Registration categories

Registration definitions

Registered representatives

Persons wishing to work with a member firm in investment banking or securities, in roles such as supervision, solicitation, conduct of business, or training other persons, will need to be registered as a representative in each category of registration appropriate to their functions and responsibilities. Examples would be investment companies, equity, debt, DPPs, and similar individual lines of securities.

Registered principals

Principals supervise other associated persons. Depending on what they are supervising, principals will need to be registered as principals in each category of registration appropriate to their functions and responsibilities. The list of examples would be the same as above.

Every member with more than one associated person must designate at least two officers or partners registered to supervise the firm’s business. A firm with only one associated person is exempt from this two-principal requirement.

Registration categories

Principal registrations

Principal registrations apply to any person associated with a member in a role such as sole proprietor, officer, partner, manager of an OSJ, director, or similar role engaged in the management of the member’s investment banking or securities business - including supervision, solicitation, conduct of securities business, or training of associated persons. These roles include the CEO and CFO.

General securities sales supervisor S9/10

Required for supervising sales in corporate/municipal securities, options, investment companies, variable contracts, and direct participation programs.

A principal can register with the Series 9/10, instead of the Series 24, when the principal’s supervisory responsibilities are limited to the securities sales activities of the member, including approval of accounts, training of sales and sales-supervisory personnel, and maintaining records of original entry or ledgers. These original-entry records must be maintained at branch offices under Exchange Act recordkeeping rules.

A general securities sales supervisor may not perform the following:

• Supervision of origination and structuring of underwritings,
• Supervision of market making,
• Supervision of custody of BD or customer funds, or
• Supervision of overall compliance with financial responsibilities (Fin/Op principal duties).

Example: Series 9/10 vs. Series 24 authority

A sales manager wants to approve a new customer’s options account and review the required options risk disclosures. That falls within the Series 9/10’s sales-supervision authority.

The same manager is then asked to supervise the firm’s underwriting of a new corporate bond issue. Supervision of origination and structuring of underwritings is excluded from the Series 9/10 - that authority belongs to an investment banking principal, who must pass the Series 24 (covered next) and also be registered as an investment banking representative (Series 79).

Answer: Approving the options account is within S9/10 authority; supervising the underwriting requires an investment banking principal (S24 plus S79).

General securities principal S24

The Series 24 covers multiple lines of business under one license - including government, investment company and variable contracts, DPPs, and private offerings - so a principal supervising those lines doesn’t need multiple registrations. A separate principal registration is required in addition to the S24 only if duties include functioning as a compliance officer, a Fin/Op principal or BD Fin/Op principal, principal financial officer, principal operations officer, investment banking principal, research principal, securities trader principal, or registered options principal. The S24 also doesn’t cover municipal securities, whose principal qualifications come from MSRB Rule G-3: supervising municipal business takes the municipal securities principal exam (Series 53), or the Series 9/10 when the supervision is limited to sales to and purchases from customers.

The general securities principal is ultimately responsible for approving general securities accounts and the transactions in them. Supervising traders takes more than the S24 alone: that principal must register as a securities trader principal, which requires passing the S24 and also being registered as a securities trader (S57).

Financial and operations principal and introducing broker-dealer financial and operations principal S27/28

Each firm must designate a Financial and Operations Principal (S27). A firm that operates only as an introducing broker-dealer can designate an Introducing Broker-Dealer Financial and Operations Principal (S28) instead. Duties:

• Final approval and responsibility of financial reports submitted,
• Final preparation of said reports,
• Supervisions of individuals preparing said report,
• Supervision and responsibility for everyone involved in the maintenance of members books and records,
• Supervision and performance of members responsibilities under all financial responsibility rules and regulations,
• Overall supervision and responsibility of everyone involved in the administration and maintenance of back office operations, and
• Any other matter involving financial or operational management of the member.

In short, the FinOp principal is ultimately responsible for the firm’s recordkeeping and financial reporting.

Registered options principal S4

Each member engaging in options transactions must have at least one registered options principal. They supervise member’s options sales practices with the public. They are responsible for approving opening of options accounts, transactions, and communications regarding options.

Government securities principal

Required of a principal who manages or supervises the firm’s government securities business, which includes underwriting, trading, or selling government securities; financial advisory or consultant services for issuers in connection with government securities; research or investment advice, other than general economic information or advice, with respect to government securities; activities involving communication (direct or indirect) with public investors in government securities; or supervision of processing and clearance activities with respect to government securities, or maintenance of records involving these activities.

The series exam number is not needed.

