What Is the Series 51?

The Series 51 is an exam required for individuals who want to sell municipal fund securities or manage and supervise such individuals. It is administered by the Financial Industry Regulatory Authority (FINRA) and overseen by the Municipal Securities Rulemaking Board (MSRB). The Series 51 is a limited principal exam for managers of broker-dealers who have already earned either the Series 24 or Series 26 licenses. The exam covers the management of registered representatives who market municipal fund securities to clients, specifically Section 529 plans for college education and local government investment pools (LGIPs).

Understanding Series 51

The Series 51 was established for principals who do not otherwise deal in municipal securities, and do not have the Series 53 supervisory designation. Exam topics will test the taker's knowledge of underwriting, sales office supervision, market terminology and fair practice rules. Even though many 529 plans contain equity-based fund options, they are still regulated under the arm of the MSRB.

The full name of the Series 51 exam is the Municipal Fund Securities Limited Principal Qualification Examination. It is designed to determine whether someone meet's the MSRB's qualifications for municipal fund securities limited principals by testing applicants on their knowledge of and ability to apply MSRB rules, rule interpretations, and federal statutory provisions. Series 51 exam takers must have previously (or concurrently) qualified as a general securities principal or investment company/variable contracts limited principal.

Series 51 Activities

A limited principal in this context has the responsibility to manage, direct and supervise the following activities:

  • Underwriting of municipal fund securities
  • Trading of municipal fund securities
  • Selling municipal fund securities to customers
  • Communications with customers about any of the above activities
  • Maintaining records on the above activities
  • Processing, clearing and (in the case of securities firms) safekeeping of municipal fund securities
  • Training principals or representatives

Series 51 Test Details

The Series 51 exam consists of 60 multiple choice questions; a score of 70% or better is required for passing. Each question is worth one point. Test takers have 90 minutes to complete the exam, during which no reference materials are allowed. Exam preparation companies suggest that studying for the Series 51 will take at least 20 hours. The test, which costs $255, is organized thusly:

  • Regulatory structure: 5%
  • product knowledge: 27%
  • General supervision: 17%
  • Fair practice and conflicts of interest: 17%
  • Sales supervision: 18%
  • Underwriting and disclosure obligations: 6%
  • Operations: 10%

For more, see the MSBR's Series 51 content outline.