Those members of the International Securities Exchange and the Chicago Board Options Exchange required to take the new Series 56 exam now have until Oct. 29 to pass the test.
The CBOE recently changed its deadline from Sept. 12 to Oct. 29 to comply with the plans of the ISE. Both exchange operators recently received the go-ahead from the Securities and Exchange Commission to offer the test to certain members. CBOE Stock Exchange members are also subject to the new exam.
See Chart: Testing
The Series 56 is a test being administered by the Financial Industry Regulatory Authority on behalf of a group of seven exchange operators. The exchanges are requiring those individual members with responsibility for principal trading-market makers and prop traders-to take the Series 56 as a qualification for membership. Traders may be allowed to substitute the Series 7 exam for the Series 56, depending on the requirements of the individual exchange.
Thirteen exchanges, operated by seven companies, worked with FINRA to create a "proprietary trader" classification and devise the Series 56. The SEC has given seven of these exchanges approval to register members thusly. Three of these exchanges-the ISE, the CBOE and the CBOE Stock Exchange-have set dates for taking the Series 56. Four-Nasdaq, Nasdaq BX, NYSE Arca and NYSE Amex-have not set dates yet. The six other exchanges-the Boston Options Exchange, New York Stock Exchange, National Stock Exchange, Chicago Stock Exchange, Nasdaq PHLX and C2-have not yet officially asked the SEC for the authority.
Both BATS Global Markets and Direct Edge are not involved in the accreditation process.
The exam covers both stock and options trading. It includes 100 multiple-choice questions covering such topics as general trading practices, trading systems, prohibited acts, and types and characteristics of securities, markets and market participants.
Study material is available from the Options Institute. The test is reportedly not easy. One trader reported on a trading blog that of five individuals who took the test, four barely passed and one failed.
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