Series 10 exam tips

In this article we are going to detail a number of the best practices students should employ when preparing to take the series 10 exam. We will include the answers to many questions students ask when preparing to take the General Securities Sales Supervisor Examination and we will show you some examples of student feedback relating to questions that appeared on the exam. 

Why are there so many MSRB questions on this test?

The municipal Securities Rulemaking Board only has two functions. The msrb writes rules and  writes test questions, and that is it. MSRB regulations are actually enforced by other regulators. For broker-dealers, MSRB rules are enforced by FINRA. For banks who transact business in municipal securities, the MSRB rules are enforced by the banking regulators. As a result, the MSRB receives substantial weight on the series 10 exam.

What do I need to know about the difference between finra rules and regulations and msrb rules and regulations?

The vast majority of series 10 test-takers work for a finra member broker-dealer. Even though the msrb rules and regulations will be enforced by finra, the rules and regulations can vary substantially.  For example, finra requires written customer complaints to be maintained by the broker-dealer for 4 years. Msrb rules enforced by finra, require the broker-dealer maintain written customer complaints for six years.   Another Interesting point you want to be on the lookout for on your exam is how finra and the msrb classify certain pieces of  public communication. Most test takers are very comfortable with finra rules regarding retail communication with the public.  Under finra rules, any written communication sent to  more than 25 individuals in a 30-day period, is classified as retail communication.  The msrb has an interesting rule relating to communication with the public. The msrb considers any written communication sent to more than 25 people in a 90-day period to be a form letter.  These differences can lead test takers to select the wrong answer on the exam. The key to the question will tell you whether you are answering a question covering the rules and regulations of finra or those of the msrb. 

How do I remember all of the information I need to know about confirmations for municipal securities?

A number of questions will appear on your exam concerning the information that must be disclosed to a customer when they purchase a municipal security. Many registered representatives will go through their entire career  without doing a substantial amount of business in municipal securities.  There are a number of terms and conditions  relating to a particular municipal issue that can impact the information that is required to be disclosed to the customer on the confirmation. At the Securities Institute we understand that keeping all of this straight can be a daunting task. We have written a substantial number of test questions covering each detail regarding customer confirmations. Here are several of the key points taken directly from our Series 10 test bank

  1. The interest rate shown on the confirmation for a zero-coupon municipal security is zero
  2. A municipal security that carries a put feature should disclose the yield to put on the confirmation 
  3. When a customer purchases a municipal fund security the confirmation must disclose the total value of the purchase excluding commissions 
  4. When a customer purchases a municipal security with a declining call provision, the confirmation must show the yield to call at the lowest call price

These are just a few of the subtle test points covered in our test questions, text book and video training class. It is important to master the disclosure requirements under msrb rules to ensure you pass your exam.

Series 10 Student feedback from the actual exam

Having helped more than 100,000 students prepare for exams, we have received invaluable feedback from our candidates. We carefully craft test questions  based on this feedback to ensure you know what to expect on your exam. Here are several examples of what we have heard from students who have taken the series 10 exam.

A question we have heard coming back from numerous candidates surrounds the requirements relating to money laundering and international wires. One of the questions is as follows:

A client of your broker-dealer is a foreign national  who engages in international business transactions. The products that his company makes are traditionally sold for several hundred dollars each.  The firm notices that the client has recently received a wire transfer into his account in the amount of $4,200.  The wire was received from a little-known bank based in a country known to sponsor terrorism. Which of the following actions should the firm take?

A. The firm should submit a suspicious activity report

B. The firm should submit a currency transaction report

C. The firm should maintain a record of the wire transfer

D. The firm should inform FinCen of the wire transfer

C. Financial services firms are required to maintain a record of any International  wire greater than $3,000. The customer is known to export products overseas and the dollar value does not exceed the $5,000 threshold requiring the filing of a suspicious activity report.

Here is another question we have received information on relating to the financial exploitation of seniors.

Sue is a retired schoolteacher who has maintained an account with your firm for more than 20 years.  The account has been primarily invested to generate income to help Sue meet her monthly expenses.  Sue enjoys the check writing privileges afforded to her through your firm’s money market account and generally spends about $3,000 per month.  One day Sue calls in and requests that a check be sent to a third party in the amount of $50,000. Which of the following would not be an appropriate action based on this request? 

A. Withhold sending the check for 15 days

B. Call the trusted contact and inquire about the validity of the request

C. Investigate the recipient of the payment

D. Forward the check as requested by the client

D. The request is significantly outside the normal course of business for the retired account owner. The large sum being sent to a third party is a substantial red flag for elder abuse.  The registered rep and the firm should do all they can to ensure that the request is indeed valid. All of the choices listed would be appropriate actions for the firm to take with the exception of Simply forwarding the check as requested by the client.

What is the best way to prepare for the series 10 exam?

When preparing for the series 10 exam it is important to employ the best practices to ensure your success. There are no shortcuts and there is no easy way out. You must prepare fully and completely and commit to spending at least 70 to 100 hours preparing for the exam. There will be a lot of information on this test that you are not familiar with and that you will not use as a general Securities sales supervisor. We recommend the following best practices:

  1. Work within a realistic time frame and do not try to cram all of the information in  over the course of one to two weeks. The average person studies between four and six weeks for the series 10 exam.
  2. Make the most of your study time.  This means  setting aside time when you are alert, focused and can retain the information you review during your study sessions. We recommend students spend 90 minutes -2 hours prior to taking a break
  3. Read the series 10 textbook fully and completely,  highlight key areas and take comprehensive notes.
  4. Watch the video lectures with your textbook open as the video lectures will provide additional detail to the information in your textbook and will detail how the information will appear on your exam.
  5. Spend at least 25 hours testing your ability to apply the knowledge you have acquired from the textbook and video class lectures.  You must do a variety of exams. Take topic focused practice exams to ensure your mastery of individual areas and take numerous simulated final exams  to ensure you are ready to sit through almost  4 hours of answering questions.

We hope that this article has helped you to better understand how to prepare to pass the series 10 exam.

 click this link for additional series 10 materials

 Good luck on your exam! 

 The Securities Institute of America

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