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Series 34 Exam
Retail Off-Exchange Forex Examination

By Bart Mallon, Esq.

www.series34exam.com
 Overview

• Background – Forex Registration

• Series 34 Basics
• Sections and Weighting
• Major Exam Topics
• Recommended Study Techniques
• My Thoughts on the Exam
• Questions
• Disclaimer

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 Background - Forex Registration
• Commodities Exchange Act
– Regulation of commodities and futures trading
– No previous regulation of Forex activities (except limited anti-
fraud authority)

• Farm Bill
– Passed by Congress on May 22, 2008
– Major items with regard to off-exchange forex
• Codifies CFTC’s anti-fraud authority
• Requires registration for Forex CTAs, CPOs, IBs
• Minimum capital requirements for FCMs and FDMs

• New Forex Regulations

– To be proposed by CFTC
– Subject to comment period

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 Series 34 Exam Basics
• Who?
– Principals and Associated Persons of a Forex CTA, Forex CPO, or Forex Introducing
Broker

• What?
– Number of Questions: 40 True/False and Multiple Choice
– Time: 1 hour
– Passing Score: 70%
– Subject Matter: Retail Off-Exchange Forex
– Cost: $70

• When?
– Tests can be scheduled anytime

• Where?
– Pearson and Prometric Testing Facilities

• How?
– Submit online Form U-10 through FINRA website (no sponsor is needed)
– Select exam time on Pearson or Prometric website

• Why ?
– The CFTC is likely going to require forex managers to pass a proficiency exam. The NFA
has designated the Series 34 as that proficiency exam.

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 Sections and Weighting

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 Major Exam Topics
• Definitions and Terminology  •
(10 questions)
– American/European Terms
– Currency pair, exchange rate,
currency crosses, cross rates
– Interest rate parity
• Forex Trading Calculations (8
questions)
– Profit and loss calculations**
– Cross rate transactions
– Pip values
– Effects of leverage
calculations
• Risks Associated with Forex
Trading (4 questions)
– Credit Risk
– Country Risk
– Exchange Rate Risk
– Interest Rate Risk
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Page 5 of
Forex Market - Concepts,
Theories, Economic Factors
and Indicators, Participants
(10 questions)
– BOP, BOT, current account,
capital account
– Forex clearing – CHIPS,
fedwire
– Central bank activities –
interventions, sterilized
interventions, discount rates
– Elasticity of exchange rates
– Fisher effect, international
Fisher effect
– Purchasing power parity
• Forex Regulatory
Requirements  (8 questions)
– NFA Interpretive notices:
Forex Transactions, Rule 2-
36(e)
– Know your customer
– 9Promotional material
 My Thoughts on the Exam
• My scores
– Definitions and Terminology 7 of 10 (70%)
– Forex Trading Calculations 6 of 8 (75%)
– Risks Associated with Forex Trading 3 of 4 (75%)
– Forex Market - Concepts, Theories, Economic Factors and Indicators, Participants 6 of 10
(60%)
– Forex Regulatory Requirements 8 of 8 (100%)
– Total Correct – 30 of 40
– Time to complete the exam – approximately 42 minutes

• Calculation heavy
– Be prepared to use the calculator on the exam (approx. 5 questions)
– Don’t spend too much time on any one question

• Note on Pacing

• Other
– Shorting currency pairs
– Current account, capital account, balance of trade, balance of payments
– Regulatory questions pretty straight forward
– Blog post: http://www.hedgefundlawblog.com/passing-the-series-34-exam.html

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 Recommended Study Techniques
• Same techniques used to pass Series 3 exam

• Read a study guide

• Notecards

• Drill exam prep questions

• Review night before; study notecards before

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 Questions/ Issues to Consider

• What happens if I don’t pass?

• I have been an AP since May 22,

2008. Do I still have to register?

• Do I need a sponsor to sign up for

the Series 3 exam or the Series 34
exam?

• When do I need to
Pagetake
© www.series34exam.com 8 of 9 the exam by?
 Disclaimer
• This presentation was made for informational purposes
only.

• I am not providing legal advice to any user.

• This presentation does not establish an attorney-client

relationship between myself and the user.

• Any discussion herein is not a substitute for seeking actual

legal advice from a licensed attorney with knowledge of
the rules and regulations governing the industry.

• I make no representations, guarantees, or warranties as to

the accuracy, completeness, currency, or suitability of the
information provided via this presentation.

• This may be considered to be “attorney advertising” in

some jurisdictions.

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 For voice presentation, please see:

www.series34exam.com

Please send questions, comments or suggestions to

Bart Mallon, Esq. at bartmallon@gmail.com

Other helpful websites:

www.forexregistration.com
www.hedgefundlawblog.com
www.forexlawblog.com