Series 23

What Is Series 23?

Series 23 is an exam offered by the Financial Industry Regulatory Authority (FINRA) to financial professionals seeking to become general securities principals or sales supervisors.

Series 23 can only be taken once the Series 9 and Series 10 exams have been passed. The Securities Industry Essentials (SIE), Series 7, and Series 9 exams are also prerequisites.

Understanding Series 23

Series 23 is also called the General Securities Sales Supervision Module.

The exam consists of 100 multiple-choice questions on the investment banking process, in both primary and secondary markets; market-making and trading activities at the firm level; managing office staff, and current FINRA regulations.

A score of 70% or better is required for passing.

The Series 23 exam tests knowledge in these areas:

• Overseeing Investment Banking and Associated Activities—25 Questions
• Management of Trading and Marketing Activities—29 Questions
• Managing Firm Office—16 Questions
• Supervising Sales Activities, Managing Employees, and FINRA Regulations—19 Questions
• Rules of Financial Responsibility—11 Questions

Series 23 can be bypassed by taking the Series 24 exam, which is more comprehensive and includes information presented on the Series 9 and Series 10 exams.

Candidates for the exam can enroll online for any of the FINRA exams. All are administered at FINRA test centers. Some of the tests can also be taken remotely.

Purpose of the Series 23 Exam

A general securities principal has the authority to manage mutual funds, variable annuities, and other pooled asset vehicles within FINRA and SEC-authorized firms.

A sales supervisor can manage sales and brokerage staff, or work as a general partner for a FINRA-authorized firm.

Professionals taking the Series 23 exam have typically been working in the industry for several years and want to move up to be mutual fund managers or office managers.

Most FINRA examinations fall into one of two categories: Registered Representative and Registered Principal levels. Series 23 is a Registered Principal level exam.

FINRA defines principals as professionals who are actively engaged in the management of the FINRA member's investment banking or securities business, including supervision, solicitation, the conduct of business, or training people for any of these functions.

The FINRA's Role

FINRA is a nonprofit agency created in 2007. It resulted from the merger of the New York Stock Exchange’s regulatory committee and the National Association of Securities Dealers into a single agency.

It is a regulatory body tasked with governing all business dealings conducted between dealers, brokers, and public investors. It writes and enforces the rules regarding ethical conduct by broker-dealers.

FINRA is the single largest independent regulatory body for securities firms operating in the United States. Its overriding task is to protect investors by ensuring that the U.S. securities industry operates in an honest and fair manner.