Series 11 - Registered Sales Assistant
Registered Sales Assistant Exam
The FINRA Series 11 exam is also known as the Assistant Representative-Order Processing Examination. Passing it qualifies a brokerage sales assistant to take and enter unsolicited client orders on behalf of a financial advisor, and to give current securities price quotations. An unsolicited order to buy or sell securities is one made by the client on his or her own initiative, without recommendations, prompting or suggestion from an employee of the financial services firm accepting the order for processing.
Higher Standards at Larger Firms
The Series 11 exam is, essentially, a highly truncated and simplified version of the equivalent parts of the Series 7 exam. Note, however, that the largest retail brokerage firms tend to hold their registered sales assistants to a much higher standard of knowledge, requiring them to pass both the Series 7 and Series 66 exams, the same tests that their financial advisors must pass.
Restrictions on Series 11 Registrants
Series 11 registered sales assistants must adhere to these restrictions on their work activity:
- They must be physically present on the premises of their member firm when accepting and processing unsolicited client orders or when giving price quotations.
- They must be under the direct supervision of an appropriately registered principal.
- They may not offer investment advice or opinions.
- They may not make recommendations.
- They may not enter orders on behalf of the member firm itself.
- They may not accept or open new accounts.
- They may not pre-qualify existing clients.
- They may not accept orders for municipal securities or direct participation programs.
- They may not receive extra direct or indirect compensation for the number or size of the transactions that they process.
Advantages of Registered Sales Assistants
A Series 11 registered sales assistant can be of particular value to a busy financial advisor or financial advisor team that receives a significant volume of unsolicited trade orders from clients in his/her/its book of business.
Disadvantages of Registered Sales Assistants
A registered sales assistant who is subject to the restrictions listed above is a pure order taker, who cannot offer advice and counsel. The financial advisor of record thus may want to handle unsolicited orders, to offer such advice to clients where appropriate, when these orders might be ill-advised.
Content of the Exam
The Series 11 exam consists of 50 questions and takes one hour. A score of 70% is a passing grade. The main topical areas covered in the exam are:
- Types of securities
- Customer accounts and orders
- Securities markets
- Security industry regulations
More particularly, the Series 11 exam tests knowledge of:
- Classes of common stock; market value/current price; fractional shares
- Types of preferred stock, such as cumulative, convertible, callable and adjustable/variable rate
- The distinction between common and preferred stocks and debt securities
- Types of options and basic terminology
- American depositary receipts/shares (ADRs and ADSs)
- Real estate investment trusts (REITs)
- Types of investment company products and exchange-traded funds (ETFs)
- Types of accounts and the transactions that can be made in each
- Accepting customer orders and transmitting them for execution
- Types of transactions and orders and when they are used
- Information to be recorded on a client order ticket
- Determining a client's ability to deliver securities to be sold
- Settlement requirements
- Securities markets and the differences between auction and dealer markets
- Terminology related to securities transactions
- Requirements in effect during trading halts
- Roles of the SEC and the Federal Reserve
- Roles of FINRA and other self-regulatory organizations
- The Securities Exchange Act of 1934
- Insider trading
- FINRA and NASD rules on registration, qualification and continuing education
- Rules of professional conduct
- Supervisory and compliance procedures at member firms