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Becoming A Commodities Broker? Series 3 License

  • #1
  • First Post: Mar 23, 2009 1:37am Mar 23, 2009 1:37am
Hey there..

I am interested in taking my series 3 exam with intentions on becoming a certified commodities/Futures Broker. I wanted to know if anyone else has already taken the test or is working in the field. I am interested in hearing your thoughts about how difficult the testing is, how you prepared for the test, and what you are using your license for currently...
Things can get Real ugly, Real quick!!!
  • #2
  • Mar 23, 2009 2:37am Mar 23, 2009 2:37am
I have completed my series 3. It isn't a hard test but most of it doesn't really apply to forex. I recommend stcusa.com for your manual and cd. I wouldn't take the online courses because the book and cd do a great job of prepping you for the test.

Depending on your background and how much effort you put into it, you can expect to be ready for the test in about 4 weeks. The CD from stcusa has practice tests on it that do a really good job of preparing you for the test.

The test is broken into 2 parts, regulations and basically everything else (word problems, etc). Fail any part and you fail the entire thing. Even if you get a 100 on the regs and you get a 60 on the rest, you fail the test.

normally you have to have a company sponsor you to take the test but if you tell them on the phone that you are pursuing this on your own without working for a company you can take the test. Most won't tell you that but it is how I took the test.

I currently manage 5 accounts for clients and my business partner and I are in the process of setting up a CPO (commodity pool operator) to allow us to operate a fund geared towards forex. We expect to have everything in place in about 45 days.
  • #3
  • Mar 23, 2009 3:10am Mar 23, 2009 3:10am
Dear Magnum.. Thanks for your helpful insight and good luck with your new venture.. I will be looking into the book and cd you had recommended. I wonder if there is any other certification that is needed that deal specifically with the forex markets? I thought I had recalled someone stating that the nfa was going to have a special license for spot forex??
Things can get Real ugly, Real quick!!!
  • #4
  • Mar 23, 2009 3:31am Mar 23, 2009 3:31am
I believe the license im talking about is referred to as a series 34 retail forex off exchange license.
Things can get Real ugly, Real quick!!!
  • #5
  • Mar 23, 2009 10:37am Mar 23, 2009 10:37am
yeah, the series 34 is a variation/offshoot of the series 3. it covers most of the topics in the series 3, but applies them to forex, with some other forex only related stuff in there.

the series 3 is good to have if you want to be a CTA/CPO and trade managed accounts or start a fund or whatever. i'm not sure because i havent looked to much into the series 34, but i think you can trade forex accounts if you have it, but you wont be able to trade any other futures or commodities.

basically, series 3 is the big overall test, while the series 34 is a specific, specialized test. i would say go with the 3 because you can do more with it and then if you want to later, go with the 34. you can take both tests.


edit: and by the way, the series 3 isn't a hard test. I studied super hard for about a month and a half because i expected it to be super hard, seeing as a bunch of the guys i worked with didnt pass. when i took the test, i finished it in half the time with an overall 85%. just study for a month or two and you should be good to go.
  • #6
  • Mar 23, 2009 12:26pm Mar 23, 2009 12:26pm
The series 3 is really not too bad at all - by far the easiest of any of the series tests that I have taken. If I remember, much of it concerns applications for hedging, and is pretty much formulaic math that you can learn without too much prep time.

The series 34 is the new forex specific series test. As you likely already know, forex money managers are going to finally be regulated by the NFA/CFTA (likely to take place within the next 12 months, although the CFTA is still being somewhat cagey about the specific dates). For those that passed their series 3 and registered with these orgnizations before June 08 (don't quote me on this) you don't need to take the 34 once the changes take place, as you would be under the grandfathering provision. If, however, you aren't registered before last June, you will need to take both the series 3 and the series 34 if are you wish to form a forex cta, or trade in forex as a broker.

I hope this helps.

Chris
  • #7
  • Mar 25, 2009 1:23am Mar 25, 2009 1:23am
Gentleman. Thank you very much for all of your helpful insight. I will be ordering my books and cd's today... Im going to go ahead and study for the 3 first, then I will tackle the 34. I will let you know how it goes!

Thanks again!
Things can get Real ugly, Real quick!!!
  • #8
  • May 13, 2009 10:40pm May 13, 2009 10:40pm
Any thoughts, comments regarding:

A foreigner (Canadian) reffering clients and managing clients money through a US forex broker would need/benefit from passing the series 3 & 34 examinations ?
Might it help in the future with the possibility of increased future regulation by the NFA ?


Thanks
  • #9
  • May 14, 2009 10:41am May 14, 2009 10:41am
It depends, many forex brokers are now requiring their reps to have the series 3 designation. As I have discussed on this site and elsewhere, the new forex regulations have not been put into place yet. When they do it is likely that a person in your position would need to have both the series 3 and the series 34.

I just recently took the series 34 and I was able to pass. I have had many people contact me, however, who did not pass the exam because they were not ready for all of the calculations on the exam - this is going to be the most difficult part of the exam.
  • #10
  • May 14, 2009 10:42am May 14, 2009 10:42am
Quoting Student
Any thoughts, comments regarding:

A foreigner (Canadian) reffering clients and managing clients money through a US forex broker would need/benefit from passing the series 3 & 34 examinations ?
Might it help in the future with the possibility of increased future regulation by the NFA ?


