Determining if you are required to take the series 99 exam can depend on many factors. In some cases it is very straightforward, and in other cases the question may be more complex. If your firm tells you that you must pass the series 99 exam, regardless of whether or not FINRA would require you to take the series 99 exam to perform your job function, you must take the series 99 because your firm requires it. If your broker dealer does not have a specific requirement for you to take the series 99 exam, FINRA requirements will dictate if you need to become a licensed to perform your functions at your broker-dealer. FINRA 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.
FINRA has identified three key types of employees who meet the definition of a covered person for purposes of the series 99 exam. A covered person is any one of the following:
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:
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