Do I need to pass the series 99 exam?

Whether you are required to take the Series 99 exam depends on several factors. In some cases, the answer is straightforward. In others, determining who must take the Series 99 can be more complex and depends on both firm policies and FINRA requirements.

First, your broker-dealer’s internal policies matter. If your firm requires you to pass the Series 99 exam as a condition of your role, you must take and pass the exam—even if FINRA would not otherwise require the license for your specific job function. Firm-level requirements always take precedence for employees.

If your broker-dealer does not have a specific Series 99 requirement, then FINRA rules will determine whether you need the license. FINRA has stated that any individual who meets the definition of a “covered person” or who performs a “covered function” must pass the Series 99 exam. These roles typically involve significant responsibility over a broker-dealer’s books, records, or regulatory reporting. INRA has concluded that any individual who meets the definition of a covered person or who performs a covered function must pass the series 99 exam . Covered persons include:

• A member of senior management who supervises or controls covered functions
• Department managers empowered by senior management to oversee covered functions as well as employees who perform covered functions
• Employees with authority to commit firm capital or agree to the terms of a contract (usually the terms of a trade) as part of a covered function.

A covered person who performs a covered function will be required to register as an operations professional. The covered functions are as follows:

• Margin clerk
• Stock loan and stock lending
• Customer account clerk / client on boarding
• Producing or maintaining trade confirmations and account statements
• Handling receipt and delivery of cash and securities
• Handling bank reconciliations including custody
• Performing settlement functions
• Performing prime brokerage services
• Assisting in the preparation of financial reports
• Assisting in the creation or maintenance of general ledgers
• Assisting in financial control functions
• Performing sweep functions for free cash balances
• Performing buy ins and sell outs or segregation duties
• Approving or designing of pricing or valuation models
• Approving trading or validation system for covered functions

In order to be subject to the registration and continuing education requirements of the series 99 exam the person must meet the definition of a covered person and perform a covered function. If a person performs a covered function but does not meet the definition of a covered person they are not required to become series 99 registered. In addition to passing the series 99 candidates must also pass the Securities industry Essentials exam more commonly referred to as the SIE.  While candidates are not required to be sponsored to take the SIE Exam, the series 99 exam requires individuals to be sponsored by a FINRA member broker-dealer.

We hope that this article has helped you determine if you are indeed required to pass the series 99 exam.  Watch a free video detailing a number of the concepts you will be required to have mastered to pass the series 99 exam by visiting our series 99 exam prep page

 Good luck on your exam!

 The Securities Institute