The complete guide to the FINRA Series 9 & 10 exams

The Series 9 and 10 exams are crucial qualifications in the field of securities management. These exams are designed by the Financial Industry Regulatory Authority (FINRA) to assess the competency of individuals aiming to become principals or managers in the securities industry. This post will offer a comprehensive overview of the Series 9 and 10 exams, including their content, how to register for the exams, how long to prepare for, how much the exams cost to take, and other relevant information.

What are principals?

Principals are professionals who have the legal authority to supervise the activities of securities sales personnel, particularly those holding a Series 7 license.

The Series 9 and 10 exams are considered principal-level qualification exams, and candidates are required to be associated with and sponsored by a FINRA member firm or another self-regulatory organization member firm. Upon successful completion of these exams, individuals are qualified to supervise general securities sales activities at broker-dealer firms, enhancing their career prospects in the financial industry.

The Series 9 and 10 exams are taken separately, each focusing on different aspects of securities management. The Series 9 exam, also known as the General Securities Sales Supervisor – Options exam, tests the candidate’s knowledge on supervising sales of various securities, including corporate, municipal, and options securities. On the other hand, the Series 10 exam deals with a broader range of content, including corporate securities, rights, warrants, mutual funds, government securities, and more. These exams cover topics such as supervising customer accounts, sales practices, trading activities, and communication with the public.

To be eligible for these exams, candidates must first pass the Securities Industry Essentials (SIE) Exam and the General Securities Representative Exam (Series 7).

Series 9 / 10 overview

Content of the Series 9 / 10

The Series 9 exam, consisting of 55 questions and lasting 90 minutes, covers several topics:

• Options Sales and Trading Practices: This section tests the candidate’s knowledge of options trading principles and strategies. It includes understanding different types of options, such as calls and puts, and their respective trading tactics. Candidates must demonstrate proficiency in evaluating and managing various options trades and strategies.
• Supervision of Options Sales Personnel and Trading: A significant portion of the Series 9 exam revolves around the supervision of options sales staff. This includes overseeing compliance with regulatory requirements, monitoring trading activities, and ensuring ethical sales practices. Candidates must understand the rules and guidelines for supervising options sales activities and personnel.
• Options Accounts: This involves evaluating the suitability of options trading for different clients, understanding margin requirements, and managing risks associated with options trading.
• Regulatory Requirements and Guidelines: A thorough understanding of the rules and regulations governing options trading and sales is critical. This section covers compliance with SEC, FINRA, and other regulatory bodies’ rules, including reporting requirements, record-keeping, and ethical standards.
• Risk Management and Minimization: Candidates must demonstrate knowledge of risk management strategies in options trading. This includes understanding and applying techniques to minimize risk for both the firm and its clients.

Problem Resolution: The exam also tests the ability to resolve issues related to options trading and sales. This includes handling customer complaints, addressing trade errors, and implementing corrective actions when necessary.

The Series 10 exam, which includes 145 questions and is 4 hours in length, has a broader scope. The topics covered on the exam include:

• Supervision of Sales Activities and Personnel: This section tests the candidate’s ability to oversee brokerage firm sales activities and personnel. It includes managing sales practices, supervising brokers and other sales personnel, and ensuring compliance with industry standards.
• Regulatory Framework and Compliance: A significant portion of the exam is dedicated to understanding the rules and regulations of various regulatory bodies like FINRA, SEC, and other securities-related organizations. This includes knowledge of registration requirements, reporting standards, anti-money laundering protocols, and ethical conduct.
• Municipal, Corporate, and Government Securities: The exam assesses knowledge of various types of securities and investment products, and the supervision of their sales. Understanding the characteristics, risks, and compliance aspects of these securities is crucial.
• Trade and Settlement Practices: This involves understanding the processes of trade execution, clearing, and settlement, as well as supervising these activities to ensure they are conducted efficiently and in compliance with regulations.
• Handling Customer Accounts and Trade Disputes: The Series 10 exam tests the ability to manage customer accounts effectively, including issues related to suitability, customer complaints, dispute resolution, and account transfers.
• Prohibited Practices and Conduct Rules: This tests the understanding of what constitutes prohibited practices in the securities industry. This section includes understanding manipulative practices, conflicts of interest, insider trading, and other unethical behaviors.
• Communications with the Public: Supervising how information is communicated to clients and the public, ensuring that all communications are fair, accurate, and not misleading, is a critical part of the exam.

