The Series 53 exam, also known as the Municipal Securities Principals Exam, is a securities license exam administered by the Financial Industry Regulatory Authority (FINRA) that tests an individual’s knowledge of basic securities products and investment banking principles. The Series 53 exam is required for anyone who wants to sell and trade securities products, such as stocks, bonds, and mutual funds. Series 53 is also required for anyone who wants to buy and sell municipal securities. Have questions about the Series 53 Exam? Click here. The Series 53 license is typically required of: Individuals must meet the following eligibility requirements in order to take the Series 53 exam: However, individuals who have a Series 63 or Series 66 license do not need a sponsoring firm in order to take the Series 53 exam. The Series 53 Exam is a three hours and thirty minutes exam consisting of 100 multiple-choice questions. The exam covers six topics: Understanding the regulatory environment in which the municipal securities industry operates is critical for anyone working in this market. This section includes questions on topics such as the role of the SEC, FINRA, MSRB, and DTC in the municipal securities market, and the regulation of municipal securities products. Responsibilities and general supervision of individuals licensed in the municipal securities industry are covered extensively in this section of the Series 53 exam. This includes questions on topics such as recordkeeping and trade allocation requirements for broker-dealers, suitability obligations for advisors, and suitability obligations for dealers. Supervision in the municipal securities industry is essential to protecting investors. This section covers topics in sales supervision, including questions on what FINRA rules govern the supervision of registered individuals who are not employees, rules governing floor brokers and outside business activities, advertising guidelines for broker-dealers, how FINRA enforces its own rules, etc. Understanding a dealer's obligations when originating and syndicating securities is critical for anyone working in the municipal securities market. This section includes questions on topics such as how to price securities, what constitutes fair dealing, due diligence requirements for underwriters, and restrictions on insider trading. The Series 53 exam covers a broad range of topics related to trading municipal securities, including questions on how the SEC treats debt issuances and debt repurchases. Understanding what is needed to effectively operate a municipal securities business is important for anyone seeking to work in this field. This section includes questions on topics such as the process of placing an order with a broker-dealer, how to trade options and futures contracts, and what constitutes a valid trade. Here are a few examples of questions that could appear on the Series 53 Exam: 1) What is the role of the SEC in regulating the municipal securities market? Answer: B 2) If a municipal securities broker-dealer is not responding to customer complaints, what agency may the MSRB refer such complaints to? Answer: A 3) Which of the following would constitute trade for purposes of FINRA's suitability rule? Answer: B To pass the Series 53 exam, you must answer at least 70 of the 100 questions correctly. As of 2024, the price is expected to be $265. This fee includes the cost of registration, as well as one free retake. The following are some tips that may be helpful when taking the Series 53 Exam. If you follow these tips, you should be able to pass the Series 53 Exam with ease. The Series 53 exam tests the knowledge needed to effectively operate a municipal securities business. Even though this exam is not mandated by any government agency, it is designed to ensure that those who work in the industry possess an adequate level of knowledge regarding topics such as accepting orders and executing trades. Taking practice exams can help you perform your best on test days, so consider using them when studying.Who Must Take the Series 53 Exam?
Eligibility
Exam Coverage
Federal Regulations (4 questions)
General Supervision (23 questions)
Sales Supervision (25 questions)
Origination and Syndication (23 questions)
Trading (10 questions)
Operations (15 questions)
Sample Questions on the Series 53 Exam
Passing Score
Cost of Taking the Exam
Tips for Passing Series 53 Exam
As with any test, practicing can help improve your chances of passing. The more familiar you are with the material, the better you will perform on exam day.
A well-rested mind is a focused mind.
If you are not sure which choice is correct, eliminate any that you know are incorrect first, then select the one that remains.
Remember, each answer has justifications for why it is correct, so be sure to read these carefully.
If you are unsure of an answer, mark it for review and move on. You will not lose points for incorrect answers, but you will lose points for unanswered questions.
There is no penalty for guessing or leaving questions blank, so do not feel that you have to rush through the exam.
Remember that you have prepared for this exam and you are likely to do well if you remain focused.The Bottom Line
Series 53 Exam FAQs
The Series 53 exam is a licensing test for firms employed in the municipal securities business. It provides a uniform standard for the industry by testing knowledge of regulatory requirements; it also ensures that those who work in this sector know the limits of their abilities and conduct themselves accordingly.
Anyone working for a registered broker-dealer must pass the Series 53 exam to qualify for employment.
The Series 53 exam covers topics such as business operations, rules and regulations, practices, transactions, taxes, and fees.
As of 2024, there are 100 multiple choice questions on the exam.
The passing score for the Series 53 exam is 70 of 100 questions correctly answered.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
