Proprietary traders and market makers will soon be taking the new Series 56 Examination.  It's due out in September 2011 and, unlike the Series 7 exam, this new exam will focus on trading-specific topics, according to Peter Chapman of Traders Magazine.  

"The test will capture all of the generic types of questions that any equities or options trader should know.  If you don't know this, you should not be in control of sending orders to an exchange."  -- Box Options Exchange SVP Alan Grigoletto.

Mr. Grigoletto is in charge of business development and marketing at the exchange, and is on the inter-exchange committee that's developing exam questions.   BOX is working with these other exchanges - CBOE, NYSE's Arca and Amex, Nasdaq OMX Group, NSX, Direct Edge, and ISE.

    Series 56 v. Series 7, And the Likelihood of Waivers.   Mr. Chapman notes that traders typically must take the Series 7 exam and/or an Exchange house exam - e.g., Nasdaq's Series 55 exam, NYSE Amex's Series 48 exam, NYSE Arca's Series 44 exam.  Most house exams will likely be superseded, though some exchanges may administer it to new traders.  The Series 7 exam, which is geared primarily to retail stock brokers, is lengthy and covers an array of brokerage topics - most are irrelevant to the world of trading. 

Traders and market makers, who currently are required to hold the Series 7 License, are hoping they can waive the nse Series 56 exam. Though the issue has not been settled, Grigoletto and officials at CBOE say a waiver for the Series 7 is a good possibility.  The waiver likely would not apply to new traders, however.

It's also not clear whether regulators will make any distinction between market makers and prop traders.  After all, the Series 56 exam is also known as the Proprietary Traders Exam.

    Scope of the Series 56 Exam.   FINRA will administer the Series 56 exam.  The length of the test and the number of questions are not known, but many FINRA-administered tests take about 3 hours to complete and include about 100 questions.  The Series 7 exam, by contrast, includes 250 questions and takes a total 6 hours to finish.   Among the topics on the exam:  concentration monitoring, closing out errors, Reg. SHO, expiring exercise declarations, and exercise limits.

For further details, go to:   [TradersMag, 2/7, "New Exam for Traders..."]