Many investment brokers who aspire to operate their own firm or become a supervisor at an NASD firm will take the Series 24 Exam. This test is 150 questions long and is in multiple choice format. A passing grade of 70% is needed to pass the exam.
The test breakdowns into 5 categories:
This includes corporate underwriting, securities acts of 1933 and 1934, along with NASD regulations and banking rules.
This section tests on trading market basics, NYSE trading, OTC, customers confirmations and settlements.
This exam area will test the Series 24 candidate on new account form particulars, which includes individual, joint, corporate and custodial accounts. Margin rules and account information is also covered in the customer account section.
This area of the test will test on various NASD rules of conduct and procedure.
Investment Companies and Retirement Planning
Mutual funds, IRA’s and other investment company products are tested.
To take the Series 24, you must already hold a Series 7 license or a Series 62 license. Once you are approved as a principal, you can supervise sales activity of the representatives who are working underneath you. This allows you to make a percentage of the reps commissions.
Responsibilities of Series 24 Principals
With the added license and income potential, comes responsibility and possible liability. Principals must approve and sign off on all faxes and other electronic correspondence that their brokers are sending customers. Series 24 managers must also sign and approve all new account forms. Series 24 persons are open to rules violations by their employees. Any wrongdoing by a Series 7 broker who is under the supervision of a Series 24 principal can result in severe penalties to the Principal, as well as the broker.
Start your own firm or branch office
If you wish to open an office of an existing firm and have employees, you will need the Series 24. Running your own office is a dream of many brokers who have put their time in and are ready to become an independent broker. The opportunities to earn the money and have more freedom are tempting. However, there are responsibilities that come with the territory. For most, the opportunity to run an office and earn from your Series 7 sales people makes it worth it.
Pass the Series 24 exam and earn your worth.