Series 30 Test Breakdown

The Financial Industry Regulatory Authority (FINRA) puts out the Series 7 exam. The exam has 260 questions in total. 125 for each part and 10 pre-test questions that do not count towards the exam grade and are not indicated in the exam. A passing score is 70%. The questions are in multiple choice format.

As the stock market boom ended, more people began trading commodities and futures contracts, and the industry continues to experience steady growth. As companies expand, there's a lot of room for career advancement for commodities traders, including managing branch offices. To qualify to become a branch manager of a futures trading firm, you'll need to pass the Series 30 Branch Manager Futures exam-it's a requirement of the National Futures Association, the main governing board over the futures industry. Although the Series 30 exam is required by the NFA, it's actually administered by the Financial Industry Regulatory Authority (FINRA), which means you can take the test at a convenient location at one of many authorized testing centers all over the country.

In most places it's offered six days a week, Sunday being the exception, and the cost is $60. The Series 30 test is one hour long, and consists of 50 multiple choice questions, and you'll need to answer 70% correctly in order to pass. 50 multiple choice questions may not sound difficult, but you'll need a lot of knowledge to do well on the Series 30. You'll need to master a wide range of subjects relating to futures trading- the laws and regulations governing commodity pool operators and commodity trading advisors, solicitation rules, account handling procedures, employee rules and ethics, NFA regulations, record keeping, disciplinary procedures, order entry rules, risk disclosure requirements, the wide range of futures trading products and vehicles, order entry, handling customer's money, net capital requirements, and much more.

The Series 30 is a tough exam, but with hard work and diligent preparation you should be able to pass it, and enhance the prospects of your career in the futures industry.

Series 30

1. For how long must promotional material be kept on file from the date of its last use?

a. 3 years

b. 6 years

c. 10 years

d. 5 years

2. When may a member or registered representative exercise discretionary power in a customer’s account?

a. As soon as the customer provides written authorization to a stated individual or individuals

b. After the customer provides written authorization to a stated individual or individuals and it is submitted to the member

c. After the customer provides written authorization to a stated individual or individuals and the member has approved the account as evidenced in writing by the member

d. Anytime

3. In regards to bunched orders, which of the following is NOT a responsibility of the futures commission merchant (FCM)?

a. Maintain records that, as applicable, identify each order subject to post-execution allocation and the accounts to which the contracts were allocated

b. Must receive sufficient information from an account manager to allow it to perform its functions

c. Allocate contracts executed through a bunched order

d. If there is notice of unusual allocation activity, must make a reasonable inquiry into the matter and, if appropriate, refer the matter to the proper regulatory authorities (e.g., the CFTC or NFA or its DSRO).

4. How long can a CTA/CPO use a Disclosure Document as long as there are no material changes to be made?

a. 6 months

b. 12 months

c. 18 months

d. 24 months

5. Which two reports are CPOs required to distribute to pool participants?

a. Statement of Additional Information (SAI) and Annual Report

b. Semi-Annual Report and Annual Report

c. Account Statement and Semi-Annual Report

d. Account Statement and Annual Report

Answers

1. D: Promotional material must be kept on file for 5 years from the date of its last use. During the first 2 years of the 5 year period, the file must be in a readily accessible location.

2. C: A member or registered representative may exercise discretionary power in a customer’s account after the customer provides written authorization to a stated individual or individuals and the member has approved the account as evidenced in writing by the member. Answer A is incorrect as written authorization from the customer is only the first step of the approval process. Answer B is incorrect, because the member must approve the account before discretionary power may be exercised. Answer D is incorrect as the account must be approved by the member before discretionary power may be exercised.

3. C: Allocating contracts executed through a bunched order is the responsibility of the CTA. Answers A, B, and D are incorrect as they are all responsibilities of the FCM.

4. B: A CTA/CPO may use a Disclosure Document for 12 months after it has been approved as long as it does not need to be updated sooner due to material changes to the information. The Disclosure Document must be reapproved after 12 months in order for its use to be continued.

5. D: CPOs are required to distribute an account statement and an annual report to pool participants. Statements of additional information and semi-annual reports are not required.

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Last Updated: 04/18/2018


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