Thanks

i don't know if it would help, but it definitely wouldn't hurt. i'm not sure someone fromanother country needs the series 3 to use a US broker asd long as the broker is regulated by the nfa. i would say get it though. i learned a lot from taking the test, stuff that i can use every day. i say go for it dude.
  • #11
  • May 14, 2009 8:19pm May 14, 2009 8:19pm
Quoting Forex Lawyer
It depends, many forex brokers are now requiring their reps to have the series 3 designation. As I have discussed on this site and elsewhere, the new forex regulations have not been put into place yet. When they do it is likely that a person in your position would need to have both the series 3 and the series 34.

I just recently took the series 34 and I was able to pass. I have had many people contact me, however, who did not pass the exam because they were not ready for all of the calculations on the exam - this is going to be the most difficult...
I have only seen the outline of what the series 34 entails.... but from what calculations are required, it doesnt seem too bad. I do like numbers.

How much study time would it take to be prepared for the course ?

Thanks
  • #12
  • Oct 28, 2009 1:30pm Oct 28, 2009 1:30pm
I also am interested in getting my series 3 license and have been offered a job by a commodities broker. I am a bit worried by the process itself. Can anyone tell me how the process goes? I understand I will have to undergo an FBI background check, educational and emplyment history and a credit check along with the test itself before being approved to trade.

I must admit I have gone through some tough times financially myself and have some collections on my credit report that mount to nearly 50k. I also went through a forclosure almost three years ago when I owned a small business in detroit and things got tough in the local economy. does this affect my ability to get licensed?

I am not worried about the crimial , employment or educational background check but am nervous about my personal finace being a factor. Thanks for your help.
  • #13
  • Oct 28, 2009 2:19pm Oct 28, 2009 2:19pm
This may be comforting but the circumstances are not exactly the same. I successfully passed the Series 7 and became registered with the NASD (not the NFA, I know...) with a personal bankruptcy on my credit report less than 2 years old, I was 23 at the time.

As long as your credit issues or personal finance issues are NOT related to a Securities, or Investment related business... I would gamble that you are fine.

There are places to describe those items on your application for registration I believe. Just be truthful, with the application and your sponsoring broker if you have one.
  • #14
  • Oct 28, 2009 2:25pm Oct 28, 2009 2:25pm
Thank you very much for the response, My issues are not at all related to securities. Its a touch subject because the potential IB is my fiances father. She knows about the issues at hand but Im not sure I want him to know.
  • #15
  • Oct 28, 2009 3:38pm Oct 28, 2009 3:38pm
If he (her father) is part of a larger company and they have a department which would handle registrations...I would say..."go for it". It is my belief that the registrations process is to identify previous felons, or people within the securities industry that have complaints against them.
Basically, your registration application is going to come back "approved" or "not approved" (<--- least likely).
He is not going to see particular details of your credit report, unless he sifted through materials only the registrar or HR person would see.

Get the materials and when you find out how you submit them, then you'll know. (Do they go to him? or sent/mailed/carried to a different department, building, etc?)

Good Luck.
  • #16
  • Dec 28, 2009 3:15am Dec 28, 2009 3:15am
Can someone tell me where can i get a serie 3 license (Commodity license) . I live in Orange County, Ca... I need the address , can someone provide me the website. Thanks
  • #17
  • Dec 28, 2009 4:11am Dec 28, 2009 4:11am
Quoting tommy102010
Can someone tell me where can i get a serie 3 license (Commodity license) . I live in Orange County, Ca... I need the address , can someone provide me the website. Thanks
http://www.finra.org/Industry/index.htm

You will need to apply with finra first then go to a testing center to take the test. Here is a link that shows the different testing centers:

http://apps.finra.org/TestCenter/1/locations.aspx

Once you have passed the test you can register with the NFA to become a CTA
  • #18
  • Dec 29, 2009 3:03am Dec 29, 2009 3:03am
http://cdn.forexfactory.com/nfs/cust...tar54316_3.gif magnumfreak
Checking in once a day.



http://www.finra.org/Industry/index.htm

You will need to apply with finra first then go to a testing center to take the test. Here is a link that shows the different testing centers:

http://apps.finra.org/TestCenter/1/locations.aspx

Once you have passed the test you can register with the NFA to become a CTA

Thank you so much Magnumfreak
  • #19
  • Jan 1, 2010 10:39pm Jan 1, 2010 10:39pm
Hi,

Happy New Year.

I passed my Series 3 exam yesterday, and got my license on New Year's Eve with a combined score of 90%. Boy, does it feel good to have that behind me and off my back. If anybody has any questions about the process from registering with FINRA with form U-10, all the way up to how I prepared for it make a reply to this post.

Good luck to everybody who is studying for the exam, and good luck on your test date.
  • #20
  • Jan 2, 2010 11:51am Jan 2, 2010 11:51am
Quoting Belnor
Hi,

Happy New Year.

I passed my Series 3 exam yesterday, and got my license on New Year's Eve with a combined score of 90%. Boy, does it feel good to have that behind me and off my back. If anybody has any questions about the process from registering with FINRA with form U-10, all the way up to how I prepared for it make a reply to this post.

Good luck to everybody who is studying for the exam, and good luck on your test date.
Hi Belnor,,
I am study about series 3 exam now and I would like to get some of the experience from you. Can you tell me how you prepare for the test, I have read and study this book, but there are almost 400 pages.
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