Series 27

The Series 27 is a securities license entitling the holder to prepare and manage the books and recordkeeping of a member firm. Also known as the Financial and Operations Principal Qualification Examination (FN) exam, passing the Series 27 essentially allows individuals to act as a member firm CFO.

The Series 27 Exam is administered by the Financial Industry Regulatory Authority (FINRA) and assesses the competency of entry-level Financial and Operations Principal (FINOP) candidates to perform their job. More specifically, it covers such topics as statutory rules surrounding broker-dealer responsibilities, including recordkeeping requirements, as well as items covered under the Securities Investor Protection Act of 1970.

The Series 27 Exam includes 145 scored multiple-choice questions, as well as 10 unscored pretest questions randomly distributed throughout the test. Test-takers should answer every question; there is no penalty for guessing. Candidates have three hours and 45 minutes to complete the test. A passing score is 69%. There are no prerequisite tests for taking the Series 27 Exam. Candidates must be associated with a FINRA member firm to take the exam. The cost for the Series 27 Exam is $120.

The Series 27 and Series 28 (also known as the Introducing Broker/Dealer Financial and Operations Principal Examination) are both required by FINRA for individuals who prepare and maintain the books of and records of member firms as required under securities industry rules and regulations.

The Series 27 covers brokers-dealers that have a minimum net capital requirement of $250,000 and municipal securities brokers that have a minimum net capital requirement of $150,000 (under SEC Rule 15c3-1).

The Series 28 is an abbreviated version of the series 27. Broker-dealers that don't meet the Series 27 thresholds listed above may use the Series 28.

The Series 27 Exam has five content areas. They include:

• Function 1: Financial Reporting (25 questions)
• Function 2: Operations, General Securities Industry Regulations, and Preservation of Books and Records (42 questions)
• Function 3: Customer Protection (24 questions)
• Function 4: Net Capital (41 questions)
• Function 5: Funding and Cash Management (13 questions)

For more information on the test, see FINRA's Financial and Operations Principal Qualification Examination (Series 27) Content Outline. Also available is a Series 27 Study Outline, which features sample questions.

The Series 27 Exam is conducted by computer. A tutorial on how to take the exam by computer is available. Candidates aren't allowed any reference material, but are given scratch paper and basic electronic calculators (some of the exam's questions involve calculations).