What is the Series 52 Exam and License?

series 52

A Series 52 certification lets professionals trade municipal securities. Also known as the Municipal Securities Representative Qualification Examination, it’s one of the first steps toward a career as a licensed municipal securities representative. Here’s what the Series 52 covers and what its exam entails.

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What Is the Series 52 Qualification?

The Series 52 qualification is designed for professionals who work with municipal securities. It allows individuals to underwrite, trade and sell municipal securities, including municipal bonds, on behalf of a sponsoring firm.

Individuals who pass the Series 52 exam become Municipal Securities Representatives. In this role, they can participate in underwriting activities, execute transactions and provide information and guidance related to municipal securities. They often work with public investors, institutions and issuers involved in municipal financing.

The Series 52 exam is based on standards set by the Municipal Securities Rulemaking Board (MSRB), which regulates the municipal securities market. However, the exam itself is administered by the Financial Industry Regulatory Authority (FINRA), which also oversees the registration process for securities professionals.

Following FINRA’s exam restructuring in 2018, candidates must also pass the Securities Industry Essentials (SIE) exam to obtain the Series 52 qualification. The SIE is a co-requisite exam that can be taken before or after the Series 52 exam.

Series 52 Exam

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The 2 ½-hour exam consists of 75 scored multiple choice questions. In order to pass, you must receive a score of 70% or better. It costs $260 to take the exam. However, taking the Series 52 exam requires employment and sponsorship from a municipal firm. You can find the content outline on the MSRB website and use it to help guide your study.

There are three parts to this exam:

Part One: Municipal Securities

This part of the exam covers issuing and trading municipal securities, types of municipal securities and their characteristics, and other relevant information like analysis and disclosure requirements.

Part Two: Economic Activity, Government Policy and the Behavior of Interest Rates

This section of the exam will test your knowledge of factors that affect interest rates, United States monetary policy, and U.S. fiscal policy. For example, the United States monetary policy includes economic indices, commodity prices, and international economic activity. Meanwhile, U.S. fiscal policy includes U.S. Treasury debt management practices, and federal budgetary practices and their impact.

Part Three: Securities, Laws and Regulations

For the third part of the exam, you’ll need to know the MSRB rules and be well-versed in regulations that apply to Municipal Market Professionals. That includes the Securities Act of 1933 and the Securities Exchange Act of 1934.

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Series 52 Exam vs. the Securities Industry Essentials (SIE) Exam

Becoming a Municipal Securities Representative now requires passing the Series 52 exam as well as the SIE exam.

The introductory-level SIE exam targets prospective securities industry professionals. Therefore, it tests knowledge of basic securities industry information and concepts fundamental to working in the industry. The test covers a variety of topics including the structure of the securities industry markets, regulatory agencies and their functions, types of products and their risks, and prohibited practices.

It is a 75-question multiple-choice exam. The passing score, like the Series 52 passing score, is 70%. It costs $60 to take and lasts one hour and 45 minutes. You can study using the FINRA content outline, available on their website.

The SIE exam also consists of four sections:

Knowledge of Capital Markets
Understanding Products and Their Risks
Understanding Trading, Customer Accounts and Prohibited Activities
Overview of Regulatory Framework

Anyone over 18 can take this exam. Unlike the Series 52 exam, prospective candidates can take the SIE exam without joining a firm. As a result, it gives people the option to take the exam before or after associating with a firm. SIE results are valid for four years.

Series 52 vs. Series 53 vs. Series 7

While the Series 52 focuses specifically on municipal securities, the Series 53 and Series 7 serve different roles within the industry. The Series 53 is a supervisory qualification. It’s designed for professionals who oversee municipal securities activities, including compliance, trading and underwriting. In most cases, you must first hold the Series 52 before pursuing the Series 53.

The Series 7, by contrast, is a broader general securities qualification. It allows representatives to trade a wide range of products, including corporate securities, options and investment company products, but it does not specialize in municipal securities the way the Series 52 does.

In practice, the Series 52 is more specialized, the Series 53 is managerial and the Series 7 is more generalist. The right path depends on whether you plan to focus on municipal markets, supervise those activities or work across a broader range of securities.

Bottom Line

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Potential municipal securities representatives who are still looking for work can take the SIE exam. They’ll still need employment and sponsorship from a municipal firm before they can take the Series 52 exam. However, you can take the first step towards that qualification on your own. Showing that you have the initiative to take the SIE exam and the skills to pass it may help you in your career and your job search.

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