A dealer that sells 529 plans is a member of a registered securities association. Under Exchange Act Section 15B(c)(7)(A), who conducts periodic examinations of its compliance with MSRB rules?Answer: The registered securities association. Source: Securities Exchange Act of 1934, Section 15B(c)(7)(A), 15 U.S.C. 78o-4. Outline: MSRB Series 51 Content Outline (August 2024), Part 1, 1.3.2.
A SIPC-member dealer that carries customer accounts fails. Up to what amount does SIPC protect each customer's missing cash and securities?Answer: $500,000, which includes a $250,000 limit for cash. Source: Securities Investor Protection Corporation, 'What SIPC Protects'. Outline: MSRB Series 51 Content Outline (August 2024), Part 1, 1.4.2.
Why is a state trust that issues 529 savings plan units not regulated as an investment company under the Investment Company Act of 1940?Answer: Section 2(b) excludes a state and its instrumentalities. Source: Investment Company Act of 1940, Section 2(b), 15 U.S.C. 80a-2(b). Outline: MSRB Series 51 Content Outline (August 2024), Part 1, 1.1.3.
Show all 60 questions (57 more)
Product knowledge 16
A 529 distribution is moved to the account of the beneficiary's sister in another state's plan. Within how many days must the transfer be made to stay out of income under Section 529(c)(3)(C)?Answer: 60 days. Source: Internal Revenue Code Section 529(c)(3)(C), 26 U.S.C. 529. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.2.1.
A donor puts five times the annual gift tax exclusion into a grandchild's 529 account in one year. What election does Section 529(c)(2)(B) give the donor?Answer: To treat the gift as made ratably over 5 years. Source: Internal Revenue Code Section 529(c)(2)(B), 26 U.S.C. 529. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.2.1.
A grandparent wants to fund a 529 account by transferring shares of stock into it. What does Section 529(b)(2) require of a qualified tuition program?Answer: Contributions may be made only in cash. Source: Internal Revenue Code Section 529(b)(2), 26 U.S.C. 529. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.2.1.
According to the MSRB Glossary, which education savings product do many state governments guarantee when they sponsor it?Answer: A pre-paid tuition plan. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Pre-Paid Tuition Plan'. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.2.3.
An account owner asks to pledge her 529 account as collateral for a bank loan. What does Section 529(b)(5) say?Answer: A qualified program may not allow it. Source: Internal Revenue Code Section 529(b)(5), 26 U.S.C. 529. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.2.1.
Earnings withdrawn from a 529 account and not used for qualified expenses are included in income. What additional federal tax generally applies under Sections 529(c)(6) and 530(d)(4)?Answer: 10 percent of the amount included in income. Source: Internal Revenue Code Sections 529(c)(6) and 530(d)(4). Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.2.1.
How does a pre-paid tuition plan differ from a 529 savings plan?Answer: The buyer purchases credits toward future tuition at a discount. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Pre-Paid Tuition Plan' and '529 Savings Plan'. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.3.
How often may an account owner direct the investment of contributions already in a 529 account, under Section 529(b)(4)?Answer: No more than 2 times in any calendar year. Source: Internal Revenue Code Section 529(b)(4), 26 U.S.C. 529. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.2.1.
In the market for 529 savings plans, what is the primary distributor?Answer: The dealer that underwrites the plan's primary offering. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Primary Distributor' and 'Selling Dealer'. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.2.4.
Interest on which U.S. savings bonds may be excluded from income when the bonds are cashed to pay qualified education expenses, according to IRS Publication 970?Answer: Series EE bonds issued after 1989 and Series I bonds. Source: IRS Publication 970, Tax Benefits for Education, 'Education Savings Bond Program'. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.3.
Section 529(c)(3)(E) allows a limited tax-free rollover from a 529 account to the beneficiary's Roth IRA. For how long must the 529 account have been maintained?Answer: 15 years. Source: Internal Revenue Code Section 529(c)(3)(E), 26 U.S.C. 529. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.2.1.
