Series 28

What Is Series 28?

The Introducing Broker-Dealer Financial and Operations Principal Qualification Exam—better known as the Series 28 exam—is a financial examination for professionals seeking to become licensed recordkeepers or operations principals for broker-dealers or securities custodians that do not have customer accounts or hold customer funds or assets.

Understanding Series 28

Series 28 is administered by the Financial Industry Regulatory Authority (FINRA). Its overarching goal is to ensure that successful candidates have the knowledge and competence to accurately record investment transactions and abide by the regulatory responsibilities outlined in the Securities Investor Protection Act of 1970 and other applicable laws and regulations.

Series 28 is one of several financial exams administered by FINRA. Its focus is on new professionals who wish to operate as financial and operations principals. These types of professionals, often referred to as “FinOps” within the industry, help ensure regulatory compliance by overseeing the books and records of financial firms.

For these professionals, it is important not only to be knowledgeable about the regulatory landscape but also to have a deep understanding of the types of products being bought and sold in order to ensure that their transactions are recorded accurately and consistently.

Application of Series 28

Series 28 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, Series 28 is intended to assess the competency of entry-level introducing broker-dealer financial and operations principals to safeguard the investing public.

Passing the Series 28 exam can be a valuable asset for those pursuing a career in the financial sector, and in particular, those interested in compliance-related roles.

After passing the Series 28 exam, successful candidates will be eligible to fulfill various back-office roles and be directly involved in the maintenance and preparation of the books and records of broker-dealer member firms. To write the exam, candidates must first be sponsored by a firm that is a member either of FINRA or of another qualifying self-regulatory organization (SRO).

The Series 28 Exam

The Series 28 exam consists of 95 multiple choice questions divided into four major content areas by job function. The four areas include (1) financial reporting; (2) operations, general securities industry regulations, and preservation of books and records; (3) net capital; and (4) customer protection, and funding and cash management.

Candidates have two hours to complete the exam, with a score of 69% or greater required in order to pass. Unlike other financial exams, Series 28 has no prerequisites, although candidates must be sponsored by a qualifying member firm in order to take the exam.

The majority of the exam’s questions concern the operations and general regulatory environment of the securities industry, as well as the net capital requirements and other responsibilities of financial firms. Other major subject areas include protocols for protecting customer assets and ensuring the accuracy of financial reports.