Series 34 Exam Presentation


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The Series 34 Exam is the new exam required by the CFTC for forex managers. This presentation provides an overview of the series 34 exam and how to study for the series 34 exam.

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  • Series 34 Exam Presentation

    1. 1. For an audio version of this presentation, please go to Series 34 Exam Retail Off-Exchange Forex Examination By Bart Mallon, Esq.
    2. 2. Overview <ul><li>Background – Forex Registration </li></ul><ul><li>Series 34 Basics </li></ul><ul><li>Sections and Weighting </li></ul><ul><li>Major Exam Topics </li></ul><ul><li>Recommended Study Techniques </li></ul><ul><li>My Thoughts on the Exam </li></ul><ul><li>Questions </li></ul><ul><li>Disclaimer </li></ul>Page 1 of 9 ©
    3. 3. Background - Forex Registration <ul><li>Commodities Exchange Act </li></ul><ul><ul><li>Regulation of commodities and futures trading </li></ul></ul><ul><ul><li>No previous regulation of Forex activities (except limited anti-fraud authority) </li></ul></ul><ul><li>Farm Bill </li></ul><ul><ul><li>Passed by Congress on May 22, 2008 </li></ul></ul><ul><ul><li>Major items with regard to off-exchange forex </li></ul></ul><ul><ul><ul><li>Codifies CFTC’s anti-fraud authority </li></ul></ul></ul><ul><ul><ul><li>Requires registration for Forex CTAs, CPOs, IBs </li></ul></ul></ul><ul><ul><ul><li>Minimum capital requirements for FCMs and FDMs </li></ul></ul></ul><ul><li>New Forex Regulations </li></ul><ul><ul><li>To be proposed by CFTC </li></ul></ul><ul><ul><li>Subject to comment period </li></ul></ul>Page 2 of 9 ©
    4. 4. Series 34 Exam Basics <ul><li>Who? </li></ul><ul><ul><li>Principals and Associated Persons of a Forex CTA, Forex CPO, or Forex Introducing Broker </li></ul></ul><ul><li>What? </li></ul><ul><ul><li>Number of Questions: 40 True/False and Multiple Choice </li></ul></ul><ul><ul><li>Time: 1 hour </li></ul></ul><ul><ul><li>Passing Score: 70% </li></ul></ul><ul><ul><li>Subject Matter: Retail Off-Exchange Forex </li></ul></ul><ul><ul><li>Cost: $70 </li></ul></ul><ul><li>When? </li></ul><ul><ul><li>Tests can be scheduled anytime </li></ul></ul><ul><li>Where? </li></ul><ul><ul><li>Pearson and Prometric Testing Facilities </li></ul></ul><ul><li>How? </li></ul><ul><ul><li>Submit online Form U-10 through FINRA website (no sponsor is needed) </li></ul></ul><ul><ul><li>Select exam time on Pearson or Prometric website </li></ul></ul><ul><li>Why ? </li></ul><ul><ul><li>The CFTC is likely going to require forex managers to pass a proficiency exam. The NFA has designated the Series 34 as that proficiency exam. </li></ul></ul>Page 3 of 9 ©
    5. 5. Sections and Weighting Page 4 of 9 ©
    6. 6. Major Exam Topics <ul><li>Definitions and Terminology  (10 questions) </li></ul><ul><ul><li>American/European Terms </li></ul></ul><ul><ul><li>Currency pair, exchange rate, currency crosses, cross rates </li></ul></ul><ul><ul><li>Interest rate parity </li></ul></ul><ul><li>Forex Trading Calculations (8 questions) </li></ul><ul><ul><li>Profit and loss calculations** </li></ul></ul><ul><ul><li>Cross rate transactions </li></ul></ul><ul><ul><li>Pip values </li></ul></ul><ul><ul><li>Effects of leverage calculations </li></ul></ul><ul><li>Risks Associated with Forex Trading (4 questions) </li></ul><ul><ul><li>Credit Risk </li></ul></ul><ul><ul><li>Country Risk </li></ul></ul><ul><ul><li>Exchange Rate Risk </li></ul></ul><ul><ul><li>Interest Rate Risk </li></ul></ul>Page 5 of 9 © <ul><li>Forex Market - Concepts, Theories, Economic Factors and Indicators, Participants (10 questions) </li></ul><ul><ul><li>BOP, BOT, current account, capital account </li></ul></ul><ul><ul><li>Forex clearing – CHIPS, fedwire </li></ul></ul><ul><ul><li>Central bank activities – interventions, sterilized interventions, discount rates </li></ul></ul><ul><ul><li>Elasticity of exchange rates </li></ul></ul><ul><ul><li>Fisher effect, international Fisher effect </li></ul></ul><ul><ul><li>Purchasing power parity </li></ul></ul><ul><li>Forex Regulatory Requirements  (8 questions) </li></ul><ul><ul><li>NFA Interpretive notices: Forex Transactions, Rule 2-36(e) </li></ul></ul><ul><ul><li>Know your customer </li></ul></ul><ul><ul><li>Promotional material </li></ul></ul><ul><ul><li>Security deposit rules </li></ul></ul>
    7. 7. My Thoughts on the Exam <ul><li>My scores </li></ul><ul><ul><li>Definitions and Terminology 7 of 10 (70%) </li></ul></ul><ul><ul><li>Forex Trading Calculations 6 of 8 (75%) </li></ul></ul><ul><ul><li>Risks Associated with Forex Trading 3 of 4 (75%) </li></ul></ul><ul><ul><li>Forex Market - Concepts, Theories, Economic Factors and Indicators, Participants 6 of 10 (60%) </li></ul></ul><ul><ul><li>Forex Regulatory Requirements 8 of 8 (100%) </li></ul></ul><ul><ul><li>Total Correct – 30 of 40 </li></ul></ul><ul><ul><li>Time to complete the exam – approximately 42 minutes </li></ul></ul><ul><li>Calculation heavy </li></ul><ul><ul><li>Be prepared to use the calculator on the exam (approx. 5 questions) </li></ul></ul><ul><ul><li>Don’t spend too much time on any one question </li></ul></ul><ul><li>Note on Pacing </li></ul><ul><li>Other </li></ul><ul><ul><li>Shorting currency pairs </li></ul></ul><ul><ul><li>Current account, capital account, balance of trade, balance of payments </li></ul></ul><ul><ul><li>Regulatory questions pretty straight forward </li></ul></ul><ul><ul><li>Blog post: </li></ul></ul>Page 7 of 9 ©
    8. 8. Recommended Study Techniques <ul><li>Same techniques used to pass Series 3 exam </li></ul><ul><li>Read a study guide </li></ul><ul><li>Notecards </li></ul><ul><li>Drill exam prep questions </li></ul><ul><li>Review night before; study notecards before </li></ul>Page 6 of 9 ©
    9. 9. Questions/ Issues to Consider <ul><li>What happens if I don’t pass? </li></ul><ul><li>I have been an AP since May 22, 2008. Do I still have to register? </li></ul><ul><li>Do I need a sponsor to sign up for the Series 3 exam or the Series 34 exam? </li></ul><ul><li>When do I need to take the exam by? </li></ul>Page 8 of 9 ©
    10. 10. Disclaimer <ul><li>This presentation was made for informational purposes only. </li></ul><ul><li>I am not providing legal advice to any user. </li></ul><ul><li>This presentation does not establish an attorney-client relationship between myself and the user. </li></ul><ul><li>Any discussion herein is not a substitute for seeking actual legal advice from a licensed attorney with knowledge of the rules and regulations governing the industry. </li></ul><ul><li>I make no representations, guarantees, or warranties as to the accuracy, completeness, currency, or suitability of the information provided via this presentation. </li></ul><ul><li>This may be considered to be “attorney advertising” in some jurisdictions. </li></ul>© Page 9 of 9
    11. 11. <ul><li>For voice presentation, please see: </li></ul><ul><li> </li></ul><ul><li>Please send questions, comments or suggestions to </li></ul><ul><li>Bart Mallon, Esq. at </li></ul><ul><li>Other helpful websites: </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul>