Series 6 Content Tour

Tour of the Series 6 Investment Company and Variable Contracts Products Representative Qualification Examination.  


Exam Content 

Function 1 Regulatory fundamentals and business development – 22 Questions
Function 2 Evaluates customers’ financial information, identifies investment objectives, provides information on investment products, and makes suitable recommendations – 47 Questions
Function 3 Opens, maintains, transfers and closes accounts and retains appropriate account records 21 Function 4 Obtains, verifies, and confirms customer purchase and sale instructions – 10 Questions

Total 100


FUNCTION 1 – Regulatory fundamentals and business development

1.1: Demonstrates understanding of fundamental regulatory knowledge and provides personal and professional information required to be disclosed to obtain and maintain appropriate registration(s)

Knowledge of:

  • General industry regulations, including SEC, SRO, and state requirements
  • Registration, qualification, continuing education, and termination of employment of associated persons
  • Permitted activities for registered and non-registered associated persons

1.2: Solicits business by contacting and building relationships with customers and prospects in person, by telephone, mail or electronic means

Knowledge of:

  • Product definitions and classifications
  • Required approvals and content standards of public communications: retail communications, institutional communications, correspondence, research reports, telephone solicitations
  • Appropriate use of professional designations
  • Definition of regulated investment company by the Internal Revenue Code
  • “Conduit” or “pipeline” theory, required distribution of income and realized capital gains
  • “Do-not-call” lists and other telemarketing requirements

1.3: Discusses the products and services offered with customers and prospects and distributes offering and disclosure documents

Knowledge of:

  • Content and delivery of prospectuses, Statement of Additional Information (SAI), and other offering documents
  • Networking arrangements
  • Regulations related to marketing/prospecting
  • Initial privacy disclosures to customers (e.g., definitions, privacy and opt-out notices, disclosure limitations, exceptions)

1.4: Conducts seminars and holds other public forums with customers and prospects, and obtains appropriate approvals

Knowledge of:

  • Definitions of retail communications, institutional communications and correspondence, including categorization of public appearances, seminars and related sales literature and advertising
  • Regulations regarding communications with the public
  • Standards and approval of communications


FUNCTION 2 – Evaluates customers’ financial information, identifies investment objectives, provides information on investment products, and makes suitable recommendations

2.1: Gathers customers’ financial and non-financial information to identify, analyze, and assess risk tolerance, investment experience and sophistication level

Knowledge of:

  • Essential facts regarding customers and customer relationships
  • Financial and personal profile of a customer (e.g., age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance)
  • Reasonable-basis suitability, customer-specific suitability and quantitative suitability
  • Investment strategies and recommendations to hold


2.2: Makes suitable investment recommendations based on customers’ current investment profile, including financial status, tax status, and investment objectives and explains to customers how recommended products are structured and priced and the risks associated with the underlying investments

Knowledge of:

  • Investment profile and strategies
  • Types of investment returns (e.g., dividends, capital gains, return of capital)
  • Securities markets (e.g., exchange markets, over-the-counter (OTC)/negotiated market, new issue market (e.g., primary offering, role of investment banker))
  • Fair dealings with customers and appropriate business conduct (e.g., application, definitions, sales charges, withhold orders, refund of sales charges, dealer concessions, member compensation, execution of portfolio transactions, breakpoint sales)
  • FINRA’s cash and non-cash compensation regulations (e.g., gifts and business entertainment limits)
  • Insider trading and prohibited activities (e.g., churning, front running, switching, commingling, unauthorized trading, guarantees against losses, selling away)
  • Capitalization, pricing, secondary market trading, and redeemability
  • Types of underlying securities ° Equity securities: Definitions and features of common stock, preferred stock and other types of equity securities (e.g., ADRs, rights, and warrants)

 ° Debt securities: Definitions and features of corporate bonds and other debt securities (e.g., zero coupon bond, convertible bond, mortgage-backed securities (pass through), collateralized mortgage obligations (CMOs), asset-backed securities (ABS))
° Options: definition and features
° U.S. Treasury securities (e.g., Treasury bills, notes, and bonds, Separate Trading of Registered Interest and Principal Securities (STRIPS), and Treasury Inflation Protection Securities (TIPS))
° U.S. government agencies securities (e.g., Government National Mortgage Association (GNMA) securities, Federal National Mortgage Association (FNMA) securities, Federal Home Loan Mortgage Corporation (FHLMC) securities) issuing agencies and their purposes, risks, payment of interest and principal
° Municipal bonds (General Obligation (GO) bonds, Revenue bonds)
° Other types of debt securities and money market instruments, including but not limited to: corporate commercial paper, brokered certificates of deposit (CDs) and banker’s acceptances

  • Other investment types, including but not limited to: Exchange Traded Funds (ETFs) and hedge funds
  • Variable annuities, deferred variable annuities and variable life (fees and charges, premiums, riders, investment options, death benefits and payout options)
  • Tax considerations

° Mutual fund investor activities, reporting dividend and capital gains distributions to IRS and state tax agency, tax treatment of securities transactions and realized/unrealized net capital gains/losses, exchanges as taxable event, shareholder’s tax basis (e.g., offering price, exchange of securities, gift of securities, inheritance of securities, reinvested dividends and capital gains distributions)

° Determining holding period of securities (e.g., trade date, acquisition, redemption, wash sale rule)

° Tax treatment of variable annuity contracts (e.g., accumulation period, annuitization period, 72(t) taxation of annuity payments, withdrawals and surrenders, death benefits, 1035 exchanges)

° Tax treatment of variable life insurance to the policyholder (e.g., during the life of the policy, upon the death of the insured, upon full or partial surrender of the policy, 1035 exchanges, modified endowment contract (MEC))


