MSRB Clarifies Exam Requirements for Municipal Advisors
The MSRB provided guidance on the professional qualification examination requirements for municipal advisor representatives (Series 50) and principals (Series 54).
In FAQs on the Municipal Advisor Representative Qualification Examination (Series 50), the MSRB answered the following questions:
- Who is required to take the exam? Under MSRB Rule G-3, any person associated with a municipal advisor who engages in municipal advisory activities is required to pass the Series 50 exam. The guidance specified that individuals with other professional designations or qualifications were not exempt.
- Could individuals work while studying? The MSRB stated that individuals could not engage in municipal advisory activities before passing the Series 50 exam.
- What about sole proprietors? An individual starting a new municipal advisor firm as a sole proprietor is instructed to pass the Series 50 exam before registering the firm with the SEC and MSRB.
- What are the main exam details? The exam costs $265, consisted of 110 questions (100 scored), has a time limit of 180 minutes, and requires a passing score of 71%. The MSRB noted the exam was not customized for specialized business areas but tested baseline competency.
- What happens if someone fails the exam? An individual who fails the exam has to wait 30 days before retaking it. If an individual fails three times in a row, they are required to wait 180 days before their next attempt.
- How long is the qualification valid? A Series 50 qualification lapses if an individual is not associated with a municipal advisor for two years. However, the rules provide a one-time exemption allowing for requalification without re-examination for up to three years after association ceased.
- Is continuing education required? Yes. Firms are required to conduct an annual needs analysis and provide training to their municipal advisor representatives.
In FAQs on the Municipal Advisor Principal Qualification Examination (Series 54), the MSRB answered the following questions:
- Who is required to take the exam? Any person engaged in the management, direction, or supervision of a municipal advisor's activities is required to pass both the Series 50 and Series 54 exams to qualify as a municipal advisor principal. The rules allow a qualified representative to function as a principal for up to 120 days without having passed the Series 54 exam.
- Do sole proprietors need to take the exam? Yes. A sole proprietor, acting as both a representative and a principal, is required to pass the Series 54 exam.
- What are the main exam details? The Series 54 exam cost $265, has 110 questions (100 scored), a 180-minute time limit, and a passing score of 70%. MSRB said it is designed to test broad knowledge of regulatory requirements.
- What happens if someone fails the exam? The waiting periods for retaking the Series 54 are the same as for the Series 50: a 30-day wait after a failed attempt, and a 180-day wait after three successive failures.
- How long is the qualification valid? A principal's qualification lapses after two years of not being associated with a municipal advisor firm. The guidance explicitly stated there is no exemption from retaking and repassing the Series 54 exam after a qualification lapses.
- Is continuing education required? Yes. Municipal advisor principals are included in the firm's annual continuing education requirements.