Series 34

The Series 34 is an exam and license required for individuals seeking to engage in off-exchange forex transactions with retail customers. It is part of the registration and certification process for most forex managers, dealers, and intermediaries.

Breaking Down Series 34

The Series 34 Exam, also known as the Retail Off-Exchange Forex Examination, is a National Futures Association (NFA) exam administered by the Financial Industry Regulatory Authority (FINRA). Upon passing the exam, an individual is known as a 'forex AP,' or 'forex Associated Person.'

According to the NFA, obtaining Series 34 certification is required of anyone seeking approval as a forex firm or forex individual before engaging in off-exchange retail forex unless they have already passed the Series 3 (National Commodities Futures Examination) or the Series 32 (Limited Futures Examination-Regulations) exams. They also must have passed the Series 34 within the previous two years or have been continuously registered with an NFA member firm after passing the Series 34 without a registration lag of more than two years.

Series 34 Exam Content

The Series 34 Exam consists of 40 multiple-choice questions. Candidates have 60 minutes to complete it. To pass the exam, the applicant must get at least 28 questions correct to achieve a passing score of 70%.

The following represents a sample list of major subject areas covered by the Series 34 Exam, though it is not exhaustive (For more, see the NFA's Retail Off-Exchange Forex Examination Content Outline):

  • Section A: Definitions and Terminology - American/European Terms; Base, quote, terms and secondary currency; Bid/ask spread; Collateral, Regulated entities listed in the Commodity Exchange Act; security deposit, margin; Cross rates, crosses and pairs; Direct and indirect quotes; Exchange rate; Forward Points; Forward rate/bid forward rate; Interest rate differential and parity; Mark-up and mark-downs; PIPs; Rollovers; Spot rate/price; Trade/Settlement date; Swaps.
  • Section B: Forex Trading Calculations - Cross rate transactions; Effects of leverage calculations; Netting of positions; Open trade variation; Profit & loss calculations; Pip value, price after pips; Return on collateral. security deposit; margin; and Transaction costs.
  • Section C: Risks Associated with Forex Trading - Country/sovereign risk; Credit, exchange rate; interest rate, liquidity, market, operational risk; Settlement, and Herstaat risk.
  • Section D: Forex Market - Concepts, Theories, Economic Factors and Indicators, Participants: Balance of payments; Balance of trade; Bank for International Settlements (BIS); Capital account and current account; Central bank activities, intervention, sterilized intervention; Clearing House Interbank Payment System (CHIPS); Discount rate; Economic indicators: employment, consumer spending, income, industrial and inflation indicators; Elasticity of exchange rates; Exchange rate intervention; Exchange rate volatility; Federal Reserve Board, Fedwire; Fiscal policy; Fisher effect; Foreign investment indicators; Gross national product, gross domestic product; Inflation; Interbank funds transfer and settlement systems; International Fisher effect; International Monetary Fund; Portfolio balance; Role of central banks; Theory of elasticities; Theory of purchasing power parity and the World Trade Organization.
  • Section E: Forex Regulatory Requirements - CFTC Regulations, including: Close out of offsetting positions, Disclosure of profitable vs. non-profitable accounts, Prohibition of guarantees against loss, Registration requirements, Re-quoting, Security deposits, Specific authorization for trades; CFTC jurisdiction and jurisdictional limitations; Conflicts of interest; Disclosures to customers; Jurisdictional & regulatory framework; Know your customer; NFA Interpretive Notices, including: The Allocation of Bunched Retail Forex Orders for Multiple Accounts, Forex Transactions, Requirements for Forex Transactions, Supervision of the Use of Electronic Trading Systems, Prohibition on the Use of Certain Electronic Funding Mechanisms (Effective January 31, 2015); NFA membership and associate membership requirements; Promotional material & solicitation; Reports to customers, confirmations, monthly summaries; Security deposit rules; Security of customer funds, no segregation.
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  1. NFA. "Proficiency Requirements - Futures Industry." Accessed Nov. 19, 2020.

  2. FINRA. "Series 34 – Retail Off-Exchange Forex Exam." Accessed Nov. 19, 2020.

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