2.3: Provides appropriate disclosures concerning products, risks, services, costs, fees, current quotes and explains pricing method

Knowledge of:

  • Definitions, characteristics, and concepts of products, types of accounts, and plans
  • Price and yield terms (e.g., bid, ask, NAV, premium, par)
  • Tax treatment, contributions, accumulation, withdrawals, account ownership, beneficiaries, benefits, required minimum distributions (RMD), and rollovers and transfers
  • Retirement and tax advantaged plans

° Types of individual retirement accounts (e.g., IRAs: traditional, Roth and SEP) ° Employer-sponsored retirement plans (e.g., Simplified Employee Pension Plan (SEP), Savings Incentive Match Plans for Employees (SIMPLE), IRA and 401(k), 403(b) and 403(b)(7); 501(c)(3), and 457 plans, Employee Retirement Income Security Act (ERISA)

° Non-qualified deferred compensation ° Education plans (e.g., 529 College Savings Plans, Coverdell Education Savings Plan)

  • Open-end investment company

° Fund shares, important factors in comparison of funds, structure and operation (e.g., functions of the board of directors, investor advisor, underwriter/distributor, custodian, and transfer agent), rights of shareholders, exchange privileges within families of funds, automatic reinvestment of dividend income and capital gains distributions, systematic purchase and withdrawal plans, performance, dollar cost averaging (DCA)

  • Mutual fund

° Types of portfolios and funds (e.g., money market, fixed income, equity, specialized)
° NAV per share, offering price, ex-dividend, share class, SEC Rule 12b-1 distribution plans, letter of intent, rights of accumulation,
° Fees, charges, and expenses including no load, load (e.g., front-end, back-end), management fees, 12b-1 fees, administrative expenses, redemption fee, reduced sales charges/quantity discounts, and breakpoints

  • Variable annuity and variable life insurance

° Insurance company separate accounts/general accounts (Exempt under 3a-8 of the Securities Act of 1933, Investment Company Act of 1940 Section 2(a)(37))

° Valuation of variable annuity contracts (accumulation units, annuitization units, assumed interest rate (AIR), relationship between AIR and actual rate of return)

° Variable life insurance (fixed and flexible premium types)

° Fees, charges, and expenses including management fees, 12b-1 fees, mortality and expense charges, administrative expenses, payout or withdrawal plans, conversion privilege, restrictions, contingent deferred sales charge, and reduced sales charges/quantity discounts

  • Unit Investment Trust (UIT)
  • Closed-end fund

° Capitalization, pricing, distribution, redemption restrictions FINRA Rules

2.4: Provides explanations to customers regarding how economic events and investment risk factors may impact investments

Knowledge of:

  • Investment risk factors (e.g., call, capital, credit, currency, inflationary, interest rate, liquidity, market (systematic, non-systematic), social and political, pre-payment, reinvestment, timing)
  • Concept of risk/reward and the effects of diversification
  • Types of investment strategies • Sources of market and investment information (e.g., news outlets, internet, rating agencies, research reports) and economic factors (e.g., inflation, deflation, monetary policy, economic policy)
  • The role of the Federal Reserve Board
  • Changing interest rates and the effect on money supply, fiscal policy, federal taxation and spending
  • International economic factors (e.g., currency exchange rates, balance of trade, gross domestic product (GDP))


FUNCTION 3 – Opens, maintains, transfers and closes accounts and retains appropriate account records

3.1: Provides information and disclosures to customers regarding various account types, characteristics, and restrictions

Knowledge of:

Account registration types (e.g., individual, JTWROS, UGMA)

Distribution elections (e.g., cash, reinvestment)

3.2: Obtains and updates customer information and documentation necessary to open, maintain, and close the account

Knowledge of:

  • Customer screening (e.g., Customer Identification Program (CIP), determining whether a customer is an associated person of another broker-dealer)
  • Account authorizations and legal documents (e.g., power of attorney, authorized account user, discretionary accounts, Transfer on Death (TOD), beneficiary forms)
  • Recordkeeping (e.g., retention of customer and firm-related records)
  • Customer account record maintenance (e.g., update personal information, holding of customer mail, sending required SEC Rule 17a-3 notifications)
  • Transferring customer accounts between broker-dealers (e.g., Automated Customer Account Transfer Service (ACATS))
  • Account registration changes and internal transfers (e.g., TOD, divorce)
  • Delivery of annual reports and notices of corporate actions (e.g., proxy statements)


3.3: Identifies and responds appropriately to suspicious customer account activity for the life of an account

Knowledge of:

  • Anti-Money Laundering (AML) compliance procedures, program, and reporting (e.g., Bank Secrecy Act (BSA), Office of Foreign Asset Control (OFAC) Specially Designated Nationals (SDN) list, Currency Transactions Reports (CTRs), Customer Identification Program (CIP), Suspicious Activity Reports (SARs))
  • Circumstances for notifying FinCEN or refusing or restricting activity in an account and/or closing accounts


FUNCTION 4 – Obtains, verifies, and confirms customer purchase and sale instructions

4.1: Verifies, enters and monitors orders in accordance with customers’ instructions and regulatory requirements and reports trade executions to customers

Knowledge of:

  • Cash accounts (e.g., prompt payment for securities purchased, extension of time, frozen accounts)
  • Market terms (e.g., trade date, settlement date, ex-dividend date)
  • Delivery requirements and settlement of transactions
  • Trade execution activities (e.g., market timing, late trading, prompt payment for securities purchased, extension of time, frozen accounts, prohibition on arranging loans for others)
  • Information required on an order ticket
  • Sharing of referral fees and commissions
  • Confirmations and account statements