Series 3

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The National Commodity Futures Examination - Series 3 - exam is a test that is administered by the Financial Industry Regulatory Authority, or the former National Association of Securities Dealers.

The National Futures Association requires that an individual successfully complete the Series 3 exam in order to become qualified to sell commodities or futures contracts. [1]

On the National Commodity Futures Examination – Series 3, the candidate must receive a score of 70 percent on both parts of the exam (market knowledge and regulations) in order to pass.

Background

Individuals who are applying for NFA membership as a sole proprietor FCM, IB, CPO, CTA or for registration as an AP of any of these categories must satisfy proficiency requirements. Unless they are eligible for an existing alternative, they must pass the (NCFE or Series 3) within the two years preceding their application. NFA publishes a study outline ("Study Outlines for the Futures Industry Examinations") to aid individuals in preparing for the futures industry examinations.

The NFA test is administered by the FINRA via PROCTOR, a computer system specifically designed for the administration and delivery of computer-based testing and training and given through local centers worldwide.[2]

Alternatives

Based on the individuals' registration status and the type of business the individuals conduct, they may be eligible for one of the following alternatives to the Series 3 examination:

*Futures Managed Funds Examination Series 31

*Limited Futures Examination - Regulations' Series 32

*Referral of Securities' Clients

Individuals are not required to take an examination if (1) they are registered with FINRA as a General Securities Representative with their sponsor and (2) they are going to limit their futures activities on behalf of their sponsor to referring clients to APs of the sponsor, which referrals are solely incidental to their business as a General Securities Representative, or supervising persons who perform these same limited activities.

*Waivers for CPOs and CTAs Trading Primarily in Securities

Under NFA Registration Rule 402, NFA may waive the examination requirements for certain individuals who are associated with CPOs that are required to register solely because they operate commodity pools principally engaged in securities transactions and/or who are associated with CTAs that are required to register solely because their securities advisory services include advice on the use of futures and options for risk management purposes. The individual or firm requesting the waiver must provide a written description of the facts that qualify the individual for a waiver.

Resources

References

  1. Proficiency Requirements. NFA.
  2. About The Series 3. Institute for Financial Markets.