On February 8, 2005, the Chartered Market Technicians Association (CMT Association) was informed that the FINRA submitted a rule filing with the Securities and Exchange Commission to accept the CMT Level 1 Exam and CMT Level 2 Exam as an alternative to the Series 86 exam, required of financial analysts. The New York Stock Exchange filed their ruling on January 31, 2005.
Below are the instructions on how one may go about applying for their Series 86 Exemption. The full press release can also be found at the bottom of this page.
Series 86 Exemption Instructions
FINRA has amended FINRA Rule 1050 to provide an exemption from the analysis portion of the Research Analyst Qualification Examination (Series 86) for applicants who have passed Levels I and II of the Chartered Market Technician (CMT) Certification Examination administered by the CMT Association.
To be eligible for the exemption, an applicant must have passed Levels I and II of the CMT Certification Examination and must either (1) have functioned continuously as a research analyst since having passed Level II of the CMT Certification Examination, or (2) have passed Level II of the CMT Certification Examination within two years of application for registration as a research analyst.
In addition to submitting to FINRA via Web CRD a Uniform Application for Securities Industry Registration or Transfer Form (Form U4) to register a person as a Research Analyst, member firms compliance department are also required to request the exemption in writing for eligible candidates. To request the exemption, the member must submit the following information to the FINRA Testing and Continuing Education Department via e-mail at RSCMT@finra.org:
- Candidate’s name (Last, First, Middle Initial)
- Candidate’s CRD Number
- Candidates Birth Date (MM/DD/YR)
- Broker-Dealer Name and CRD#
A statement of which prerequisite the candidate meets (i.e. whether candidate has either (1) functioned continuously as a research analyst since having passed Level II of the CMT examination, or (2) passed Level II of the CMT Examination within two years of application for registration as a research analyst.)
FINRA Staff will then contact CMT Association to confirm the candidate’s eligibility. Upon receipt of a positive response from CMT Association, the exemption will be posted to the candidate’s CRD record and notification will be sent to the member firm. Candidates who have not completed the required CMT Association Examinations must pass both the Series 86 and 87. For candidates seeking a Series 86 exemption, note that registration approval will not be posted until the candidate also passes the Series 87.
Official Press Release
For Release: Wednesday, February 9, 2005
CMT Association Praises Securities Regulators for Recognizing Technical Analyst Exam Program
CMT Exam more meaningful test for technical analysts than 86 Exam
Woodbridge, NJ (February 9, 2005) — The Chartered Market Technicians Association (CMT Association) welcomed the decision of securities regulators to recognize the CMT Association’s Chartered Market Technician (CMT) examination program as an alternative to the Analysis Series 86 Examination for technical analysts. The New York Stock Exchange (NYSE) and FINRA have filed changes to their respective analyst examination rules with the Securities and Exchange Commission (SEC). The changes provide that technical analysts who have passed both the CMT level 1 and 2 examinations need not take the 86 Exam. The rule changes took effect upon filing with the SEC. The rule changes do not exempt technical analysts from taking the Regulatory Series 87 Examination, which tests analysts for their understanding of strict rules that ensure analyst independence.
Jordan E. Kotick, CMT, President of CMT Association and the Global Head of Technical Analysis for Barclays Capital, praised the NYSE, NASD, and SEC for their actions. “The regulators have acted wisely to protect investors,” said Kotick. “Technical analysis is intrinsically different from fundamental analysis. The 86 Exam is an excellent exam but it tests for competence with regard to fundamental analysis. Technical analysts should have to show competence with respect to their chosen field of technical analysis. The CMT is the appropriate test for technical analysis and CMT Association is pleased that the regulators have recognized it,” concluded Kotick.
The CMT Association sought recognition of the CMT from the NYSE and NASD. The rule changes exempt from the 86 Exam any technical analyst who passed the more relevant CMT level 1 and 2 exam in the past, or who does so in the future. More information about the rule changes is available at:
- SR-NYSE-2005-12 and Information Memo 05-09 — available at www.nyse.com
- SR-NASD-2004-159 — available at www.finra.org
Technical analysis differs from fundamental analysis. Fundamental analysts make judgments about the prospects for a stock after examining information about the company. Technical analysts make judgments about the prospects for a stock after examining the stock price, trading volume, and investor psychology.
The CMT Association began developing the CMT examination program in 1985.