Under Internal Revenue Code Section 529(b)(1), who may establish and maintain the kind of qualified tuition program in which contributions are made to an account, a 529 savings plan?Answer: A state or its agency or instrumentality. Source: Internal Revenue Code Section 529(b)(1), 26 U.S.C. 529. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.2.1.
What is a local government investment pool (LGIP)?Answer: A pool set up by a state or local government to invest governments' public funds. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Local Government Investment Pool (LGIP)'. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.1.
What is the yearly limit on contributions to one beneficiary's Coverdell education savings account under Section 530(b)(1)?Answer: $2,000. Source: Internal Revenue Code Section 530(b)(1)(A), 26 U.S.C. 530. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.3.3.
Which description matches the definition of a municipal fund security in MSRB Rule D-12?Answer: A municipal security of an issuer that, but for Section 2(b), would be an investment company. Source: MSRB Rule D-12. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.1.
Which of these is a municipal fund security?Answer: An interest in a local government investment pool. Source: MSRB Glossary of Municipal Securities Terms, Third Edition, 'Municipal Fund Security'. Outline: MSRB Series 51 Content Outline (August 2024), Part 2, 2.1.
General supervision 10
A dealer sells 529 plan units to another dealer that is buying in its capacity as a dealer. Is the buyer a customer under MSRB Rule D-9?Answer: No; a dealer acting in its capacity as such is not a customer. Source: MSRB Rule D-9. Outline: MSRB Series 51 Content Outline (August 2024), Part 3, 3.1.3.
A dealer that is not a FINRA member has eight people engaged in its municipal securities activities. How many municipal securities principals must it have under MSRB Rule G-3(b)(iii)?Answer: At least one. Source: MSRB Rule G-3(b)(iii). Outline: MSRB Series 51 Content Outline (August 2024), Part 3, 3.3.1.5.
A dealer's compliance contact leaves the firm, so the information on its Form A-12 is no longer accurate. By when must the form be updated?Answer: Within 30 days. Source: MSRB Rule A-12(k). Outline: MSRB Series 51 Content Outline (August 2024), Part 3, 3.3.1.2.
A municipal fund securities limited principal stops acting as one and returns to the role three years later, without having maintained her qualification. What does MSRB Rule G-3(b)(iv)(B)(3) require?Answer: She must meet the qualification requirements again. Source: MSRB Rule G-3(b)(iv)(B)(3). Outline: MSRB Series 51 Content Outline (August 2024), Part 3, 3.3.2.1.3.
Besides passing the Series 51 examination, what must a person have to qualify as a municipal fund securities limited principal under MSRB Rule G-3(b)(iv)(B)?Answer: Qualification as a general securities or investment company/variable contracts principal. Source: MSRB Rule G-3(b)(iv)(B). Outline: MSRB Series 51 Content Outline (August 2024), Part 3, 3.3.2.1.3.
Under MSRB Rule A-12, what must a dealer have done before it registers with the MSRB?Answer: Registered with, and been approved by, the SEC. Source: MSRB Rule A-12(a). Outline: MSRB Series 51 Content Outline (August 2024), Part 3, 3.3.1.1.
Under MSRB Rule G-3(a), what may a limited representative - investment company and variable contracts products do with respect to municipal securities?Answer: Only sales to and purchases from customers of municipal fund securities. Source: MSRB Rule G-3(a)(i). Outline: MSRB Series 51 Content Outline (August 2024), Part 3, 3.3.2.1.1.
Under MSRB Rule G-27(f), what must the principals designated for supervisory controls give the dealer's senior management, and how often?Answer: A report on supervisory controls and test results, at least annually. Source: MSRB Rule G-27(f)(i). Outline: MSRB Series 51 Content Outline (August 2024), Part 3, 3.4.3.3.
What is a bank dealer under MSRB Rule D-8?Answer: A dealer that is a bank or a separately identifiable department of one. Source: MSRB Rule D-8; MSRB Rule G-1. Outline: MSRB Series 51 Content Outline (August 2024), Part 3, 3.1.2.
