Series 38 - Canada Securities Representative Exam - No Options
The Series 38 exam - the Canada Securities Representative Qualification Examination (CN) - is an abbreviated version of the Series 7 exam that is appropriate for candidates who hold a registration in good standing with Canadian securities regulatory authorities and are seeking registration in the U.S.
The exam assesses the competency of the candidate to perform his or her job as a general securities representative in the U.S. It measures the degree to which each candidate possesses the knowledge needed to perform the critical functions of a general securities representative, including sales of corporate securities, investment company securities, variable annuities, direct participation programs, and government securities.
The Series 38 does not test options. This exam is only appropriate for candidates who, in addition to the specified prerequisites, have completed the Canadian options course.
The Series 38 exam consists of 45 test questions. Candidates have 75 minutes to complete the exam. The passing score is 72%.
Please see NASD Rule 1032(a)(2)(C) General Securities Representative for more information.
The Series 38 Content Outline provides a comprehensive guide to the range of topics covered on the exam, as well as the depth of knowledge required. It includes sample questions to acquaint candidates with the types of multiple-choice questions on the exam.
The outline consists of the five main job functions of a Series 38 representative.
- Function 1 - Seeks Business for the Broker-Dealer Through Customers and Potential Customers
- Function 2 - Evaluates Customers’ Other Security Holdings, Financial Situation and Needs, Financial Status, Tax Status and Investment Objectives
- Function 3 - Opens Accounts, Transfers Assets and Maintains Appropriate Account Records
- Function 4 - Provides Customers with Information on Investments and Makes Suitable Recommendations
- Function 5 - Obtains and Verifies Customers’ Purchases and Sales Instructions, Enters Orders and Follows Up
Download: Series 38 Content Outline
The Series 38 has a prerequisite exam requirement. In order to take the Series 38 exam, candidates must first meet the following requirements:
- Be in good standing with the Investment Industry Regulatory Organization of Canada (IIROC) and hold or have held an active registration with IIROC within the past two years.
- Have satisfied the following training and competence requirements:
- Passed the Canadian Securities Course
- Completed a 30-day training period
- Completed a 6-month period of supervision
- Completed either the Options Licensing Course (OLC) or the Derivatives Fundamental and Options Licensing Course (DFOL) or the Canadian Options Course, and one of the following:
- Passed the Partners, Directors, Officers Examination (PDO) (if completed prior to 5/24/04)
- Passed the Conduct and Practices Handbook Course (CPH)
- Passed the Registered Representatives Exam (RRX)
In addition, the firm must complete the following steps:
- File the Form U4 via FINRA Web CRD, and specifically request the CD registration. This will place the candidate in the Foreign Deficiency Queue in Web CRD. Upon completing this step, the Series 38 exam window will open.
- FINRA will contact IIROC to verify that the candidate meets the prerequisites requirements and will then remove the foreign deficiency.
- When the candidate passes the Series 38 exam and meets all other requirements, FINRA will approve the CD registration.
Failure to complete the above tasks in the prescribed order will delay the registration becoming active.
Please see Register a New Candidate for more information on the registration process.
Covered activities and products include the following:
- Public offerings and/or private placements of corporate securities (stocks and bonds)
- Mutual funds
- Money market funds
- Unit investment trusts (UITs)
- Options on mortgage-backed securities
- Government securities
- Repos and certificates of accrual on government securities
- Direct participation programs
- Securities traders
- Venture capital
- Exchange-traded funds (ETFs)
- Hedge funds
Taking the Exam
The table below lists the allocation of exam questions for each major job function of a CN representative:
|Job Function||Number of Questions|
|Function 1 - Seeks Business for the Broker - Dealer Through Customers and Potential Customers||7|
|Function 2 - Evaluates Customers’ Other Security Holdings, Financial Situation and Needs, Financial Status, Tax Status and Investment Objectives||7|
|Function 3 - Opens Accounts, Transfers Assets and Maintains Appropriate Account Records||12|
|Function 4 - Provides Customers with Information on Investments and Makes Suitable Recommendations||10|
|Function 5 - Obtains and Maintains Customer’s Purchase and Sales Instructions, Enters Orders and Follows Up||9|
Learn more about exam protocols and logistics here: On the Day of Your Exam.
1. What is the Series 38 exam, and what purpose does it serve?
The Series 38 is an abbreviated version of the Series 7 (General Securities Registered Representative) exam. It is appropriate for a candidate who is registered and in good standing with the Canadian securities regulatory organization and is seeking to become a registered representative with a FINRA member firm in the U.S. A candidate must meet eligibility prerequisites to take the Series 38.
2. What is the difference between the Series 37 and Series 38?
The Series 37 exam includes test questions that assess knowledge of options, whereas the Series 38 exam does not. Candidates wishing to sit for the Series 38 examination must first complete the Canadian options course.
3. Can an individual who qualifies for the CN registration by passing the Series 38 exam conduct the same business as an individual who qualifies for the GS registration by passing the Series 7 exam?
No, an individual who obtains the CN registration is qualified to conduct the same business as a general securities representative except that he or she is not permitted to conduct business in municipal securities.
4. What if an individual registered with the IIROC wants to sell municipal securities?
To sell municipal securities, the individual must pass the Series 7 (General Securities Representative) or the Series 52 (Municipal Securities Representative) exam, regardless of which IIROC exam he or she passed.
5. Does the Series 38 exam satisfy the prerequisite requirement for principal registration?
Yes, the Series 38 exam satisfies the prerequisite requirement for the Series 24 (General Securities Principal) and the Series 4 (Compliance Registered Options Principal) exams. The Series 37 examination does not qualify an individual to engage in municipal securities business; therefore, it does not satisfy the prerequisite for the Series 9/10 (General Securities Sales Principal), Series 51 (Municipal Fund Securities Principal) or Series 53 (Municipal Securities Principal) exam.
Using Reference Materials
The test administrator will provide whiteboard/dry erase marker and basic electronic calculators to the candidates, which must be returned to the test center administrator at the end of the testing session. Some test questions involve calculations. Only the provided calculators may be used during the examination.
The examination may contain questions that require the use of exhibits (e.g., charts, graphs, tables). If so, the questions will indicate when to refer to an exhibit.
Candidates are not permitted to bring any reference materials to testing sessions. Severe penalties are imposed on candidates who cheat or attempt to cheat on FINRA administered examinations.
To learn more about logistics and protocols for your exam day, please see On The Day of Your Exam.