Series 22 Syllabus — Blueprint & Learning Objectives
FINRA Series 22 syllabus mapped to the official job functions with clear learning objectives and quick links to targeted practice.
This syllabus is based on FINRA’s official Series 22 Content Outline (4 major job functions). Use it as a checklist: cover every objective, then drill questions until you can pick the safest compliant answer quickly.
Differentiate retail communications, institutional communications and correspondence, and identify high-level approval, supervision and record-retention expectations.
Apply FINRA Rule 2210 principles to recognize communications that are false, misleading, promissory or not fair and balanced.
Identify why DPP communications must clearly describe material risks (illiquidity, leverage, sponsor risk, tax complexity) and not overemphasize tax benefits.
Recognize when group forums (seminars, webinars, presentations) require heightened review, disclosures and recordkeeping.
Identify high-level limits on who may approve communications and why firms use principal review controls before distribution.
Recognize common “red flag” phrases in DPP marketing (guaranteed income, risk-free tax shelter) and what compliant messaging should emphasize instead.
Identify the purpose of advertising standards in protecting investors in illiquid and complex products such as limited partnerships.
Explain, at a high level, why communications must be consistent with offering documents and not contradict risk factors or use-of-proceeds disclosures.
Offerings, Distribution, Syndication & Due Diligence
Differentiate registered public offerings from exempt/unregistered offerings at a high level (e.g., Regulation D, Regulation A, intrastate offerings).
Explain the purpose of a prospectus and identify the basic concept of prospectus delivery and timing requirements.
Differentiate best-efforts and firm-commitment underwriting and explain how distribution method affects selling process and risk allocation.
Describe the role of a dealer-manager in a DPP offering (due diligence coordination, allocations, dealer agreements, books and records) at a high level.
Differentiate dealer-manager offerings from sponsor/issuer-managed offerings and explain how roles and responsibilities can change.
Describe the role of wholesalers at a high level and identify common controls to avoid improper sales practices.
Recognize the role of finders and identify prohibited practices (e.g., unregistered activity or compensation arrangements inconsistent with rules).
Explain due diligence purpose and why broker-dealers must reasonably investigate the offering and sponsor before soliciting investors.
Identify typical due diligence review areas: offering documents and risk factors, registration/exemption compliance, financials and assets, management background, projections assumptions, fees/use of proceeds, and tax counsel opinions.
Describe the purpose of FINRA Rule 5110 (Corporate Financing Rule) and how it relates to underwriting terms and arrangements at a high level.
Explain the disclosure theme in FINRA Rule 2310(b)(3) (DPP disclosure) and why DPP-specific disclosures are essential to informed investor decisions.
Recognize that certain SEC industry guides can apply to DPP offerings (e.g., oil and gas and real estate partnership disclosure) and identify their high-level purpose.
F2 — Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives (8%)
Differentiate account types relevant to DPP activity (e.g., cash accounts, retirement accounts) and identify common restrictions and disclosure themes.
Explain why illiquid alternative investments may be unsuitable for certain account types given liquidity needs and time horizon constraints.
Identify the purpose of collecting customer account information under FINRA Rule 4512 and what types of data are typically required.
Explain, at a high level, what predispute arbitration agreements are and why firms must follow FINRA Rule 2268 when using them.
Describe retirement and other tax-advantaged account considerations at a high level (permissible investments, transfers/rollovers, distribution rules and taxation themes).
Differentiate employer-sponsored plans governed by ERISA from other accounts at a high level and explain why plan rules can constrain investment choices.
Identify why account registration changes and internal transfers create documentation and supervisory requirements.
Recognize when a customer should be advised to review account agreements and disclosures before proceeding with a recommendation.
CIP/KYC, Privacy & Customer Documentation
Apply customer identification program (CIP) basics: required identifying information, verification methods and recordkeeping.
Explain the purpose of KYC (FINRA Rule 2090) and how KYC supports suitable recommendations and supervisory controls.
