The Series 31 exam, administered by FINRA, allows individuals to sell managed futures and requires a General Securities Representative license. Managed futures invest in various asset classes, reducing overall risk. The exam covers rules, regulations, and responsibilities associated with selling futures. Study materials are available for a fee, and a minimum score of 70% is required to obtain a Series 31 license.
Series 31 is the exam for futures managed funds in the stock market industry. The Series 31 exam is administered by the Financial Industry Regulatory Agency (FINRA), a private corporation that was created to oversee transactions between brokers, dealers, and private investors. A series 31 license along with mandatory membership in the National Futures Association (NFA), a self-regulatory organization of the US futures industry, allows the holder to sell managed futures. Those wishing to take the exam must already have a General Securities Representative license, also known as a Series 7 license. The Series 31 license meets the proficiency requirements for membership in the NFA.
Futures are contracts to buy or sell a commodity or other financial instrument at an agreed price at some future date. Managed futures are funds that invest in a variety of asset classes, such as energy, agriculture, and currencies. This investment strategy introduces diversification into a fund, thereby reducing overall risk due to the fact that different asset classes tend to balance each other. Some are often gaining in value at the same time that others are declining in response to prevailing economic conditions.
Individuals taking this exam are required to answer 45 multiple-choice questions in 60 minutes that focus on the rules, regulations, and responsibilities associated with selling futures. Topics tested on the exam include general market knowledge, commodity trading advisory and commodity trader regulations and disclosure, fees and regulations, and promotional material. A Series 31 license is issued to individuals who score a minimum of 70% on the exam.
There are a variety of financial industry test preparation companies that provide print and electronic study materials for a fee. Some also offer self-guided online study courses. The NFA does not provide Series 31 training classes. However, it does offer a study summary on its website that provides information on the content covered in each of the futures industry exams, including the Series 3 exams. , Series 30, Series 31, Series 32 and Series 34.
Once ready to take the exam, the applicant must submit Form U10 and pay the required fee to FINRA through its website. Individuals who meet the NFA’s proficiency requirement by passing the Series 31 exam must register with the NFA before they can begin to act as a registered futures professional. Anyone who fails the exam for the first or second time must wait at least 30 days before taking it again. Those who fail a third time or later must wait a minimum of 180 days before attempting the exam again.
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