What may a municipal fund securities limited principal supervise under MSRB Rule G-3(b)(iv)(A)?Answer: A principal's functions, solely for municipal fund securities. Source: MSRB Rule G-3(b)(iv)(A). Outline: MSRB Series 51 Content Outline (August 2024), Part 3, 3.3.2.1.3.
Fair practice and conflicts of interest 10
A dealer acts as agent for a customer who buys units of a 529 savings plan. What does MSRB Rule G-30(b)(ii) require of the commission or service charge?Answer: It may not exceed a fair and reasonable amount. Source: MSRB Rule G-30(b). Outline: MSRB Series 51 Content Outline (August 2024), Part 4, 4.3.2.
A dealer is under common control with the issuer of a security it sells to a customer. Under MSRB Rule G-22(c), when must the dealer disclose that control relationship?Answer: Before entering into the contract with the customer. Source: MSRB Rule G-22(a) and (c). Outline: MSRB Series 51 Content Outline (August 2024), Part 4, 4.3.3.2.
A dealer's municipal finance professional asks the firm's affiliates to contribute to a governor who has dealer selection influence. How does MSRB Rule G-37(c) treat the request?Answer: It is prohibited as soliciting contributions. Source: MSRB Rule G-37(c)(i). Outline: MSRB Series 51 Content Outline (August 2024), Part 4, 4.1.3.
A municipal finance professional of a dealer gives $1,000 to the campaign of a state treasurer who helps select the primary distributor of the state's 529 plan. What does MSRB Rule G-37(b) do?Answer: Bars the dealer from municipal securities business with that issuer for two years. Source: MSRB Rule G-37(b)(i). Outline: MSRB Series 51 Content Outline (August 2024), Part 4, 4.1.2.
A product advertisement for a 529 savings plan runs nationally. Under MSRB Rule G-21(e), what must it tell investors about their home state?Answer: To consider whether it offers tax or other benefits only for its own plan. Source: MSRB Rule G-21(e)(i)(A). Outline: MSRB Series 51 Content Outline (August 2024), Part 4, 4.3.5.5.
A state is choosing a distributor for its 529 plan. A dealer offers a fee to a lobbyist, who is not its partner, officer, employee or registered person, to press its case with the state. How does MSRB Rule G-38(a) treat the fee?Answer: It is a prohibited payment. Source: MSRB Rule G-38(a). Outline: MSRB Series 51 Content Outline (August 2024), Part 4, 4.2.2.
By when must a dealer submit Form G-37 to the MSRB for a calendar quarter in which it has reportable contributions?Answer: The last day of the month after the quarter ends. Source: MSRB Rule G-37(e)(i). Outline: MSRB Series 51 Content Outline (August 2024), Part 4, 4.1.4.
Which contribution by a municipal finance professional does not trigger the ban on business in MSRB Rule G-37(b)?Answer: $250 or less per election to an official the professional is entitled to vote for. Source: MSRB Rule G-37(b)(ii). Outline: MSRB Series 51 Content Outline (August 2024), Part 4, 4.1.2.
Which duty does MSRB Rule G-17 place on a dealer in the conduct of its municipal securities activities?Answer: To deal fairly with all persons and avoid deceptive or unfair practices. Source: MSRB Rule G-17. Outline: MSRB Series 51 Content Outline (August 2024), Part 4, 4.3.1.
Who must approve a dealer's advertisement for a 529 savings plan under MSRB Rule G-21(f), and when?Answer: A municipal securities or general securities principal, in writing before first use. Source: MSRB Rule G-21(f). Outline: MSRB Series 51 Content Outline (August 2024), Part 4, 4.3.5.4.
Sales supervision 11
A dealer has customers sign a form stating that the dealer has no suitability responsibility for its recommendations. What is the effect under MSRB Rule G-19?Answer: None; a dealer cannot disclaim the rule's responsibilities. Source: MSRB Rule G-19, Supplementary Material .02. Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.3.2.
