Series 26

The Series 26 license, formally known as the Investment Company and Variable Contracts Products Principal Qualification Exam, is a credential for professionals who intend to take on supervisory roles within the investment industry.

If you wish to progress in your career to manage or supervise a firm’s investment company and variable contracts business, then you should consider obtaining this license.

In this article, we introduce you to the Series 26 exam as well as cover the necessary steps and requirements on how to obtain and maintain this license.

What is the Series 26 License?

The Series 26 license, also known as the Investment Company and Variable Contracts Products Principal Qualification Exam, is a certification for financial professionals administered by the Financial Industry Regulatory Authority (FINRA).

The Series 26 exam assesses the knowledge, skills, and competencies required to perform the job functions of an investment company and variable contracts products principal. Permitted activities include closed-end funds (initial offering only), mutual funds, variable annuities, and variable life insurance.

Getting a Series 26 license can be a good idea if:

• You aspire to take on a supervisory or managerial role in your firm’s investment company and variable contracts business
• You want to expand your career opportunities. The license can make you more marketable and open up new career paths within the financial industry
• You need to meet regulatory requirements: If you supervise or manage those who sell investment company securities, obtaining the Series 26 license is a regulatory requirement
• You seek professional development: Acquiring the Series 26 license demonstrates a commitment to professional growth and adhering to industry standards
• You wish to enhance your understanding of products. The license provides comprehensive insights into various investment products, helping you to better serve clients and guide representatives under your supervision

The Series 26 license is an important credential for those in the financial industry seeking to advance into managerial positions. It can be an essential asset for those looking to enhance their career, comply with regulatory requirements, and promote a culture of ethical conduct within the firm.

How to Get Your Series 26 License

Before attempting the Series 26 exam, it’s necessary to fulfill the following requirements:

• Have an association and sponsorship with a FINRA member firm or another applicable self-regulatory organization (SRO)
• Pass the Securities Industry Essentials (SIE) Exam
• Pass the Series 6 (Investment Company and Variable Contracts Products Representative Exam)
• Pass the Series 7 (General Securities Representative Exam)
• Have an approved accommodation to schedule an appointment

Once you meet the requirements, you need a proper study plan and preparation. The Series 26 exam tests your competency to supervise sales activities and compliance in investment companies, focusing on management, oversight of sales, product knowledge, and regulatory compliance.

Exam Preparation and Procedure

The Series 26 license (Investment Company and Variable Contracts Products Principal Qualification Exam) is for those who aim to manage or supervise a firm’s investment company and variable contracts business.

The Series 26 exam will test your competencies, which include the following:

• Personnel management activities and registration of the broker-dealer: Understanding the procedures and rules for hiring, training, and supervising representatives and other staff
• Supervises associated persons and oversees sales practices: Knowledge of regulations and best practices for managing the sale of redeemable securities, including mutual funds, variable annuities, and variable life insurance products
• Oversees compliance and business processes of the broker-dealer and its offices: Ability to oversee firm compliance with financial industry rules and regulations, including maintaining accurate records, protecting customer information, and handling complaints

Though the exam may appear intimidating at first, achieving success on your first attempt is completely within reach. Below are some steps that you can take:

• Learn the exam structure: The exam details include 110 multiple-choice questions, with 10 of those being unscored. You must achieve a score of 70% or more to pass and are given 135 minutes to complete the exam
• Use study guides and practice exams: Utilize study materials and practice exams specifically tailored for the Series 26 exam. Simulated exams can help you gauge your readiness and identify areas for improvement
• Create a study schedule: Design a realistic and disciplined study schedule that allocates ample time to cover all sections of the exam. Stick to this schedule and allow time for review and self-assessment

Preparation for the Series 26 exam involves utilizing various resources such as textbooks, online courses, and practice exams. You may choose to enroll in specialized training programs that offer study guides, instructor-led or self-paced video classes, and simulated exams.

Maintaining Your License

Maintaining your Series 26 license requires continuous diligence and commitment to your professional development.

Here are key suggestions to help you stay on top:

• Complete continuing education: FINRA often requires a continuing education (CE) program, which has two required parts: the Regulatory Element, which deals with rules and regulations, and the Firm Element, focusing on individual company policies and procedures
• Monitor regulatory changes: Regularly review the communications from FINRA and other relevant SROs to stay abreast of any changes that might affect your role or responsibilities
• Network with industry professionals: Building and maintaining connections with other Series 26 license holders and industry experts can provide you with insights, advice, and early warnings about emerging trends and challenges
• Adopt a culture of compliance: Emphasize ethical conduct within your team and ensure that policies and procedures align with regulatory standards. Regular internal audits and reviews can help identify areas for improvement and prevent potential issues

By proactively engaging in these activities, you ensure that your license remains in good standing, you have the knowledge required to take on the supervisory role, and you continue to align with the best practices in the industry.