Series 27 – Financial and Operations Principal Exam

Short Course Summary

Achieve the Financial and Operations Principal (FINOP) license by passing the Series 27 exam. This advanced principal qualification is mandatory for individuals supervising a firm's financial and operational record-keeping and regulatory reporting.

Long, Catchy & Professional Course Description

The Financial Guardian: Become a Financial and Operations Principal (FINOP)

The FINRA Series 27—the Financial and Operations Principal Qualification Exam—is arguably the most technically demanding principal-level license. It is the mandatory qualification for the individual responsible for the firm’s financial and operational integrity, including the custody of customer securities and the filing of all required financial reports with the SEC and FINRA. The Series 27 is critical because its focus is on preventing insolvency and protecting customer assets.

This course is meticulously designed to prepare you for the intense technical and regulatory focus of the exam, which is structured around four critical areas of financial and operational compliance:

• Function 1: Financial Reporting and Recordkeeping (40%): This is the largest and most critical section. Master the requirements for generating the firm’s financial statements, the specific requirements for record retention (Rules 17a-3 and 17a-4), and the preparation of key regulatory filings like the FOCUS Report (Financial and Operational Combined Uniform Single Report) and required notices to the regulators.

• Function 2: Net Capital and Customer Protection (35%): Conquer the core of the exam: SEC Rule 15c3-1 (Net Capital Rule) and Rule 15c3-3 (Customer Protection Rule). You will learn to calculate Net Capital (including haircuts and non-allowable assets), determine reserve formula requirements, and manage the segregation and possession of customer funds and securities.

• Function 3: Clearing, Carrying, and Introducing Firm Operations (15%): Understand the mechanics and regulatory distinctions between clearing firms (carrying firms) and introducing firms. Master the rules governing securities processing, settlement, margin accounting (Regulation T), and the handling of fails-to-receive/deliver.

• Function 4: Supervisory and Management Activities (10%): Learn the specific supervisory responsibilities of the FINOP, including oversight of the firm’s Anti-Money Laundering (AML) compliance, internal controls, and the requirements for the annual independent audit process.

If your role requires you to certify the financial condition of your firm, ensure compliance with net capital requirements, and manage the custody of customer funds, the Series 27 is the mandatory qualification for your continued success and authority in a broker-dealer's highest operational ranks.

What Will Students Learn In Your Course?

1. Calculate Net Capital (Rule 15c3-1), including appropriate deductions and haircuts for various securities.

2. Master the Customer Protection Rule (15c3-3) requirements for reserve computation and segregation of customer assets.

3. Prepare and file the FOCUS Report, monthly statements, and other critical financial disclosures to regulators.

4. Oversee the firm’s regulatory record-keeping, audit process, trade settlement, and AML compliance programs.

Requirements

• Candidates must pass the Securities Industry Essentials (SIE) Exam and the Series 7 (General Securities Representative Exam) to be eligible for the FINOP registration.

• Association with and sponsorship by a FINRA member firm is required to take the Series 27 exam.

Who Is This Course For?

• Individuals designated or aspiring to be the Financial and Operations Principal (FINOP) of a broker-dealer.

• Chief Financial Officers (CFOs), Treasurers, Controllers, and Accounting Managers in the securities industry.

• Professionals requiring high-level expertise in Net Capital (15c3-1), Customer Protection (15c3-3), and regulatory reporting.