A principal reviews an account in which a representative has recommended frequent switches between 529 investment options. Which factors does MSRB Rule G-19 name for judging whether activity is excessive?Answer: Turnover rate, cost-equity ratio and in-and-out trading. Source: MSRB Rule G-19, Supplementary Material .05(c). Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.4.1.
A representative explicitly recommends that a customer keep holding a 529 plan investment and not change it. Is that covered by MSRB Rule G-19?Answer: Yes; a strategy includes an explicit recommendation to hold. Source: MSRB Rule G-19, Supplementary Material .03. Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.3.2.
A representative tells a nervous customer that the firm will make up any loss in her 529 account. What does MSRB Rule G-25(b) say about this?Answer: A dealer may not guarantee a customer against loss. Source: MSRB Rule G-25(b). Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.4.2.
An employee of another dealer opens an account limited to 529 savings plan transactions. Does MSRB Rule G-28, on accounts of employees of other dealers, apply?Answer: No; the rule exempts transactions in municipal fund securities. Source: MSRB Rule G-28(c). Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.1.3.
For the complaint record that MSRB Rule G-8(a)(xii) requires, what is a complaint?Answer: Any written statement alleging a grievance about the dealer's activities. Source: MSRB Rule G-8(a)(xii). Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.5.2.
How often must a dealer send each customer the notice required by MSRB Rule G-10(a), stating that it is registered with the SEC and the MSRB and that an investor brochure is on the MSRB website?Answer: Once every calendar year. Source: MSRB Rule G-10(a). Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.5.3.
Under MSRB Rule G-25(c), may a dealer share in the profits or losses of a customer's municipal securities account?Answer: No, whether directly or indirectly. Source: MSRB Rule G-25(c). Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.4.3.
Under MSRB Rule G-27(c)(i)(G), what must a dealer's written supervisory procedures provide when a new customer account is opened?Answer: Prompt review and written approval by a principal. Source: MSRB Rule G-27(c)(i)(G)(1). Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.1.2.
Under the supplementary material to MSRB Rule G-19, what does the reasonable-basis suitability obligation require?Answer: A reasonable basis to believe the recommendation suits at least some investors. Source: MSRB Rule G-19, Supplementary Material .05(a). Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.3.2.
What correspondence of its municipal securities representatives must a dealer's procedures cover for review by a designated principal under MSRB Rule G-27(e)?Answer: Incoming and outgoing written and electronic correspondence with the public. Source: MSRB Rule G-27(e)(i). Outline: MSRB Series 51 Content Outline (August 2024), Part 5, 5.2.1.
Underwriting and disclosure 4
A customer in a periodic 529 plan already has the official statement. For her later purchases, how does the dealer satisfy MSRB Rule G-32(a)(iv)(A)?Answer: By promptly sending any new or amended official statement. Source: MSRB Rule G-32(a)(iv)(A). Outline: MSRB Series 51 Content Outline (August 2024), Part 6, 6.2.2.
A customer places an unsolicited order to buy a municipal fund security. What does MSRB Rule G-47 require of the dealer?Answer: Disclosure of all material information at or before the time of trade. Source: MSRB Rule G-47(a). Outline: MSRB Series 51 Content Outline (August 2024), Part 6, 6.2.1.
A dealer sells units of a 529 savings plan to a new customer. By when must it deliver the official statement under MSRB Rule G-32(a)(i)?Answer: By no later than the settlement of the transaction. Source: MSRB Rule G-32(a)(i). Outline: MSRB Series 51 Content Outline (August 2024), Part 6, 6.2.2.
In an offering covered by SEC Rule 15c2-12, a potential customer asks the participating underwriter for the final official statement during the period paragraph (b)(4) sets. How quickly must a copy be sent?Answer: No later than the next business day. Source: SEC Rule 15c2-12(b)(4), 17 CFR 240.15c2-12. Outline: MSRB Series 51 Content Outline (August 2024), Part 6, 6.1.2.
