Regulatory Requirement

Every Broker/Dealer is required to have an active Financial and Operations Principal (“FinOp”). The requirement is for this person to have one-year of direct or two-years of related experience to function as FinOp. The FINRA Financial and Operations principal Qualification Examination is designed to test a candidate’s knowledge of applicable rules and statutory provisions relating to broker-dealer financial responsibility and recordkeeping and the protection afforded investors under the Securities Investor Protection Act of 1970. The examination and this study outline are divided into seven general areas, which are as follows: Keeping and Preservation of Records and Broker-Dealer Financial Reporting Requirements; Net Capital Requirements; Customer Protection; Municipal Securities Rulemaking Board Regulations; Federal Reserve Board Regulations; Uniform Practice Rules; Other Relevant Regulations and Interpretations.

A candidate must correctly answer 70 percent of the questions to receive a passing grade. The examination is a closed-book test and candidates will not be permitted to use any reference material during their testing session. Scratch paper and a basic electronic calculator will be provided by the test center administrator. Examination questions are updated regularly to reflect the most current interpretations of the rules and regulations.

The following are the 2 different examinations that would qualify a FinOp:

  • Financial and Operations Principal – (Series 27) – 145 multiple choice questions; 3 hours and 30 minutes testing time. The Series 27 is designed to test a candidate’s knowledge and understanding of financial responsibility rules and recordkeeping requirements.
  • Introducing Broker/Dealer Financial and Operations Principal – (Series 28) – 95 multiple choice questions; 2 hours testing time. This examination is required for the individual responsible for the recordkeeping requirements of introducing firms that do not carry customer accounts or hold customer funds or securities.