Series 24 and FINRA Rule Knowledge You Need

🧾 Series 24 and FINRA Rule Knowledge You Need
📘 Mastering the Core Rules for the General Securities Principal Exam

The Series 24 exam qualifies you to become a General Securities Principal, responsible for supervising a wide range of investment banking and securities business activities. A significant portion of the exam focuses on FINRA rules, particularly around supervision, compliance, and firm operations. Below is a structured review of the essential FINRA rules and Series 24 knowledge areas you’ll need to master.

🎯 1. Role of the General Securities Principal

As a Series 24 holder, you are authorized to:

• Supervise registered representatives (RRs)
• Approve advertising and sales materials
• Oversee trading desks and underwriting activities
• Monitor firm compliance with FINRA and SEC rules

However, Series 24 does NOT qualify you to supervise:

• Options (requires Series 4)
• Municipal securities (requires Series 53)
• Investment banking-specific activities (requires Series 79)

📘 2. FINRA Rule Categories You Must Know

📌 Registration and Supervision Rules

• Rule 1010 – Application for Membership (Form BD)
• Rule 1020–1030 – Registration of Principals and Representatives
• Rule 3110 – Supervision
  🔹 Requires firms to establish and maintain a system to supervise activities of each associated person.

📌 Communications with the Public

• Rule 2210 – Advertising and Communications
  🔹 Covers retail, correspondence, and institutional communication.
  🔹 Principal approval required for most retail communications.
  🔹 Pre-use filing required for certain categories (e.g., mutual funds, options, rankings).

📌 Suitability and Sales Practice Rules

• Rule 2111 – Suitability
  🔹 Requires reasonable basis, customer-specific, and quantitative suitability assessments.
• Rule 2090 – Know Your Customer (KYC)
  🔹 Firms must use reasonable diligence to know essential facts about customers.

📌 Business Continuity and Reporting

• Rule 4370 – Business Continuity Plan (BCP)
  🔹 Firms must have a written plan in case of emergency or disruption.
• Rule 4530 – Reporting Requirements
  🔹 Requires firms to report specified events (e.g., violations, customer complaints) within 30 days.

📊 3. Supervisory Procedures and Compliance

• Written Supervisory Procedures (WSPs) must be current, documented, and reviewed annually.
• All registered reps must be supervised by an appropriately registered principal.
• Branch inspections must be done annually (OSJs) or at least every 3 years (non-OSJ branches).
• Annual compliance meeting is required for all registered personnel.

💼 4. Financial Responsibility and Net Capital Rules

• SEC Rule 15c3-1 (Net Capital Rule):
  🔹 Broker-dealers must maintain minimum net capital based on activity type.
  🔹 Introducing BDs: $5,000 to $50,000
  🔹 Market-making BDs: $100,000+
• Customer Protection Rule – SEC Rule 15c3-3:
  🔹 Protects customer funds/securities by requiring segregation.

🧾 5. Other Must-Know Series 24 Topics

🚀 Tips for the Exam

• Expect scenario-based questions that test your judgment as a supervisor.
• Memorize thresholds: net capital, filing deadlines, reporting windows.
• Pay close attention to advertising approval and filing rules under FINRA Rule 2210.
• Review customer complaint procedures, supervisory hierarchy, and inspection requirements.

🎓 Ready to prep smarter for your Series 24?
Access full-length simulations, flashcards, and rule breakdowns at
👉 https://finra-exam-mastery.com

Master the rules. Lead with compliance. Pass your Series 24 exam with confidence.