Learn something new every day
More Info... by email
Series 82 is a financial examination in the United States. It is designed for financial representatives who will sell stock in a company to private investors rather than through a public stock market flotation. Because the exam is so limited in scope, it is only suitable for people who will be working solely in this role.
The content of the series 82 exam relates to private placement offerings. This is a form of selling stock to private investors that does not involve a public offering. The ultimate effect is the same and the business involved will still become partially owned by investors. Those who pass the exam are only qualified to directly arrange sales of the stock from the company and cannot be involved in future sales between investors. The qualification does not cover sales of municipal or government securities.
There are both benefits and drawbacks to such a system from a regulatory perspective. The advantages are that there are fewer restrictions on the size of the company offering the shares, and that the costs and administration are considerably lower. The main disadvantages are that there is a limit on how much a company can raise in this way, and it may be harder to attract investors because of their fear that it will be comparatively harder to find people to sell the stock on to in the future.
The series 82 exam was introduced by the Gramm-Leach-Bliley Act of 1999. This was a law that reduced regulation in the financial services industry. In particular, it removed the barriers between investment banks, commercial banks and insurance companies. There is an $80 US Dollar (USD) test fee to take the series 82 exam. The exam is administered by the Financial Industry Regulatory Authority (FINRA), a private corporation that regulates its members.
The series 82 exam contains 100 questions and has a time limit of 150 minutes. Candidates must score at least 70% on the exam to pass. The subjects covered by the exam fall into four main areas, but the precise breakdown varies a little from one exam to the next. Approximately 13 questions involve the characteristics of corporate securities, and about 45 questions deal with the regulation of the markets in securities, both registered and unregistered. Approximately 16 questions involve the analysis of corporate securities and investment planning, and finally, about 26 questions test the person's knowledge of the handling of customer accounts and industry regulations.