Recognize customer screening considerations (e.g., foreign residency/citizenship, corporate insiders, associated persons of broker-dealers or SROs) and why they matter.
Explain Regulation S-P privacy requirements at a high level (initial disclosures, opt-out notices, safeguarding and sharing limitations).
Identify common account authorization documents (POA, trust documents, corporate resolutions) and what each permits.
Differentiate trading authority from discretionary authority and recognize that discretionary authority requires heightened documentation and supervision.
Identify suspicious-activity red flags and describe the expectation to escalate to supervisors or compliance for review.
Explain why accurate customer documentation supports audit trails, dispute resolution and regulatory compliance.
Investment Profile, Accreditation & Suitability/Reg BI
List essential customer profile facts (assets/liabilities, income/net worth, tax status, objectives, horizon, liquidity needs, risk tolerance, experience, other holdings).
Explain why liquidity needs and time horizon are especially critical for DPP suitability given limited secondary markets and long holding periods.
Define accredited investor conceptually and explain why some offerings require verification of investor accreditation and sophistication.
Apply suitability thinking to DPP recommendations by matching product risks (illiquidity, leverage, tax complexity) to customer profile constraints.
Differentiate reasonable-basis and customer-specific suitability obligations at a high level (FINRA Rule 2111).
Apply a Reg BI mindset: recommendations must be in the retail customer’s best interest considering costs, risks and reasonably available alternatives.
Explain the purpose of Form CRS at a high level and recognize when it is typically delivered in the relationship lifecycle.
Recognize when incomplete or inconsistent customer information should trigger fact-finding before recommending a DPP.
Identify when a recommendation includes a strategy or “hold” decision and why it still requires a best-interest/suitability analysis.
Recognize the role of investment analysis tools and why firms require controls over their use (FINRA Rule 2214).
Supervision & Account Approvals
Identify common supervisory approvals required to open accounts and to approve alternative/DPP transactions (firm process).
Explain the purpose of FINRA Rules 3110 and 3120 and how supervision and supervisory controls affect rep workflows.
Describe, at a high level, firm controls for receipt, delivery and safeguarding of checks, cash equivalents and securities.
Identify circumstances when firms may refuse activity, restrict transactions or close an account based on risk or compliance concerns.
Recognize documentation and escalation expectations when suspicious activity is identified in account opening or funding.
Explain why supervisory review is especially important for complex and illiquid products like DPPs.
F3 — Provides Customers with Information About Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records (54%)
Define direct participation programs (DPPs) and explain why they are often illiquid, complex and tax-intensive investments.
Differentiate registered vs unregistered DPP offerings at a high level and identify how offering type affects investor eligibility and disclosure.
Explain the high-level purpose of real estate DPP programs and identify typical benefits and risks (income, appreciation, leverage, vacancy, financing risk).
Differentiate development, operating, land development and mortgage-oriented real estate programs and match each to its common risk profile.
Explain affordable housing program concepts at a high level and identify common risks (policy/subsidy risk, limited cash distributions, residual value uncertainty).
Differentiate oil and gas exploratory, development and income programs and identify common risks (dry holes, commodity prices, regulation, environmental risk).
Differentiate overriding royalty interests from working interests and identify how cost responsibilities and risk exposure can differ.
Describe equipment leasing program concepts and identify residual value risk, lease default risk and potential phantom income scenarios.
Describe business development companies (BDCs) and other debt investment programs at a high level and identify common risks (borrower default, rate sensitivity, asset valuation).
Recognize other alternative program categories (agriculture, livestock, entertainment, R&D/venture, commodity pools) and identify why diversification and suitability are critical.
Like-Kind Exchanges and Real Estate Holding Structures (High Level)
Explain Section 1031 like-kind exchange conceptually and why it is associated with DPP-style real estate holding structures.
