FINRA Reminder to Ops Executives: It's Exam Time
U.S. operations executives requiring certification, take notice.
You can't wait until the eleventh hour to take and hope to pass a new Series 99 or other qualifying exam, warns the Financial Industry Regulatory Authority, the self-regulatory agency for US broker dealers.
The reason: if you do you might not be able to continue working in an operations-related job if you fail the exam and have to retake it. The deadline is October 17, 2012.
To meet the requirement for certification by that date, operations executives identified by their firms must take the exam thirty days beforehand. That would give them sufficient time to retake it if they don't pass. The passing score is 68.
Here is how FINRA explains its logic in a recent reminder bulletin: If a person fails the Series 99 exam on August 1, he or should could retake the exam on September 4. However, if a person were to take the exam on October 1 and fail, he or she could not retake the exam until October 31.Because that is past the October 17 deadline, the person would have to stop working in an operations-related job.
The exam is part of FINRA's new requirement for senior-ranking operations executives to be licensed; another is continuing education. The requirement, which was adopted with a lot of industry criticism, is supposed to prevent Ponzi scams such as the one orchestrated for decades by Bernard Madoff.
FINRA executives declined to specify the number of operations executives who have taken the exam and what percentage passed. Brokerage operations executives who passed the exam tell www.iss-mag.com that it was "pretty basic" and required minimal study effort. Industry talk is that over 70 percent of the estimated 1,000 executives passed on the first try.
The new certification applies to operations executives in more than a dozen "covered areas" such as client on-boarding; collection and disbursement of funds; securities lending and margin maintenance. Among the topics covered in the 100question multiple-choice exam are the characteristics of equities, debt, derivatives and packaged securiies. Operations executives are also errquired to understand the principles of cashiering and account transfers; control of custody and securities; corporate actions; margin and securities lending partices; account openings and trade reporting.
Written by Chris Kentouris, Editor-in-chief (Chris can be contacted through Chris.Kentouris@hotmail.com).