What Is a Series 34 Exam and License
The Series 34 is an exam and license required for individuals seeking to engage in off-exchange forex transactions with retail customers. **Section D**: Forex Market - Concepts, Theories, Economic Factors and Indicators, Participants: Balance of payments; Balance of trade; Bank for International Settlements (BIS); Capital account and current account; Central bank activities, intervention, sterilized intervention; Clearing House Interbank Payment System (CHIPS); Discount rate; Economic indicators: employment, consumer spending, income, industrial and inflation indicators; Elasticity of exchange rates; Exchange rate intervention; Exchange rate volatility; Federal Reserve Board, Fedwire; Fiscal policy; Fisher effect; Foreign investment indicators; Gross national product, gross domestic product; Inflation; Interbank funds transfer and settlement systems; International Fisher effect; International Monetary Fund; Portfolio balance; Role of central banks; Theory of elasticities; Theory of purchasing power parity and the World Trade Organization. **Section E**: Forex Regulatory Requirements - CFTC Regulations, including: Close out of offsetting positions, Disclosure of profitable vs. non-profitable accounts, Prohibition of guarantees against loss, Registration requirements, Re-quoting, Security deposits, Specific authorization for trades; CFTC jurisdiction and jurisdictional limitations; Conflicts of interest; Disclosures to customers; Jurisdictional & regulatory framework; Know your customer; NFA Interpretive Notices, including: The Allocation of Bunched Retail Forex Orders for Multiple Accounts, Forex Transactions, Requirements for Forex Transactions, Supervision of the Use of Electronic Trading Systems, Prohibition on the Use of Certain Electronic Funding Mechanisms (Effective January 31, 2015); NFA membership and associate membership requirements; Promotional material & solicitation; Reports to customers, confirmations, monthly summaries; Security deposit rules; Security of customer funds, no segregation. security deposit, margin; Cross rates, crosses and pairs; Direct and indirect quotes; Exchange rate; Forward Points; Forward rate/bid forward rate; Interest rate differential and parity; Mark-up and mark-downs; PIPs; Rollovers; Spot rate/price; Trade/Settlement date; Swaps. According to the NFA, obtaining Series 34 certification is required of anyone seeking approval as a forex firm or forex individual before engaging in off-exchange retail forex unless they have already passed the Series 3 (National Commodities Futures Examination) or the Series 32 (Limited Futures Examination-Regulations) exams.
Breaking Down Series 34
The Series 34 Exam, also known as the Retail Off-Exchange Forex Examination, is a National Futures Association (NFA) exam administered by the Financial Industry Regulatory Authority (FINRA). Upon passing the exam, an individual is known as a 'forex AP,' or 'forex Associated Person.'
According to the NFA, obtaining Series 34 certification is required of anyone seeking approval as a forex firm or forex individual before engaging in off-exchange retail forex unless they have already passed the Series 3 (National Commodities Futures Examination) or the Series 32 (Limited Futures Examination-Regulations) exams. They also must have passed the Series 34 within the previous two years or have been continuously registered with an NFA member firm after passing the Series 34 without a registration lag of more than two years.
Series 34 Exam Content
The Series 34 Exam consists of 40 multiple-choice questions. Candidates have 60 minutes to complete it. To pass the exam, the applicant must get at least 28 questions correct to achieve a passing score of 70%.
The following represents a sample list of major subject areas covered by the Series 34 Exam, though it is not exhaustive (For more, see the NFA's Retail Off-Exchange Forex Examination Content Outline):
Related terms:
Authorized Forex Dealer
An authorized forex dealer is a regulated financial institution that facilitates transactions in the foreign exchange market. read more
Dealer
A dealer is a person or firm who buys and sells securities for their own account, whether through a broker or otherwise. read more
Financial Intermediary
A financial intermediary facilitates transactions between lenders and borrowers, with the most common example being the commercial bank. read more
Financial Industry Regulatory Authority (FINRA)
The Financial Industry Regulatory Authority (FINRA) is a nongovernmental organization that writes and enforces rules for brokers and broker-dealers. read more
Foreign Exchange Dealers Coalition (FXDC) Defintion
The Foreign Exchange Dealers Coalition (FXDC) was an alliance composed of the largest U.S. foreign exchange dealers. read more
Forex (FX) , Uses, & Examples
Forex (FX) is the market for trading international currencies. The name is a portmanteau of the words foreign and exchange. read more
NFA Compliance Rule 2-43b
NFA Compliance Rule 2-43b, implemented in 2009 by the NFA, states that RFEDs cannot allow clients to hedge and must offset positions on a FIFO basis. read more
National Futures Association (NFA)
National Futures Association (NFA) is an independent, self-regulated entity for the U.S. derivatives industry that mandates industry best practices. read more
Retail Foreign Exchange Dealer (RFED)
A retail foreign exchange dealer (RFED) acts as the counterparty to an off-exchange, over-the-counter foreign currency transaction. read more