Series 24 Compliance Responsibilities Overview

🧾 Series 24 Compliance Responsibilities Overview
📘 What Every General Securities Principal Must Know About Compliance

The Series 24 exam, also known as the General Securities Principal Qualification Exam, qualifies individuals to supervise or manage branch activities and ensure compliance within a FINRA-registered firm. Understanding compliance responsibilities is critical—both for passing the exam and for excelling in your supervisory role.

Here’s a structured overview of the core compliance duties tested on the Series 24 exam.

🎯 1. Supervisory Structure & Responsibilities

✅ Key Duties of a General Securities Principal:

• Oversee registered representatives and their activities
• Ensure firm policies follow FINRA, SEC, and MSRB rules
• Approve communications with the public
• Conduct annual compliance reviews
• Ensure proper supervision of customer accounts and trading activity
• Implement and monitor the firm’s Written Supervisory Procedures (WSPs)

📌 Note: Principals do not supervise investment adviser activity—only broker-dealer operations.

📂 2. Written Supervisory Procedures (WSPs)

Every broker-dealer must maintain detailed WSPs covering:

• Daily supervision of associated persons
• Review and approval procedures for communications, trades, new accounts
• Compliance with AML, Reg BI, and other core regulations
• Escalation procedures and documentation expectations

🛠️ Series 24 Tip: Know how to apply WSPs to different types of violations or oversight scenarios.

📈 3. Compliance with Regulatory Reporting

Series 24 candidates must understand the required regulatory filings, such as:

• U4/U5 Forms – registration and termination
• Form BD – broker-dealer registration
• Form BR – branch registration
• SARs (Suspicious Activity Reports) – for anti-money laundering compliance
• OATS/TRACE reporting – order and trade reporting

📌 Test Tip: Be familiar with filing deadlines and who within the firm is responsible.

🧾 4. Communication with the Public

Principals must review and approve:

• Retail communications (e.g., advertisements, social media)
• Correspondence and institutional communications
• Disclosures for risk, performance, and hypothetical projections
• Compliance with FINRA Rule 2210

🚫 Prohibited Actions:

• Misleading or unbalanced statements
• Promising returns
• Failing to include required risk disclosures

📋 5. Customer Account Supervision

You’ll be expected to know the rules surrounding:

• New account approval and required documentation
• Supervision of options and margin accounts
• Suitability determinations under Regulation Best Interest (Reg BI)
• Heightened scrutiny of senior or vulnerable investors

✅ Know This: Principals must approve new accounts, periodically review account activity, and ensure records are maintained per SEC Rule 17a-4.

🔒 6. Anti-Money Laundering (AML) Responsibilities

Series 24 candidates should know:

• Components of a firm’s AML program
• Role of the AML compliance officer
• SAR filing thresholds and procedures
• CIP (Customer Identification Program) requirements

🛡️ Regulations to Know:

• Bank Secrecy Act (BSA)
• Patriot Act AML provisions
• FinCEN’s SAR & CTR reporting

🧑‍⚖️ 7. Handling Violations & Internal Investigations

Principals must:

• Investigate red flags (e.g., excessive trading, customer complaints)
• Escalate issues to compliance/legal when appropriate
• Document all steps taken in the review and resolution process
• Take disciplinary action when necessary

📌 Must-Know: Reportable events must be updated via Form U4/U5 within 30 days.

📚 8. Continuing Education & Firm Element

Principals are responsible for ensuring:

• Firm Element training is tailored to firm risk and registered persons’ roles
• Individuals meet Regulatory Element requirements (via FINRA CE online)
• The firm documents training and completion for audits

🚀 Conclusion: Compliance is Core to the Series 24 Role

The Series 24 exam heavily emphasizes your role in ensuring that the broker-dealer operates ethically, legally, and efficiently. Mastering compliance responsibilities—ranging from supervising communications to enforcing WSPs and monitoring accounts—will not only help you pass the exam but succeed in the role.

🎓 Need Series 24 study tools?
Access mock exams, compliance scenarios, and PDF study charts at
👉 https://finra-exam-mastery.com

Lead with clarity. Supervise with confidence. Pass your Series 24.