Municipal securities sales principal

These municipal principal and representative qualifications are set by the Municipal Securities Rulemaking Board (MSRB) in its Rule G-3, not by FINRA’s rules, though FINRA enforces MSRB rules for its member firms.

This is a natural person, other than a full municipal securities principal, that is associated with the broker, the dealer, or the municipal securities dealer in question. Their supervisory activities are limited to only supervising sales and purchases to and from customers, of municipal securities. None of the other supervisory activities of standard “full” principals.

To be a municipal securities sales principal, the person must pass the General Securities Sales Supervisor Qualification Exam, also known as the Series 9 and Series 10. Prior to being able to be qualified to be a municipal securities sales principal, the person must be duly qualified as either a municipal securities representative or a general securities representative. They could either be qualified for some other reason, or they simply could pass the exams, which would be the Series 52 or the Series 7.

The series exam number is not needed.

Municipal securities principal and municipal fund securities limited principal

Natural person associated with a broker, dealer, or municipal securities dealer, directly engaged in the management, direction, or supervision of municipal activities including:

• Underwriting, trading, and sales of municipal securities
• Advisory or consultant services in connection with the issuance of municipal securities
• Research or advice on municipal securities
• Activities with municipal securities involving communicating with public investors
• Maintenance of records with respect to the above activities
• Training of principals or representatives of the member

Municipal fund securities limited principal would do all of these type things, but only for municipal fund securities. Municipal fund securities are municipal securities issued by an issuer that would be an investment company under the Investment Company Act of 1940 if it weren’t exempt as a state or local government entity.

The series exam number is not needed.

Investment company and variable contracts products principal S26

Supervises opening of accounts, transactions in them, and communications limited to Investment Company and Variable Products.

Direct participation programs principal S39

Supervises accounts, transactions, and communications limited to direct participation programs.

Supervisory analyst S16

These are principals of the research analysts, and are responsible for approving research reports, not preparing them. Activities limited solely to approving content of research reports on equity securities, content of research reports on debt securities, content of third-party research reports, retail communications, or other research communications not meeting the definition of “research report”.

Representative registrations

General securities representative S7

A registered rep capable of selling most securities. If their job includes operations professional, securities trader, an IB representative, or research analyst, they will need those licenses in addition to the Series 7. This license is required for most sales of securities to retail investors; corporate stocks/bonds, municipal/government securities, options, DPPs, ETFs, and all investment companies.

Operations professional S99

An operational, back-office registration - not a sales license. It is required for senior management with direct responsibility over covered operational functions, the supervisors and managers they designate to approve or authorize work in those functions, and anyone with authority to materially commit the firm’s capital or contracts in direct furtherance of them. Covered functions include client onboarding, the movement of customer funds and securities, settlement and reconciliation, maintaining books and records, and related financial-control functions.

Municipal securities representative and municipal securities sales limited representative S52

Like the municipal principal registrations above, the S52 is an MSRB qualification rather than a FINRA one.

The full municipal securities representative, is a natural person that is associated with a broker, dealer, municipal securities dealer, in a position that is not solely clerical, ministerial, janitorial, or similar. Underwriting, advisory services, research, investment advice, and other activities involving communicating with public investors, would all define the person as a municipal securities representative.

A municipal securities sales limited representative, are limited exclusively to sales and purchases, to and from, customers of municipal securities. No underwriting, advisory, research, etc.

If the person is duly qualified as a general securities rep having taken the S7 prior to November 7, 2011 or if the person is trying to be a municipal limited rep and has the S7 at any time, or a person only selling municipal fund securities is duly qualified as a S6 rep, they would not need to take the S52.

Investment company and variable contracts products representative S6

The limited representative for investment company and variable contract products is the Series 6 representative. They are limited to selling and recommending transactions involving investment company products and variable contracts. Mutual funds (at all times), closed-end funds (only during their initial public offering), and unit investment trusts are the most common investment company products, along with municipal fund securities such as 529 college savings plans; variable annuities and variable life insurance are the variable contracts. Selling ETFs requires a Series 7.

Securities trader S57

Required for representatives who trade equity, preferred, or convertible debt securities away from an exchange: proprietary trading (such as market making), executing trades on an agency basis, or directly supervising either. Developing an algorithmic trading strategy for those securities requires it too.

Investment banking representative S79

Required for representatives, assisting clients in transactions, exclusively with investment banking products and services.

Research analyst S86/87

Not a selling license - this license is required to prepare the substance of equity research reports. It’s distinct from the supervisory analyst (S16) role described above, which approves those reports rather than preparing them.