What Is the Series 23 Exam?

The Series 23 exam, formally known as the General Securities Principal – Sales Supervisor Qualification Examination (Series 23), is administered by the Financial Industry Regulatory Authority (FINRA). It serves as an upgrade qualification for individuals who already hold the Series 9/10 license and wish to become fully licensed General Securities Principals. Passing the Series 23 allows individuals to supervise a broader range of securities activities beyond those permitted with a Series 9/10 license alone.

This exam plays a specific role in FINRA’s licensing framework. It is not a standalone qualification, but rather a supplement to the Series 9/10. Individuals must pass the Series 9/10 prior to taking the Series 23, and they must be associated with a FINRA-member firm to qualify.

Purpose and Scope

The Series 23 is designed to assess whether a registered individual is qualified to perform the supervisory functions of a General Securities Principal. These functions include overseeing investment banking, trading, market making, advertising and communications, and general broker-dealer operations. The exam ensures that supervisors understand regulatory standards, FINRA and SEC rules, and supervisory practices.

The scope of the Series 23 exam emphasizes regulatory knowledge, supervision of sales activities, and compliance responsibilities. It closely mirrors the content of the Series 24 exam—the standard General Securities Principal Exam—but is specifically structured for candidates who are already licensed as General Securities Sales Supervisors (Series 9/10 holders).

Exam Structure and Format

The Series 23 consists of 100 scored multiple-choice questions, along with 10 unscored pretest questions that do not count toward the final score. These pretest questions are included to evaluate their effectiveness for future exams but are indistinguishable from the scored questions.

Candidates have 2 hours and 30 minutes to complete the exam. To pass, they must score at least 70%. Like other FINRA exams, the Series 23 is administered through the Prometric testing system at designated test centers or through online proctored exams.

Key Areas of Knowledge

The Series 23 content outline is derived from the responsibilities of a General Securities Principal and includes areas such as:

• Supervision of Investment Banking and Underwriting: This includes understanding the regulatory requirements related to offerings, disclosures, due diligence, and registration of securities.
• Supervision of Trading and Market Making: Candidates must be familiar with rules surrounding market conduct, firm quotes, trade reporting, and order handling.
• Supervision of Customer Accounts: Understanding of account opening procedures, KYC (Know Your Customer) rules, suitability standards, and account documentation requirements is essential.
• Sales Practices and Communications: The exam covers supervision of retail and institutional communications, advertising standards, and compliance with Regulation Best Interest (Reg BI).
• Broker-Dealer Operations and Financial Responsibility: Topics include net capital rules, reserve requirements, books and records, and anti-money laundering compliance.

This comprehensive scope ensures that candidates are equipped to handle supervisory roles across a wide range of broker-dealer functions.

Prerequisites and Eligibility

Only individuals who are currently registered with a FINRA-member firm and who have already passed the Series 9 and Series 10 exams are eligible to take the Series 23. The Series 23 functions as an alternative to the Series 24, which is a broader and more general principal-level exam.

Unlike the Series 24, the Series 23 is not open to individuals without prior supervisory licensing. It is specifically tailored for those upgrading from a more limited supervisory capacity.

Registration and Enrollment

To take the Series 23, a sponsoring firm must file a Form U4 (Uniform Application for Securities Industry Registration or Transfer) on behalf of the candidate. There is an associated exam fee, and candidates must schedule their exam through the appropriate testing platform once their enrollment is confirmed.

Candidates who do not pass on the first attempt must wait 30 days before retaking the exam. After three failed attempts, a 180-day waiting period applies for each subsequent attempt.

Career Implications

Passing the Series 23 expands a candidate’s authority to include the full range of General Securities Principal responsibilities. This includes managing the compliance and regulatory oversight of a broader set of functions within a broker-dealer, including departments not covered under the Series 9/10. For example, a Series 23 holder can supervise underwriting, proprietary trading desks, or firm-wide operations—areas that are outside the scope of a General Securities Sales Supervisor.

The Series 23 is commonly pursued by those seeking senior supervisory or compliance roles within broker-dealer firms. It is relevant for roles such as Branch Manager, Compliance Officer, Operations Principal, and Director of Supervision.

Regulatory Context

The Series 23 exam is rooted in FINRA Rule 1220, which governs registration requirements for principals and representatives. The rule identifies the categories of principal registration and outlines which exams qualify an individual for those categories. The Series 23 provides a path for those already qualified as Sales Supervisors (Series 9/10) to meet the requirements of a General Securities Principal without retaking a full principal exam from the beginning.

The exam content is aligned with SEC regulations, FINRA rules, MSRB regulations (if applicable), and relevant sections of federal securities laws. This alignment ensures that principals are capable of enforcing compliance with the regulatory structure that governs U.S. securities markets.

The Bottom Line

The Series 23 exam is a focused regulatory qualification designed to bridge the gap between limited and full supervisory authority in a broker-dealer environment. It enables Series 9/10 holders to upgrade their licensing and assume broader oversight responsibilities. The exam assesses competency in key areas such as investment banking, trading, customer account management, and compliance. For professionals aiming to expand their supervisory capabilities within the securities industry, the Series 23 represents a targeted path to becoming a General Securities Principal.