How much does the Series 9 and Series 10 cost?

The cost for taking the Series 9 exam is $130.

The cost for taking the Series 10 exam is slightly higher, at $175.

Is the Series 9 / 10 hard?

The Series 9 and 10 exams are challenging. They are similar in content style to the Series 7 exam, but are more advanced and cover more complex strategies and their suitability for clients. The Series 9 and 10 exams both have approximately 70% pass rates according to FINRA, but keep in mind that the people taking these tests are effectively managers and likely have multiple years of operating with a Series 7 license under their belt. A 70% pass rate among such a small and experienced group still belies a very tough set of tests.

The Series 9 exam is focused on options, which can be a tricky subject for even experienced professionals. And the Series 10 exam is longer and much broader than the Series 9 in terms of what it covers. Expect these exams to be challenging and make adequate preparations with that in mind.

How to prepare for the Series 9 / 10

To sit for these exams, candidates must first have have passed the FINRA SIE and Series 7 exams. They must be associated with and sponsored by a FINRA member firm or another applicable self-regulatory organization (SRO) member firm. Registration involves the affiliated FINRA member firm filing an application through the CRD portal using Form U4, which opens a 120-day enrollment window for the exams.

Once you’re registered to enroll for the exams, you need to prepare for them with some kind of material. You won’t be able to take the FINRA outline and research everything you need to know on your own without considerable effort, and there’s no need to do that when prep options are available to you. Your firm will likely have a vendor in mind, but if not, there are five main paths (ordered from least to most expensive):

• Paper textbook: Study at your own pace, entirely self-directed, but no adaptive support, analytics, or interactivity. Textbooks can cost anywhere from $50 – $300, but most are on the lower end.
• Online self-study course: Study at your own pace, interactive, and provides analytics. Good programs (such as Achievable’s Series 9 prep course) will adapt to your strengths and weaknesses, and motivate you to stay on schedule with your studies. Most Series 9 / 10 online courses are between $250 and $600 each, or a bundle for roughly 1.5 – 2X the individual course cost.
• Online class: Online classes on a set schedule. This can be helpful for staying on task and it is nice to have an instructor available to answer your questions. The catch is that class-based prep is much more expensive – most online Series 9 / 10 classes are in the range of $1,500 – $2,500.
• In-person class: Offline classes on a set schedule. While many of the benefits of online classes are also shared by in-person classes, there are some tradeoffs with convenience and flexibility. That said, some find the in-person setting better for staying on schedule with their work and getting help with tough areas than even online classes. The tradeoff is that you will need to travel to a classroom, which is time consuming and requires that you’re in town for the duration of the program. The cost is similar to online classes or a bit higher.
• Hiring a Series 9 / 10 tutor: Hiring a personal Series 9 / 10 tutor will give you the most personalized support and feedback on questions. Good tutors will also tailor their approach to your specific needs to help you get the most out of their tutoring sessions. And unfortunately, tutoring is by far the most expensive option, typically costing between $150-300 an hour.

In all of the above options, the quality of your course is going to vary depending on the instructor you get and the firm you work with. For online courses, the quality of the software product you’re using also has a big impact on your studies.

One economical approach that many use is to start with an online self-study course, and then hire a tutor to target weak areas. But if cost is no object, then going with a tutor from the beginning will be your most hands-on option.

How long should you study for the Series 9 and 10?

The amount of time required to study for the FINRA Series 9 and 10 exams can vary widely depending on several factors, including your background knowledge, experience in the financial industry, study habits, and the specific requirements of the two respective exams. Given that the Series 9 is a smaller exam (55 questions), candidates might spend approximately 30-45 hours studying, over a period of 3-5 weeks. For the more extensive Series 10 exam (145 questions), candidates are recommended to study for 70-80 hours over a period of 6-8 weeks.

How to study for the Series 9 and 10

While everyone has different ways of studying, here are some key best practices:

• Keep a Consistent Schedule: Establish a consistent study schedule, dedicating specific hours each day or week to studying.
• Review Study Materials: Utilize various study materials, including official FINRA resources, textbooks, online courses, and practice exams. Common advice is to try for at least two sets of vendor practice questions to see multiple ways that problems can be presented to you.
• Take Practice Exams: Regularly take practice exams to assess your knowledge and get comfortable with the exam format and time constraints. Use these as checkpoints that can give you the information you need to target the rest of your studies.
• Always Reinforce: Spend additional time reviewing areas where you are weak or less confident. Adjust your study plan based on your progress and comfort level with the material. Don’t be afraid to change your test date if you aren’t hitting a passing score or higher consistently with your vendor’s practice exams. Remember, quality of study is often more important than quantity, so focus on understanding concepts thoroughly rather than just memorizing facts.

How to take the Series 9 and 10

Registering via FINRA via Form U4

Candidates must first be registered for the exams with FINRA, receiving authorization from their sponsoring firm. This involves the submission of Form U4, which is facilitated by the sponsoring firm through the FINRA Central Registration Depository system.

Finding a test location (Prometric test center)

Exams are scheduled at Prometric test centers. This can be done through FINRA’s website, where candidates will be able to find which test location and time works best. back-to-back scheduling is available, allowing candidates to book two appointments on the same day at the same test center in a single transaction.

Online testing option

Candidates also have the option of taking the test online, though it was restricted significantly on June 9th, 2023, by FINRA. Candidates will need to have an approved accommodation to schedule an online appointment for any NFA or FINRA exam (other than the SIE).

There is an extensive list of check-in procedures for online testing that must be followed as precautions against cheating. These procedures include, but are not limited to using a detachable web-camera, showing your proctor your complete workstation and surrounding area, rolling up your sleeves of both your shirt and pants and turning your pockets inside out, and putting up your hair if it covers your ears. The full check in process is detailed here: https://proscheduler.prometric.com/scheduling/testInformation

What to bring to your Series 9 / 10 test day (permitted items)

On the day of the exam, candidates must present a valid, government-issued identification with a signature and picture (like a driver’s license, passport, or military ID). All personal items must be stored in a locker, as they are not permitted inside the testing room. This includes electronics, watches, and non-medical devices. Prometric provides candidates with necessary items like a calculator (non-programmable, non-printing) and erasable note boards. Also, consider bringing a snack and a drink for use right before the test or during any breaks.

After taking the Series 9 and 10

When do you know if you passed?

Candidates immediately know if they have passed the exam. For test center delivery, they receive a printed copy of the pass/fail results. Official notification of pass/fail results or completion status is sent to the firm’s Compliance/Registration Department within 48 hours. For online tests, results are displayed on the screen, and official results are emailed within three business days. It typically takes a few days for the registration to become official within FINRA following the exam.

How many times can you take the Series 9 and 10?

There is no limit to the number of times you can take the Series 9 and Series 10 exams. However, each failed attempt requires you to wait for the specified period before you can retake the exam. After failing once, you must wait 30 days before retaking the exam. After three failed attempts, you will have to wait approximately 6 months before taking the exam again.

Do you have to take the Series 9 and 10 on the same day?

No, you can take them separately. However, you need to pass the second test within 2 years of passing the first one or the first pass is invalidated and you have to start over.

Jasper Stoddard

13 Feb 2024, 12 min read