qualification is required to supervise municipal securities sales activities. The Series 51 Municipal Fund Securities Principal qualification governs supervision of municipal fund securities including 529 plan sales. The Series 9/10 General Securities Sales Supervisor examinations cover supervisory authority for sales activities at the branch manager level — distinguished from the broader firm-wide supervisory authority of the Series 24.
The Series 24 is tested on the SIE and Series 7 examinations in the context of the FINRA registration framework, the distinction between representative and principal registrations, and the supervisory obligations of registered principals.
The key points to retain are these.
The Series 24 — General Securities Principal Qualification Examination — qualifies an individual to supervise the general securities business of a FINRA member firm under FINRA Rule 1220(a)(2). Eligibility requires firm sponsorship, passage of the SIE, and an active corequisite representative-level registration — most commonly the Series 7. The examination consists of one hundred and fifty scored questions plus ten unscored pretest questions over three and a half hours with a seventy percent passing score. The five content areas are supervision of investment banking — twenty-two percent; supervision of trading and market making — twenty-one percent; supervision of brokerage office operations — nineteen percent; sales supervision, employee supervision, and regulatory framework — twenty-nine percent; and regulation of investment advisers, investment companies, and variable contracts — nine percent. The Series 24 does not authorise supervision of options activities — requiring Series 4; financial operations supervision — requiring Series 27; or municipal securities supervision — requiring Series 53. A firm's supervisory system under FINRA Rule 3110 must designate registered principals responsible for each area of the firm's business — no individual may perform principal supervisory functions without appropriate principal registration.
