Introduction to the Series 31 Exam
The financial services industry is a vast landscape of specialized niches, each requiring specific regulatory hurdles to ensure investor protection and market integrity. For professionals already holding a Series 7 license, the Series 31 exam—officially known as the Futures Managed Funds Examination—represents a strategic gateway into the world of managed futures. This specialized exam allows registered individuals to sell managed futures funds or supervise these activities without the need to take the more comprehensive Series 3 (National Commodities Futures Examination).
Understanding the nuances of the Series 31 is essential for any financial advisor or broker looking to diversify their client portfolios with alternative investments. Our team at Fraser Exam has compiled the most effective strategies to help you navigate this exam, ensuring you understand not just the “how” but the “why” behind futures regulations. Whether you are looking to work with Commodity Pool Operators (CPOs) or Commodity Trading Advisors (CTAs), this guide provides the roadmap you need to succeed.
Section 1: The Basics & Eligibility
The Series 31 exam is an NFA (National Futures Association) exam administered by FINRA. Its primary purpose is to qualify individuals who are already registered as General Securities Representatives to engage in the solicitation of discretionary accounts or the sale of interests in commodity pools. Essentially, it bridges the gap between traditional securities and the futures market for established professionals.
Who is it for?
The exam is specifically designed for individuals who intend to limit their futures-related activities to managed funds. This includes soliciting funds for commodity pools or managing accounts for clients where the trading is handled by a professional CTA. If your career goals involve direct floor trading or individual commodity speculation for clients, the Series 31 will not be sufficient; you would likely need the Series 3 instead.
Prerequisites and Eligibility
The most critical prerequisite for the Series 31 is that the candidate must be currently registered as a General Securities Representative (Series 7) with their sponsoring firm. Unlike some introductory exams, you cannot take the Series 31 in a vacuum; it is an “add-on” qualification. You must be associated with a firm that is a member of the NFA to hold the registration officially.
Costs and Retake Limits
The registration fee for the Series 31 exam is $105. This fee is paid to FINRA at the time of enrollment. Regarding retakes, if a candidate fails the exam, there is a mandatory waiting period. Generally, after the first or second failed attempt, you must wait 30 days before testing again. If you fail a third time, the waiting period extends to six months. There is no specific age limit beyond the standard legal requirement to work in the financial services industry (typically 18 years old).
International Validity
While the Series 31 is a U.S.-based certification recognized by the NFA and the Commodity Futures Trading Commission (CFTC), its principles are often respected globally. However, it does not grant the right to sell futures products in other jurisdictions like the UK or EU without meeting their specific local regulatory requirements (such as those set by the FCA).
| Feature | Details |
|---|---|
| Official Name | Futures Managed Funds Examination |
| Administering Body | FINRA (on behalf of the NFA) |
| Prerequisite | Series 7 Registration |
| Exam Cost | $105 |
| Passing Score | 70% |
Section 2: Exam Format & Style
The Series 31 is known for being relatively short compared to the grueling multi-hour sessions of the Series 7 or Series 24. However, its brevity means there is very little room for error. Every question carries significant weight toward your final score.
Format and Duration
The exam consists of 45 multiple-choice questions. Candidates are allotted 60 minutes to complete the test. This works out to roughly 1 minute and 20 seconds per question, which is generally sufficient for most candidates, as the questions tend to be more focused on regulatory knowledge rather than complex mathematical calculations.
Testing Environment
The exam is closed-book and computer-based. It is administered at Prometric testing centers across the country. You are not allowed to bring any outside materials into the testing room. Most centers will provide you with an electronic scratchpad or a physical whiteboard and marker for any notes you need to make during the session.
Scoring and Negative Marking
The exam is scored on a pass/fail basis, with a required passing score of 70%. This means you must answer at least 32 out of the 45 questions correctly. One significant advantage for test-takers is that there is no negative marking. You are not penalized for incorrect guesses, so it is always in your best interest to answer every single question, even if you are unsure of the answer.
