Type 2 Securities Sales Representative Examination study guide
Type 2 Securities Sales Representative Examination · Work through your exam, one topic at a time.
The Type 2 Securities Sales Representative Examination is a licensing assessment for individuals who advise clients on, and sell, non-equity securities products - most commonly bonds, money market instruments, collective investment schemes and structured products. It is typically taken by new joiners to retail or private-bank sales desks, by relationship managers who need product-advice permissions, and by operations or product staff moving into a client-facing role. The Type 2 Securities Sales Representative Examination study guide has 8 sections and about 2,132 words.
01Regulatory Framework and Market Structure
This domain tests how the licensing regime, trading venues and settlement infrastructure fit together: who may perform which activity, where a product trades, and what happens after execution. Many questions disguise a licensing issue as a product issue.
305 words, about 2 min02Securities Products and Features
This domain tests whether you can link a product's economics to an investor's need: what the investor owns, what they are contractually owed, and which risks transfer to them. Use a consistent checklist: issuer, legal claim, cash-flow pattern, seniority, liquidity, currency and leverage.
291 words, about 1 min03Equities and Equity-Linked Products
This domain tests entitlement, dilution and the distinction between owning a company and owning a claim on its shares. Ordinary shares carry votes and residual dividends; preference shares rank ahead for dividends but usually carry limited votes.
269 words, about 1 min04Fixed Income and Money Market Instruments
This domain tests pricing logic: the inverse relationship between bond prices and yields, the meaning of duration and credit spread, and the cash-flow maths of short-dated instruments. A bond's price is the present value of its coupons and principal at the market yield; when yields rise, prices fall.
260 words, about 1 min05Collective Investment Schemes and Funds
This domain tests how pooled funds are structured, priced and sold, and where the investor's money actually sits. An open-end fund issues and redeems units at net asset value, usually calculated once daily as the fund's assets less liabilities divided by units outstanding.
266 words, about 1 min06Clients, Suitability and Account Handling
This domain tests know-your-client discipline: collecting the right information, matching it to a product, and documenting the decision so it can be defended later. Collect identity, financial situation, investment experience, objectives, time horizon, risk tolerance and any restrictions at onboarding, and refresh them when circumstances change.
240 words, about 1 min07Sales Process, Order Handling and Execution
This domain tests the mechanics between a client instruction and a completed trade: order types, timing, allocation, best execution and records. Record the order accurately: client, instrument, side, quantity, price limit, time received and validity.
260 words, about 1 min08Professional Conduct and Ethics
This domain tests judgement under pressure: conflicts, confidential information, personal dealing and the standards expected when no rule directly answers the question. Act with integrity and in the client's best interest; avoid or disclose conflicts; keep client and firm information confidential; do not deal ahead of clients or on inside information; do not tip others.
241 words, about 1 min