What is the Series 28

The Series 28 is an exam for professionals seeking become licensed recordkeepers or operations principals for broker-dealers or securities custodians. The exam is administered by the Financial Industry Regulatory Authority (FINRA) to test the knowledge of individuals on how to accurately record investment transactions, the financial responsibilities of broker-dealers and custodians, net capital requirements, and the rights of investors under the Securities Investor Protection Act of 1970. The Series 28 exam is more formally known as Introducing Broker-Dealer Financial and Operations Principal Qualification Examination (FI).

Breaking Down Series 28

According to FINRA, the Series 28 "assesses the competency of an entry-level financial and operations principal (FINOP) candidate to perform his or her job as a FINOP in an introducing broker-dealer that does not carry customer accounts or hold customer funds or securities."

The Series 28 is one of the newer FINRA exams, and it illustrates the fiduciary importance of accurate recordkeeping for investor accounts. With such a wide variety of securities available to retail investors there is a great deal to learn and understand about how each should be recorded and adapted for things like income and principal payments, redemptions, accrued interest, rights and warrants, and many other instances. As such, the Series 28 is intended to assess the competency of entry-level introducing broker-dealer financial and operations principals to safeguard the investor public.

Series 28 Permissions and Responsibilities

Passing the Series 28 Exam permits individuals to engage in the following basic activities:

  • Back office operations.
  • Preparation and maintenance of a member firm’s books and records.
  • Compliance with financial responsibility rules that apply to fully disclosed broker-dealers that do not hold customer funds and securities, and do not carry customer accounts.

For a full listing of permitted activities, see NASD Rule 1022.

Series 28 Exam Structure and Outline

The exam consists of 95 multiple choice questions divided into four major content areas by job function. Two hours are provided for its completion. A score of 69% or better is required for passing. The Series 28 has no prerequisite exam and costs $100. An individual must be associated with and sponsored by a member firm to be eligible to take the exam. For more, see FINRA's Series 28 - Introducing Broker-Dealer Financial and Operations Principal Exam (FI) informational page.

  • Function 1: Financial Reporting (16 questions)
  • Function 2: Operations, General Securities Industry Regulations, and Preservation of Books and Records (30 questions)
  • Function 3: Net Capital (31 questions)
  • Function 4: Customer Protection, Funding and Cash Management (18 questions)

For more, see FINRA's Series 28//Introducing Broker-Dealer Financial and Operations Principal Qualification Examination content outline, which elaborates on the four test sections and provides sample questions.