Section 3: Difficulty & Passing Rates
While the Series 31 is often considered “easier” than the Series 3 because it covers fewer topics, it should not be taken lightly. The difficulty lies in the specificity of the rules. You aren’t just learning general market concepts; you are learning the strict compliance rules of the NFA.
Historical Passing Rates
The NFA and FINRA do not publicly release exact passing rates for the Series 31. However, industry estimates suggest a passing rate in the 75% to 85% range for prepared candidates. The high prerequisite of already holding a Series 7 means that most test-takers are already experienced with standardized financial exams, which contributes to the relatively high success rate.
Common Challenges
Candidates often struggle with the following areas:
- NFA Compliance Rule 2-29: This rule governs communications with the public and advertising. The nuances of what constitutes a “hypothetical” performance track record versus a “real” one can be tricky.
- CPO/CTA Disclosure Documents: Understanding exactly what must be disclosed to a potential investor, including fees, conflicts of interest, and business backgrounds.
- Margin Requirements: While less math-heavy than the Series 3, understanding the difference between maintenance margin and initial margin in a futures context is vital.
Section 4: Preparation Strategy
Success on the Series 31 depends on a focused study plan. Because the exam is so specialized, broad financial knowledge won’t be enough to carry you through the regulatory-heavy sections. Fraser Exam offers comprehensive study materials tailored for this exam, which can significantly reduce your study time by focusing only on the topics that are actually tested.
Recommended Study Hours
For most professionals, 20 to 30 hours of dedicated study is sufficient. This can usually be accomplished over a two-week period. If you have been out of the “testing mode” for several years, you might want to add an extra 10 hours to refresh your test-taking skills and familiarize yourself with the NFA’s specific terminology.
Study Resources
While self-study is entirely possible using the official NFA Manual, most candidates prefer using third-party prep providers. These providers condense the dense legal language of the NFA rules into digestible summaries and practice questions. We recommend the following approach:
- Read the study guide once through to understand the broad concepts.
- Focus heavily on Practice Exams. Since the Series 31 question pool is relatively small, practice exams are highly effective at mimicking the actual test experience.
- Review the official NFA registration requirements to understand the context of the exam.
| Timeline | Focus Area |
|---|---|
| Week 1 | General futures theory, CPO/CTA definitions, and Disclosure requirements. |
| Week 2 (Days 1-4) | NFA Compliance Rules (2-9, 2-29, 2-30) and anti-money laundering (AML). |
| Week 2 (Days 5-7) | Full-length practice exams and reviewing incorrect answers. |
Section 5: Career & ROI
Passing the Series 31 is more than just adding a number to your CRD (Central Registration Depository) profile; it’s about expanding your service offering. In a world where traditional 60/40 portfolios are facing challenges, managed futures offer a non-correlated asset class that many high-net-worth clients find attractive.
Job Roles and Opportunities
The most common roles for Series 31 holders include:
- Wealth Manager / Financial Advisor: Incorporating managed futures funds into client portfolios.
- Wholesaler: Working for a fund manager to sell commodity pool interests to other advisors.
- Compliance Officer: Supervising the sale and marketing of managed futures products within a broker-dealer.
Salary Impact
While the certification itself doesn’t always trigger an automatic raise, it increases your revenue-generating potential. Advisors who can offer alternative investments often attract larger clients. According to industry surveys, advisors with specialized designations in alternatives can see a significant increase in their total compensation due to the higher complexity and fee structures associated with these products.
Expiration and Renewal
The Series 31 registration does not “expire” as long as you remain employed by an NFA-member firm and keep your Series 7 active. However, if you leave the industry for more than two years, your registrations will lapse, and you will likely need to retake the exam to become registered again. Additionally, you must comply with the NFA’s ongoing Continuing Education (CE) requirements, which often include annual ethics training.
Section 6: Exam Day Logistics
Preparation doesn’t end with the books; you need to be ready for the logistics of the testing center. Most Series 31 exams are scheduled through the official FINRA exam scheduling portal.
