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Series 31 is the Futures Managed Fund Examination in the stock market industry. The Series 31 exam is administered by the Financial Industry Regulatory Agency (FINRA), a private corporation that was created to oversee transactions between brokers, dealers, and private investors. A series 31 license together with mandatory membership in the National Futures Association (NFA), a self-regulatory U.S. futures industry organization, permits the holder to sell managed futures. Those who wish to take the exam must already hold a General Securities Representative license, also known as a Series 7 license. The Series 31 license meets the proficiency requirements for NFA membership.
Futures are contracts to buy or sell a commodity or other financial instrument at an agreed upon price at some future date. Managed futures are funds that invest in a range of asset classes, such as energy, agriculture, and currency. This investment strategy introduces diversification into a fund, thus reducing overall risk due to the fact that different asset classes tend to balance each other. Some typically gain value at the same time others are declining in response to prevailing economic conditions.
Individuals who sit for this exam are required to answer 45 multiple-choice questions in 60 minutes that focus on the rules, regulations, and responsibilities associated with selling futures. Topics tested on the exam include general market knowledge, commodity trading advisor and commodity pool operator regulations and disclosure, fees and regulations, and promotional material. A Series 31 license is granted to individuals who achieve a minimum score of 70% on the exam.
There are a variety of financial industry test preparation companies that provide print and electronic study materials for a fee. Some also offer self-guided online study courses. The NFA does not provide Series 31 training classes. It does, however, offer a study outline on its website that provides information on content covered on each of the futures industry examinations, including the Series 3, Series 30, Series 31, Series 32, and Series 34 exams.
Once ready to sit for the exam, an applicant must submit Form U10 and pay the required fee to FINRA via its website. Individuals who meet the NFA’s proficiency requirement by passing the Series 31 exam must then register with the NFA before they can begin to act as a registered futures professional. Anyone who fails the exam a first or second time must wait at least 30 days before retaking it. Those who fail it a third or subsequent time must wait a minimum of 180 days before attempting the exam again.
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