General Securities Principal Exam
The Series 24 exam qualifies candidates to supervise and manage a broker-dealer's securities business. General Securities Principals are responsible for overseeing the firm's investment banking and securities operations, ensuring regulatory compliance, approving communications with the public, and supervising registered representatives. This exam is required for branch managers, compliance officers, and other supervisory personnel at FINRA member firms.
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Practice Questions
Test your knowledge with these Series 24-style questions. Click an answer to check if you are correct.
1. Under FINRA Rule 2210, which type of communication must be approved by a principal before first use?
Correct: B. Retail communications (distributed to more than 25 retail investors within a 30-day period) must be approved by a registered principal before first use. Correspondence and institutional communications require supervisory review but not pre-approval.
2. A broker-dealer's AML compliance program must include all of the following EXCEPT:
Correct: C. While an AML program must include policies and procedures, an AML compliance officer, employee training, and independent testing, it does not require prior SEC approval. The program is established by the firm and is subject to examination by regulators.
3. Under Regulation SHO, what must a broker-dealer do before executing a short sale?
Correct: A. Regulation SHO's locate requirement (Rule 203(b)(1)) requires broker-dealers to locate a source of borrowable securities before accepting or effecting a short sale order. This is designed to prevent naked short selling and excessive failures to deliver.
4. FINRA Rule 5130 prohibits the sale of IPO shares to which of the following?
Correct: C. FINRA Rule 5130 restricts the purchase of new issues (IPOs) by "restricted persons," which includes FINRA member firms, their associated persons, and immediate family members of associated persons. This rule prevents industry insiders from profiting from hot IPO allocations.
5. How often must a broker-dealer review its written supervisory procedures (WSPs)?
Correct: C. Under FINRA Rule 3110, a broker-dealer must review its written supervisory procedures at least annually to ensure they remain current and adequate for the firm's business activities. The review should consider changes in regulations, business lines, and any compliance issues identified during the year.
Related Exams
The Series 24 is often paired with other principal or representative exams depending on your supervisory responsibilities.
General Securities Representative
A common prerequisite for the Series 24. The Series 7 qualifies you to sell a broad range of securities products and is typically required before pursuing a principal license.
Financial and Operations Principal
Complements the Series 24 by covering the financial and operational side of broker-dealer management, including net capital computation and customer protection.