What Is the Series 3?

The Series 3 exam is a licensing exam offered by the Financial Industry Regulatory Authority (FINRA) to qualify commodities and futures brokers. It is a comprehensive exam covering all aspects of commodities and futures trading including hedging and futures theory, as well as the legal requirements and regulations surrounding the industry. All of the brokers working the commodities and futures exchanges in New York and Chicago have taken and passed the Series 3 exam.

FINRA

• FINRA is a congressionally mandated, self-regulatory organization of securities firms. FINRA regulates almost all aspects of the securities industry on some level. One of its primary responsibilities is broker education and licensing and FINRA offers several dozen different licensing exams to qualify brokers to work in specific areas of the securities industry.

Series 3 Exam

• FINRA's Series 3 exam (the National Commodity Futures Examination) must be passed by commodities and futures brokers so they can register to work with the National Futures Association. Series 3 is a 120-question, multiple-choice exam focusing on commodities and futures trading. It includes sections on hedging and futures theory, leverage, regulations and compliance, and confidentiality and ethics.

Preparation for the Series 3 Exam

• You can prepare for the Series 3 exam in a number of ways. Sometimes, general securities brokers or research analysts who are already working in the field decide to move into commodities and futures, and they might take a more-junior position in that department to learn the ropes. There are also a number of academic institutions, both physical and online, that offer FINRA series exam prep classes. And the National Futures Association does offer an official study guide.

Commodities and Futures Broker

• A commodity and futures broker's job involves acting as the middleman for investors in the commodity futures markets. The broker's job is to solicit and accept orders from businesses and individuals for futures and options contracts on the various commodities exchanges to facilitate trading. Commodities brokers often specialize in one commodity, like gold, wheat or sugar.

Other FINRA Exams

• FINRA offers more than 60 exams to licensed professionals in the securities industry. For example, Series 7 is the General Securities Representative exam taken by most brokers just entering the industry, and the Municipal Securities Representative exam (Series 52) is for those wanting to work with municipal bonds as a bond dealer. Research Analyst exams (Series 86 and 87) are for those desiring to work as research analysts in the securities industry.