What Is the Series 53 Exam and License?

The Series 53 exam is a licensing test for professionals who want to supervise municipal securities activities at a broker-dealer. Offered by FINRA, it’s typically taken after earning both the Series 7 and Series 52 licenses. Once you pass, you can oversee areas like municipal bond underwriting, trading and sales, as well as manage compliance responsibilities tied to those activities.

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What Is the Series 53?

The Series 53 is the Municipal Securities Principal Qualification Exam, designed to test whether a candidate can supervise municipal securities activities in line with industry rules. The exam content is based on regulations set by the Municipal Securities Rulemaking Board (MSRB), which writes and updates the rules governing municipal securities dealers and advisors. As those rules evolve, the exam is periodically revised to reflect current standards.

While the MSRB develops the rules and exam content outline, the Financial Industry Regulatory Authority (FINRA) administers the test and handles licensing. In practice, this means candidates register for and take the exam through FINRA, even though the subject matter is rooted in MSRB regulations.

Series 53 Exam Overview

The Series 53 test is a 100-question, multiple-choice exam. Test-takers get 3 hours and 30 minutes to take it. A passing score requires answering 70% of all questions correctly. ¹

The questions are distributed among six primary topics in this manner: ²

• Federal regulations: 4%
• General supervision: 23%
• Sales supervision: 25%
• Origination and syndication: 23%
• Trading: 10%
• Operations: 15%

To schedule the exam, test-takers must be sponsored by a FINRA firm. The test costs $265.

Certification Requirements

In addition to being sponsored by a FINRA firm, Series 53 candidates also must pass the Securities Industry Essentials (SIE) and Series 52 exams.

The Series 52 exam and license are also overseen by the MSRB. This license is required to qualify as a municipal securities representative. This license qualifies individuals to underwrite and trade municipal securities.

The SIE exam and license are overseen by FINRA. This test assesses basic knowledge about securities products, risks, industry structure and function, regulatory agencies and prohibited practices.

Studying for the Series 53

The MSRB doesn’t require any pre-licensing education for Series 53. However, it provides an outline of the course content with headers briefly describing subjects students need to know in order to pass the test.

The 19-page content content outline divides the exam into topic areas. Topics include federal regulations, general supervision, sales supervision, origination and syndication, trading and operations. Rather than providing detailed instruction, it refers candidates to various online resources.

These include websites from the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, FINRA, the MSRB and the Securities and Exchange Commission.

A number of private companies also provide Series 53 exam study materials and courses. Study guides and course materials range from approximately $250 to $400, depending on features and provider.

Students should spend four to six weeks studying for the test. However, this includes two to three weeks of reading the material and two to three weeks of practicing with the sample questions.

Who Gets a Series 53 License?

A municipal securities principal may manage and oversee underwriting, trading, buying and selling municipal securities. A principal may also provide financial advice to entities that issue municipal securities. These principals are responsible for overseeing the municipal securities activities of a securities firm or bank dealer.

Series 53 license holders are likely to oversee communications with customers about and maintain records of these activities. Subsequently, they could supervise the processing clearing and safekeeping of municipal securities. Finally, they may be responsible for the training principals or representatives at municipal securities brokers.

Similar Certifications

The MSRB oversees some other licensing exams in the municipal securities field. The first, Series 52, is a prerequisite for taking the Series 53 exam.

The Series 51 Municipal Securities Limited Principal exam is another MSRB test. If you want to supervise activities related to municipal fund securities, such as 529 plans, you must have a Series 51.

The Series 7 license is a FINRA credential that allows representatives to buy and sell a wide range of securities, including municipal securities, for brokerage clients.

A Series 6 is another FINRA license for investment professionals who sell mutual funds, variable annuities and insurance. However, this license also authorizes the selling and purchasing of municipal fund securities.

Bottom Line

You must have a Series 53 before you can oversee the municipal securities activities of a brokerage or other financial institution. But earning one requires passing the Series 53 exam that tests knowledge about supervising the underwriting, trading, buying and selling of municipal securities.

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