Series 24 Organizational Structure Summary
- April 1, 2025
- Posted by: 'FINRA Exam Mastery'
- Category: Finance
🧾 Series 24 Organizational Structure Summary
📘 Understanding Firm Hierarchies, Roles, and Supervision Requirements
The Series 24 exam (General Securities Principal Exam) qualifies individuals to supervise or manage branch activities, personnel, and regulatory compliance in a broker-dealer setting. A key topic is understanding the organizational structure within a financial firm and the roles that fall under a principal’s supervision.
🧩 1. Supervisory Structure Overview
| Level | Role | Supervisory Authority |
|---|---|---|
| Executive Leadership | CEO, COO, Managing Partners | Strategic direction; may or may not hold licenses |
| Principal Level | General Securities Principals (Series 24) | Responsible for compliance, operations, sales, and trading supervision |
| Registered Representatives | Series 7 license holders | Execute trades and recommend investments |
| Non-Registered Personnel | Admin, support, clerical staff | Cannot solicit or recommend securities |
📂 2. Principal Responsibilities
Series 24 Principals oversee:
- Broker-dealer operations
- Sales practices and client communications
- Advertising and marketing materials
- Trade review and approvals
- Training of registered reps
- Customer account supervision
- AML and regulatory filings
They ensure the firm complies with FINRA, SEC, and state rules.
🛠️ 3. Key Departments and Reporting Lines
| Department | Supervised By | Focus |
|---|---|---|
| Compliance | Chief Compliance Officer (often Series 24) | Regulatory adherence, filings, WSPs |
| Operations | Operations Principal | Clearing, settlement, recordkeeping |
| Sales | Sales Manager (Series 24) | Sales suitability, rep supervision |
| Trading | Trading Supervisor (Series 24 or 57) | Execution quality, trading desk review |
| Research | Research Principal (Series 24) | Conflicts of interest, fair disclosure |
| Financial Reporting | FINOP (Series 27 or 28) | Net capital, books and records |
🔐 4. Written Supervisory Procedures (WSPs)
- Must clearly define who supervises whom
- Identify review processes for trades, communications, and escalations
- Must be updated regularly to reflect structural changes
🧠 5. Delegation of Authority
- A Series 24 Principal may delegate tasks but retains responsibility
- Delegates must be qualified and registered to supervise the delegated area
- Documentation of supervision and review is critical
🚨 6. Branch Offices and OSJs
| Office Type | Definition | Supervision Requirement |
|---|---|---|
| Branch Office | Location where securities business is regularly conducted | Supervised by a designated principal |
| OSJ (Office of Supervisory Jurisdiction) | Handles activities like order execution, customer complaints | Must be supervised by an on-site principal |
📊 7. Organizational Chart Tip
For exam purposes, know the flow of responsibility:
Executive Oversight → Series 24 Principals → Registered Reps → Clients
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Understand the structure. Enforce the rules. Pass with confidence.