Series 23

The Series 23 is an exam offered by the Financial Industry Regulatory Authority (FINRA). The Series 23 is for financial professionals seeking to become general securities principals or sales supervisors. The Series 23 can only be taken once the Series 9/10 exams have been passed.

The Series 23 is also called the General Securities Sales Supervision Module. The exam consists of 100 multiple-choice questions on the investment banking process (primary and secondary markets), market-making and trading activities at the firm level, managing office staff, and current FINRA regulations. A score of 70% or better is required for passing. The Series 23 Exam focuses on testing individual knowledge in the areas of:

• Overseeing Investment Banking and Associated Activities - 25 Questions
• Management of Trading and Marketing Activities - 29 Questions
• Managing Firm Office - 16 Questions
• Supervising Sales Activities, Managing Employees and FINRA Regulations - 19 Questions
• Rules of Financial Responsibility - 11 Questions

A general securities principal has the authority to manage mutual funds, variable annuities and other pooled asset vehicles within FINRA and SEC-authorized firms. Sales supervisors can manage sales and brokerage staff, or work as general partners for a firm. Professionals taking this exam have typically been working in the industry for several years, and are looking to become mutual fund managers or office managers.

Most FINRA examinations are divided into two categories: Registered Representative and Registered Principal levels. The Series 23 is a Registered Principal level exam. FINRA defines principals as individuals who are actively engaged in the management of the member's investment banking or securities business, including supervision, solicitation, conduct of business or the training of persons associated with a member for any of these functions.

The Series 23 can be bypassed by taking the Series 24 exam, which is more comprehensive and includes information presented on the 9/10 exams.

The Financial Industry Regulatory Authority (FINRA) resulted from the merger of the New York Stock Exchange’s regulatory committee and the National Association of Securities Dealers. FINRA, as a regulatory body, is tasked with governing all business dealings conducted between dealers, brokers and all public investors. The consolidation of these two regulators aims into FINRA aimed to do away with overlapping regulation and inefficient costs.

FINRA is the single largest independent regulatory body for securities firms operating in the United States. While FINRA’s overriding task is to protect investors by ensuring that the U.S. securities industry operates in an honest and fair manner, FINRA must deal with thousands of smaller tasks on a regular basis in order to make this happen.