You are on page 1of 11

For an audio version of this presentation, please go to

www.series34exam.com

Series 34 Exam
Retail Off-Exchange Forex Examination

By Bart Mallon, Esq.


www.series34exam.com
Overview

• Background – Forex Registration


• Series 34 Basics
• Sections and Weighting
• Major Exam Topics
• Recommended Study Techniques
• My Thoughts on the Exam
• Questions
• Disclaimer

© www.series34exam.com Page 1 of 9
Background - Forex Registration
• Commodities Exchange Act
– Regulation of commodities and futures trading
– No previous regulation of Forex activities (except limited anti-
fraud authority)

• Farm Bill
– Passed by Congress on May 22, 2008
– Major items with regard to off-exchange forex
• Codifies CFTC’s anti-fraud authority
• Requires registration for Forex CTAs, CPOs, IBs
• Minimum capital requirements for FCMs and FDMs

• New Forex Regulations


– To be proposed by CFTC
– Subject to comment period

© www.series34exam.com Page 2 of 9
Series 34 Exam Basics
• Who?
– Principals and Associated Persons of a Forex CTA, Forex CPO, or Forex Introducing
Broker

• What?
– Number of Questions: 40 True/False and Multiple Choice
– Time: 1 hour
– Passing Score: 70%
– Subject Matter: Retail Off-Exchange Forex
– Cost: $70

• When?
– Tests can be scheduled anytime

• Where?
– Pearson and Prometric Testing Facilities

• How?
– Submit online Form U-10 through FINRA website (no sponsor is needed)
– Select exam time on Pearson or Prometric website

• Why ?
– 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.

© www.series34exam.com Page 3 of 9
Sections and Weighting

© www.series34exam.com Page 4 of 9
Major Exam Topics
• Definitions and Terminology  • Forex Market - Concepts,
(10 questions) Theories, Economic Factors
– American/European Terms and Indicators, Participants
– Currency pair, exchange rate, (10 questions)
currency crosses, cross rates – BOP, BOT, current account,
– Interest rate parity capital account
– Forex clearing – CHIPS,
fedwire
• Forex Trading Calculations (8
– Central bank activities –
questions)
interventions, sterilized
– Profit and loss calculations**
interventions, discount rates
– Cross rate transactions – Elasticity of exchange rates
– Pip values – Fisher effect, international
– Effects of leverage Fisher effect
calculations – Purchasing power parity

• Risks Associated with Forex • Forex Regulatory


Trading (4 questions) Requirements  (8 questions)
– Credit Risk – NFA Interpretive notices:
– Country Risk Forex Transactions, Rule 2-
– Exchange Rate Risk 36(e)
– Interest Rate Risk – Know your customer
© www.series34exam.com – 9Promotional material
Page 5 of
My Thoughts on the Exam
• My scores
– Definitions and Terminology 7 of 10 (70%)
– Forex Trading Calculations 6 of 8 (75%)
– Risks Associated with Forex Trading 3 of 4 (75%)
– Forex Market - Concepts, Theories, Economic Factors and Indicators, Participants 6 of 10
(60%)
– Forex Regulatory Requirements 8 of 8 (100%)
– Total Correct – 30 of 40
– Time to complete the exam – approximately 42 minutes

• Calculation heavy
– Be prepared to use the calculator on the exam (approx. 5 questions)
– Don’t spend too much time on any one question

• Note on Pacing

• Other
– Shorting currency pairs
– Current account, capital account, balance of trade, balance of payments
– Regulatory questions pretty straight forward
– Blog post: http://www.hedgefundlawblog.com/passing-the-series-34-exam.html

© www.series34exam.com Page 7 of 9
Recommended Study Techniques
• Same techniques used to pass Series 3 exam

• Read a study guide

• Notecards

• Drill exam prep questions

• Review night before; study notecards before

© www.series34exam.com Page 6 of 9
Questions/ Issues to Consider

• What happens if I don’t pass?

• I have been an AP since May 22,


2008. Do I still have to register?

• Do I need a sponsor to sign up for


the Series 3 exam or the Series 34
exam?

• When do I need to
Pagetake
© www.series34exam.com 8 of 9 the exam by?
Disclaimer
• This presentation was made for informational purposes
only.

• I am not providing legal advice to any user.

• This presentation does not establish an attorney-client


relationship between myself and the user.

• 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.

• I make no representations, guarantees, or warranties as to


the accuracy, completeness, currency, or suitability of the
information provided via this presentation.

• This may be considered to be “attorney advertising” in


some jurisdictions.

© www.series34exam.com Page 9 of 9
For voice presentation, please see:

www.series34exam.com

Please send questions, comments or suggestions to


Bart Mallon, Esq. at bartmallon@gmail.com

Other helpful websites:


www.forexregistration.com
www.hedgefundlawblog.com
www.forexlawblog.com