FINRA Series 24 Course Notes

Know which filing or registration action the principal must supervise, then verify the record is accurate and timely. Function 1 is small but highly testable: Forms BD/BDW/BR, Form U4/U5, CRD, prehire investigation, statutory disqualification, registration categories, continuing education, and heightened supervision are the recurring decision points.

• Confusing Form BD with Form BDW.

• Ask first: entity, office, or individual?

Function 2 is the largest Series 24 domain. Think like a principal: establish a reasonable supervisory system, assign responsibility, test it, document the review, correct deficiencies, escalate misconduct, and protect the firm's financial and customer-asset position. The highest-yield anchors are Rules 3110, 3120, 3130, 3220, 4511/4513/4530, financial-responsibility controls, and current-rule updates.

• Calling Rule 4511 a supervision rule; it is a books-and-records rule.

• For supervision questions, think: reasonable system + responsible principal + evidence + testing + correction.

Function 3 is customer-facing supervision: open and maintain accounts correctly, apply AML/CIP/privacy controls, classify communications before approving them, and review recommendations and activity under KYC, Regulation Best Interest, suitability where applicable, disclosure, pricing, discretionary-account, and margin rules. Most questions are scenario-based and turn on customer type, communication category, red flags, or required principal action.

• Saying CIP applies only to 'high-risk' customers.

• Account question: identity → authority → AML/CIP → documentation → ongoing monitoring.

Function 4 follows the trade lifecycle: order handling and routing, execution and market conduct, booking/confirmation, settlement and fails, then regulatory trade reporting. Know best execution, customer-order protection, Regulation NMS, Regulation SHO, market-manipulation/front-running risks, T+1 settlement, and how to choose the correct reporting facility and data.

• Equating best execution with the single lowest quoted price.

• Run the trade in order: handle → execute → confirm → settle → report.

Function 5 tests the principal across the offering and research lifecycle: public/private offerings, underwriting terms, conflicts, allocations, due diligence, M&A/advisory activity, issuer communications and prospectus/free-writing-prospectus rules, information barriers, and research-objectivity controls. The exam favors documented due diligence, accurate classification of communications, conflict management, and separation of research from investment-banking pressure.

• Treating all issuer communications as the same type of prospectus.

• Start with transaction type, then identify the rule family.