Differentiate TIC (tenants in common) ownership from other pooled structures at a high level and identify practical suitability considerations (control, liquidity).
Describe Delaware statutory trust (DST) conceptually as a real estate holding vehicle and recognize typical suitability considerations (illiquidity, sponsor risk).
Recognize that 1031 exchanges can defer gain but do not eliminate investment risk and require attention to timing, costs and product structure (high level).
Identify liquidity and holding-period expectations as key suitability drivers for 1031-related offerings.
Differentiate limited partnerships from general partnerships and explain why DPPs often use limited partnership structures.
Explain the roles of general partners and limited partners, including management authority, fiduciary duties and liability differences.
Describe the partnership agreement at a high level and identify common elements: capital contributions, allocations, distributions, and GP compensation.
Identify limited partner voting rights (high level) and typical matters requiring investor approval (e.g., change of GP, sale of substantially all assets, amendments).
Explain why limited partnership interests are often difficult to transfer and how transfer restrictions contribute to illiquidity.
Identify common dissolution/liquidation triggers for limited partnerships and what they imply for investor outcomes (high level).
Differentiate LLCs from limited partnerships at a high level and explain why LLCs can provide similar pass-through tax treatment with different governance.
Describe S corporation characteristics at a high level (shareholder limits, pass-through taxation, allocation limits) and recognize why they differ from partnerships.
Explain why passive general partner interests can be treated as securities and why this matters for selling activity.
Recognize other investment entities (joint ventures, grantor trusts) and identify the key exam theme: structure affects liability, tax and liquidity.
Evaluating a DPP Offering (Economic Soundness & Use of Proceeds)
Evaluate the stated objective of the program and determine whether it matches the investor’s objective (income, growth, tax benefits, diversification).
Identify major asset-specific risk factors and conflicts of interest and explain why they must be considered before recommending a DPP.
Assess sponsor/management track record conceptually and recognize why prior performance and background matter in alternatives.
Explain common sources of program capital (offering proceeds, staged payments, loans, assessments) and how financing can increase risk.
Identify typical uses of offering proceeds and explain why organizational and offering expenses reduce investable capital.
Differentiate organizational/offering costs from ongoing operating fees and identify why both affect expected net returns.
Explain the concept of “amount available for investment” and why it matters for investor outcomes.
Analyze expected return composition (current cash distributions vs capital appreciation) and identify risks when returns depend on assumptions or projections.
Evaluate liquidity provisions and exit options (share redemption programs, secondary market limitations) and align them to customer liquidity needs.
Explain dividend reinvestment plan concepts at a high level and identify how reinvestment interacts with liquidity and tax reporting.
Tax Concepts for DPPs (Pass-Through, K-1, Basis, Passive Losses)
Explain pass-through (conduit) taxation and why DPP investors receive tax items whether or not cash is distributed.
Identify IRS Form 1065 conceptually and why partnerships file informational returns.
Explain Schedule K-1 at a high level and identify that investors use it to report allocated income, loss, deductions and credits.
Differentiate ordinary income/loss and capital gain/loss and explain why classification affects investor tax outcomes (conceptual).
Explain adjusted tax basis conceptually and how basis impacts taxable gain/loss on sale and loss deductibility.
Apply passive activity rules conceptually: passive losses generally offset passive income and may be carried forward if not currently usable.
Differentiate tax credits vs tax deductions at a high level and recognize that credits reduce tax liability while deductions reduce taxable income.
Describe depreciation, depletion and amortization conceptually and why noncash deductions can partially shelter cash flow.
Define phantom income and recognize scenarios where taxable income can exceed cash distributions.
Explain “at-risk” limitations conceptually and why loss deductions can be limited to amounts at risk (including certain liabilities).
Recognize qualified nonrecourse financing conceptually in real estate and how it relates to at-risk rules (high level).
Recognize that DPP preference items can trigger AMT exposure (high level) and that the fact pattern drives the correct test answer.
