Series 72

The Series 72 is an exam administered by the Financial Industry Regulatory Authority (FINRA) to license individuals who want to become government securities limited representatives for registered broker/dealers.

In order to acquire a Series 72 license, potential licensees must take the Series 72 exam. The exam measures candidate’s capability to perform the functions of a government security representative, and it covers a range of topics to test candidates’ knowledge, including:

• Government securities
• Mortgage-backed securities
• Related securities and financial instruments
• Economic activity, government policy and behavior of interest rates
• Securities industry regulations and legal considerations
• Customer considerations

The test consists of 100 multiple-choice questions, and for a candidate to pass the exam he or she must get a score of 70% or better. Exams are closed book, and reference materials are not allowed during testing. Some questions require calculations. Candidates are not permitted to bring their own calculators. Test administrators will provide each candidate with a white board and dry erase markers and a calculator. Candidates have three hours in which to complete the exam.

Anyone can sign up to take the Series 72 exam, and there are no prerequisite exams. Interested candidates can sign up for the test online by filling out the appropriate forms for FINRA-registered or non-FINRA registered firms and scheduling an appointment to take the exam within 120 days. Fees for the exam are assessed either at the time of filing or upon enrollment request.

Candidates outside the US or its territories may still take the exam, though there may be additional requirements, such as a different data processing consent form and international delivery fee.

Once a candidate has passed the Series 72 exam, he or she becomes licensed. License holders are allowed to solicit and sell government securities, government agency securities and mortgage-backed securities, including government bonds and certain agency bonds such as GNMA securities and Federal Home Loan Mortgage (Freddie Mac) securities.

However, the Series 72 is limited in scope. For example, it does not permit the sale of any type of derivatives on government securities. As a result of these limitations, the licensing exam should only be taken by candidates if they will not need a more expansive or comprehensive registered representative licenses, such as the Series 62 licenses, which permits the candidates to become a corporate securities representative, or Series 7 license, which permits candidates to become a general securities representative.