What to Bring
You must bring a valid, government-issued photo ID that matches the name on your exam enrollment. A driver’s license or passport is standard. Most centers also require a secondary form of ID with a signature.
Prohibited Items
The list of prohibited items is extensive. You cannot bring cell phones, watches, hats, or even your own pens into the testing room. All personal belongings must be stored in a locker provided by the testing center. If you are caught with any prohibited electronic device, your exam will be terminated immediately, and you may be barred from future testing.
Receiving Results
The Series 31 provides instant gratification (or heartbreak). As soon as you finish the exam and complete a brief exit survey, your score will flash on the screen. You will also receive a printed performance report before leaving the center, which breaks down how you performed in each of the major content areas.
Comprehensive FAQ Section
Is online/remote proctoring available for the Series 31?
Currently, FINRA and the NFA primarily require the Series 31 to be taken at a physical Prometric testing center. While some exceptions were made during the height of the pandemic, the standard remains in-person testing to ensure the highest level of security and integrity.
What is the cost of the exam, and are there hidden fees?
The base cost is $105. However, your firm may charge an internal administrative fee for processing your U4 filing. If you reschedule your exam within 10 business days of your appointment, Prometric may charge a rescheduling fee.
How do I schedule my exam date?
First, your firm must file a Form U4 and pay the fee to open an “enrollment window.” Once that window is open (usually lasting 120 days), you can visit the Prometric website to select a date, time, and location that works for you.
What is the cancellation or rescheduling policy?
To avoid a fee, you must reschedule or cancel at least 10 business days before your appointment. If you cancel within two business days, you will likely forfeit the entire exam fee.
Am I allowed to bring a calculator?
No, you are not allowed to bring your own calculator. If the exam requires calculations, the testing software will include an on-screen calculator, or the testing center will provide a basic handheld one.
Are bathroom breaks allowed during the exam?
Yes, you can take a bathroom break, but the exam clock does not stop. Given that the Series 31 is only 60 minutes long, most candidates prefer to power through without breaks.
What is the passing score?
The passing score is 70%. Out of 45 questions, you must get 32 correct.
Does the exam change every year?
The NFA updates the exam questions periodically to reflect changes in regulations or market practices. However, the core concepts of the Series 31 remain relatively stable. It is always best to use the most recent study materials available.
Do I get my results immediately?
Yes, you will receive your results on-screen immediately after submitting the exam.
If I fail, how soon can I retake the exam?
There is a 30-day waiting period after your first and second failed attempts. After a third failure, the wait time increases to 180 days.
Does this certification expire?
As long as you are associated with a member firm and your Series 7 is active, the Series 31 does not expire. If you leave the industry for more than two years, the registration will lapse.
What happens if I arrive late to the testing center?
Testing centers are very strict. If you arrive more than 15-30 minutes late, you may be turned away, your appointment will be marked as a “no-show,” and you will forfeit your exam fee.
Are the questions multiple-choice or essay-based?
All 45 questions on the Series 31 are multiple-choice, typically with four possible answers (A, B, C, and D).
Are accommodations available for candidates with disabilities?
Yes, FINRA provides accommodations in accordance with the Americans with Disabilities Act (ADA). You must submit a formal request and documentation before scheduling your exam to receive extra time or other necessary accommodations.
Conclusion
The Series 31 exam is a vital credential for any securities professional looking to bridge the gap into managed futures. While it is a shorter exam, its focus on NFA compliance and CPO/CTA regulations requires a disciplined study approach. By understanding the eligibility requirements, mastering the NFA rules, and utilizing high-quality practice exams, you can efficiently clear this hurdle and expand your professional capabilities.
Many candidates who’ve used Fraser Exam resources report feeling more confident on exam day, as our materials are designed to cut through the regulatory jargon and focus on the core concepts you’ll actually see on the test. Remember to schedule your exam well in advance, stay consistent with your study schedule, and approach the 45 questions with a calm, analytical mindset. Good luck on your journey to becoming a qualified managed futures professional!