Series 34 — Retail Off-Exchange Forex Examination Exam Blueprint

How to Use This Exam Blueprint

Use this checklist to prepare for the FINRA Series 34 — Retail Off-Exchange Forex Examination. The goal is not to memorize a list of headings; it is to confirm that you can apply retail off-exchange forex concepts in calculation, customer, compliance, and conduct scenarios.

As you review, mark each area:

• Ready: you can answer scenario questions without looking up the rule or formula.
• Review: you recognize the topic but still miss details.
• Drill: you need repeated practice, especially under timed conditions.

This page is independent exam-blueprint support. For exact current rule text, administrative requirements, and any official exam policies, use current FINRA and firm-approved materials.

Topic-Area Readiness Map

Retail Off-Exchange Forex Product Mechanics

Core Terms You Should Be Able to Explain

Bid / Ask Decision Checks

Calculation and Formula Readiness

Series 34 preparation should include accurate, fast forex math. Most misses come from setting up the trade backward, not from difficult arithmetic.

Formulas to Know

For a long position in the base currency:

\[ \text{Long P/L in quote currency} = (\text{exit price} - \text{entry price}) \times \text{base currency units} \]

For a short position in the base currency:

\[ \text{Short P/L in quote currency} = (\text{entry price} - \text{exit price}) \times \text{base currency units} \]

For pip value:

\[ \text{Pip value in quote currency} = \text{base currency units} \times \text{pip size} \]

For spread cost:

\[ \text{Spread cost in quote currency} = (\text{ask} - \text{bid}) \times \text{base currency units} \]

Calculation Checklist

Before solving, ask:

• What currency pair is quoted?
• Which currency is the base currency?
• Which currency is the quote currency?
• Is the customer long or short the base currency?
• Is the customer opening or closing the trade?
• Should I use bid or ask?
• What number of units is being traded?
• What pip size does the question imply?
• Is P/L already in the account currency?
• If not, what conversion rate should be used?
• Does the question ask for gross P/L, net P/L, margin effect, or account equity?
• Are financing charges, commissions, or fees included in the facts?

Calculation Skills Table

Cross-Rate Setup Prompts

Use a simple alignment method:

1. Write the target pair.
2. List the provided pairs.
3. Invert any provided pair that points the wrong way.
4. Cancel the shared currency mentally.
5. Multiply or divide only after the pair direction is correct.
6. Check whether the result is plausible before selecting an answer.

Example prompt style:

If the target is EUR/CHF and you are given EUR/USD and USD/CHF, the shared USD can align between the two quotes. If the target is USD/EUR but you are given EUR/USD, invert before using it.

Regulatory and Compliance Vocabulary Readiness

The exam can test whether you recognize the regulatory setting around retail off-exchange forex. You do not need to turn this into a law treatise, but you should be able to apply the vocabulary in customer and firm scenarios.

Customer Account and Disclosure Checklist

Account Opening and Customer Information

Be ready to evaluate fact patterns involving:

• Customer identity and account ownership
• Trading experience, especially with leveraged products
• Financial condition and ability to bear loss
• Investment or trading objectives
• Risk tolerance
• Liquidity needs
• Time horizon
• Source of funds when relevant to the scenario
• Third-party authority or trading authorization
• Entity accounts, joint accounts, or accounts with special authority
• Prior complaints, restrictions, or red flags in the facts

Risk Disclosure Readiness

You should be able to recognize whether a disclosure or communication fairly addresses:

Documentation and Authorization Checks

Communications, Advertising, and Sales Practice Readiness

Red-Flag Language

Be prepared to identify and correct communications using phrases like:

• “Guaranteed profit”
• “No risk”
• “Safe income strategy”
• “You cannot lose more than expected”
• “This stop-loss order guarantees your exit price”
• “Past performance proves future returns”
• “Only sophisticated traders can understand this, so do not worry about the details”
• “High leverage makes the trade better”
• “The firm always fills at the quoted price”
• “Do not mention this account to compliance”

Balanced Communication Checklist

A compliant, exam-ready communication should generally be:

• Fair and balanced
• Not promissory
• Not misleading by omission
• Clear about material risks
• Clear about costs when discussed
• Consistent with customer facts
• Reviewed or approved when required by firm procedure
• Supported if it includes performance or strategy claims
• Free of exaggerated urgency or pressure tactics

Scenario and Decision-Point Checks

“Can You Do This?” Master Checklist

Product Mechanics

• Explain retail off-exchange forex in plain language.
• Identify the base and quote currency in any pair.
• State which currency the customer is buying or selling.
• Choose bid or ask for opening and closing trades.
• Explain spread and why it affects breakeven.
• Describe pip value and how position size affects it.
• Explain leverage without implying it reduces risk.
• Describe slippage, gaps, and liquidity risk.
• Distinguish spot-style forex exposure from exchange-traded futures or securities products.
• Explain rollover or financing as a possible cost or credit.

Calculations

• Compute long P/L.
• Compute short P/L.
• Calculate spread cost.
• Calculate pip value.
• Convert P/L into the account currency when required.
• Identify whether a quote must be inverted.
• Build a simple cross-rate.
• Determine whether a rate move creates gain or loss.
• Include stated fees or financing charges when the question asks for net result.
• Check whether the answer sign and currency make sense.

Customer and Account Handling

• Identify customer facts relevant to forex risk.
• Recognize when a risk disclosure is incomplete or misleading.
• Identify when trading authority is discretionary.
• Spot third-party authorization issues.
• Recognize customer complaint scenarios.
• Know when to escalate to a supervisor or compliance function.
• Identify improper handling of customer funds or instructions.
• Distinguish a recommendation from order-taking when the facts matter.

Conduct and Supervision

• Reject guarantees of profit or protection from loss.
• Spot misleading performance claims.
• Identify unauthorized trading.
• Recognize excessive or unsuitable trading concerns.
• Identify conflicts of interest.
• Apply firm procedures to communications, records, and complaints.
• Distinguish permitted explanation from improper pressure.
• Choose the most conservative compliant action when facts are ambiguous.

Common Weak Areas and Traps

Final-Week Checklist

Practical Next Step

Start with the weakest of three areas: forex calculations, customer/disclosure scenarios, or conduct and supervision. Drill that area until you can explain each answer choice, then move to mixed practice so you can switch quickly between math, terminology, and compliance judgment.