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Series 72 is one of 39 professional license examinations offered by the Financial Industry Regulatory Authority (FINRA), the U.S. securities industry self-regulatory organization, to those looking to become an account representative or broker, professional trader, licensed clerk or manager at a securities brokerage or investment bank. Known formally as the Government Securities Limited Representative Qualification Examination, FINRA's Series 72 test qualifies individuals as a registered representatives permitted to transact a member company's business in government securities, agency securities, and agency mortgage-backed securities.
Series 72 is a closed-book exam comprised of 100 multiple choice questions; candidates are provided with a basic electronic calculator and scratch paper. Test takers are given a maximum three hours to complete the Series 72 exam and need a minimum score of 70 in order to pass. Candidates must be sponsored by a FINRA member firm in order to take the exam.
Earning a Series 72 license is an early stepping stone on a career path in the securities brokerage, trading, and investment banking industry, more specifically for those assigned or who have chosen to work in the markets for U.S. government, government agency, or government agency-backed mortgage-backed securities (MBS) markets. The Series 72 exam is divided into six sections: government securities; mortgage-backed securities; related securities and financial instruments; economic activity, government policy, and the behavior of interest rates; securities industry regulations and legal considerations; and customer considerations.
Given the size of the U.S. government budget and housing market, the financial securities markets covered in the Series 72 exam are the largest, most liquid, and most actively traded markets of their kind in the world. On the other hand, it is advisable that prospective candidates check with their sponsor firm to assure themselves that they will not need to take a more general securities licensing exam, such as the Series 7 General Securities Registered Representative Exam.
FINRA is the largest industry self-regulatory organization for securities firms in the U.S. Consolidating the New York Stock Exchange (NYSE), NYSE Regulation, Inc. and the National Association of Securities Dealers, FINRA was created in 2007 upon approval by the U.S. Securities Exchange Commission. It is responsible for regulatory and compliance oversight of approximately 4,700 brokerage firms, 167,000 branch offices, and 637,000 registered securities representatives. Any individual employed by a FINRA member firm and involved in its securities business must register with FINRA. This includes partners, officers, directors, branch managers, department supervisors, and salespersons.