Suitability/Best Interest for DPP Recommendations
Apply best interest obligations and suitability standards to determine whether a DPP is appropriate for a customer’s profile.
Assess whether the customer can understand the underlying investment risks, including illiquidity, leverage, and tax complexity.
Match the program objective to the customer objective and identify mismatches (e.g., liquidity needs vs long lock-up).
Evaluate portfolio concentration and diversification impact when adding a DPP position.
Assess investor liquidity needs and identify when illiquid DPPs create unacceptable liquidity risk.
Evaluate investor net worth and income as suitability constraints for higher-risk, illiquid alternatives.
Recognize that fees and compensation arrangements are part of the best-interest analysis and must be disclosed and considered.
Identify when the correct next step is to gather missing facts, deliver required disclosures, or escalate for supervisory review.
Explain the purpose of FINRA Rule 2122 (charges for services) conceptually and why unreasonable charges can create compliance issues.
Recognize when investment analysis tools are used and why documentation and supervision are required (FINRA Rule 2214).
Identify required disclosures on DPP transactions and explain why disclosure must address product risks, fees, conflicts and liquidity limitations.
Differentiate common costs and fees in DPPs, including upfront offering expenses and ongoing management/operating fees.
Differentiate cash vs non-cash underwriting compensation conceptually and identify why both are part of total compensation.
Recognize indeterminate compensation concepts (e.g., carried interest, continuing compensation, other securities) and why conflicts must be managed and disclosed.
Identify the concept of limitations on sales compensation in public offerings and why the Corporate Financing Rule is relevant (high level).
Explain FINRA Rule 2310(b)(4) organization and offering expense themes and why investors should understand how much of their investment is actually deployed.
Recognize the purpose of FINRA Rule 2165 in protecting specified adults and apply high-level escalation steps when exploitation is suspected.
Identify when rankings/ratings are used in communications and why additional disclosures and controls apply (high level).
Account Communications, Performance Reporting, Liquidity Options & Records
Identify sources and timing of DPP financial and tax information and explain why timing differs from public securities (high level).
Explain Schedule K-1 delivery and why investors may receive tax information after year-end (high level).
Interpret distribution rate and valuation information at a high level and recognize that reported values may be estimates for non-traded programs.
Differentiate public vs private program reporting themes and identify why valuation methodology disclosure is important.
Recognize the need to disclose sources of cash distributions (e.g., operations vs return of capital) at a high level.
Describe reinvestment plan options and identify suitability considerations when reinvestment reduces liquidity.
Describe liquidity options (secondary sales, redemption programs, liquidation events) and recognize that liquidity can be limited or unavailable.
Identify recordkeeping and books-and-records expectations (FINRA Rule 4510) and why documentation supports supervision and dispute resolution.
Explain the purpose of customer account statements (FINRA Rule 2231) and what kinds of DPP information may appear on statements (high level).
Recognize educational communication requirements related to account transfers (FINRA Rule 2273) and the importance of fair, non-misleading transfer communications.
F4 — Obtains and Verifies Customers’ Purchase Instructions and Agreements; Processes, Completes and Confirms Transactions (4%)
Explain subscription practices: order forms, escrow procedures, supervisory review, and issuer acceptance of subscribers.
Recognize the purpose of SEC Rule 15c2-4 in safeguarding customer funds in underwritings and how escrow/transmittal requirements protect investors.
Identify transaction disclosure requirements and why confirmations must contain key details (FINRA Rule 2232 and SEC Rule 10b-10).
Explain that some offerings are conditioned on issuer acceptance and identify why customers should not assume acceptance until confirmed (fact pattern driven).
Identify high-level recordkeeping requirements for broker-dealers for transactions (SEC Rules 17a-3, 17a-4 and 17a-8) and why audit trails matter.
Recognize prohibited representations in offering contexts (e.g., SEC Rule 10b-9) and why communications must align with offering conditions and disclosures.