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Series 14 is an exam that is required to be taken by compliance officers who are employed by New York Stock Exchange (NYSE) brokerage firms in the United States. Any individual who supervises 10 or more people who perform compliance tasks must pass the Series 14 exam in order to make sure that they have adequate knowledge and training to carry out their job functions. The Financial Industry Regulatory Authority (FINRA) ensures that all of the compliance officers for brokerages in the U.S. conform to this requirement.
This exam consists of 110 multiple-choice questions with a three-hour time limit. It requires a score of 70 percent to pass the exam, but it can be retaken if failed. There is a fee charged for an individual each time he or she takes the Series 14 exam. The exam is administered at testing locations in most medium to large cities throughout the U.S., and there are no prerequisites to take it.
The creators of the Series 14 exam assume that the test takers have a basic knowledge of brokerage firm activities and securities regulations, but it takes expertise in specific topics to pass the exam. Topics covered in the Series 14 include trading in the primary and secondary markets, rules of the Municipal Securities Rulemaking Board (MSRB), financial responsibility, sales supervision, customer accounts supervision, and compliance. There are several resources on the Internet that provide education and training materials for this exam, and there are books that even contain practice exams.
One section of the Series 14 covers MSRB rules. The U.S. Congress created the MSRB in 1975 to oversee firms in the municipal securities industry. It maintains rules in order to protect investors along with state and local governments and other entities whose credit is backed by municipal securities. The rules of the MSRB were created to prevent manipulation and fraud in the market and to aid the mechanisms of an open-market system. For example, the MSRB has policies for dealers regarding the standardization of trade confirmations and settlement of securities transactions, as well as recordkeeping requirements for securities firms.
FINRA is a private organization that reports to the Securities Exchange Commission (SEC) and regulates securities firms, including all brokerages, in the U.S. The organization makes certain that businesses in the securities industry are being fair and honest. In addition to administering the Series 14 exam, it also provides education and registration for employees and firms, writes rules, and enforces federal laws. FINRA protects and advocates for investors by educating individual investors and through market regulation of the U.S. stock markets, such as the NYSE.
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