Operations 6
A customer instructs a new dealer to take over her account. After the carrying dealer receives the transfer instruction, how long does MSRB Rule G-26 give it to validate the instruction or take exception?Answer: One business day. Source: MSRB Rule G-26. Outline: MSRB Series 51 Content Outline (August 2024), Part 7, 7.2.
A customer invests $200 a month in a 529 plan under a periodic municipal fund security plan. In place of a confirmation for each purchase, what may the dealer send under MSRB Rule G-15(a)(viii)?Answer: A statement within five business days after the end of each quarter. Source: MSRB Rule G-15(a)(viii). Outline: MSRB Series 51 Content Outline (August 2024), Part 7, 7.1.2.
For how long must a dealer preserve its customer complaint records under MSRB Rule G-9(a)?Answer: Not less than six years. Source: MSRB Rule G-9(a)(vi) and G-9(b). Outline: MSRB Series 51 Content Outline (August 2024), Part 7, 7.3.2.1.
Once a customer account transfer instruction has been validated, by when must the carrying dealer complete the transfer under MSRB Rule G-26(f)?Answer: Within three business days. Source: MSRB Rule G-26(f)(i). Outline: MSRB Series 51 Content Outline (August 2024), Part 7, 7.2.
When must a dealer give or send a customer the written confirmation of a municipal securities transaction under MSRB Rule G-15(a)(i)?Answer: At or before the completion of the transaction. Source: MSRB Rule G-15(a)(i). Outline: MSRB Series 51 Content Outline (August 2024), Part 7, 7.1.1.
Who may keep the books and records that a dealer is required to maintain solely for transactions in municipal fund securities, under MSRB Rule G-8(g)(i)?Answer: A registered transfer agent the dealer uses for them. Source: MSRB Rule G-8(g)(i). Outline: MSRB Series 51 Content Outline (August 2024), Part 7, 7.3.1.10.
How this list was compiled: Our own questions, written to the seven parts of the Municipal Fund Securities Limited Principal Qualification Examination (Series 51) Content Outline that the MSRB publishes, last updated August 2024 (https://www.msrb.org/sites/default/files/2022-09/MSRB-Series-51-Content-Outline.pdf, read 2026-10-14): regulatory structure 5% of 60 scored questions, product knowledge 27%, general supervision 17%, fair practice and conflicts of interest 17%, sales supervision 18%, underwriting and disclosure obligations 6%, operations 10%. The bank holds 3, 16, 10, 10, 11, 4 and 6. Every fact was read on 2026-10-14 in the public text the question names: MSRB Rules A-12, D-8, D-9, D-12, G-3, G-8, G-9, G-10, G-15, G-17, G-19, G-21, G-22, G-25, G-26, G-27, G-28, G-30, G-32, G-37, G-38 and G-47 on msrb.org; Internal Revenue Code Sections 529 and 530, Exchange Act Section 15B and Investment Company Act Section 2(b) on govinfo.gov; SEC Rule 15c2-12 on ecfr.gov; the MSRB Glossary of Municipal Securities Terms, Third Edition; IRS Publication 970; and the SIPC page What SIPC Protects. Licence: Questions, choices and explanations are original work of this site.
How it works
The free Series 51 study guide is the MSRB's content outline, linked below the questions. This page adds 60 practice questions on 529 plans, investment pools and their supervision. Unofficial: not affiliated with the MSRB or FINRA. Not tax advice.
Read the full guide
Seven parts, in the MSRB's shares
The outline weights its 60 scored questions: regulatory structure 5%, product knowledge 27%, general supervision 17%, fair practice 17%, sales supervision 18%, underwriting and disclosure 6%, operations 10%. This bank holds 3, 16, 10, 10, 11, 4 and 6.
529 answers from the tax code
Product answers cite Internal Revenue Code Section 529 itself: cash-only contributions, two investment changes a year, 60-day rollovers, the five-year gift election and the added tax on other withdrawals.
A full-length run
The timed exam asks all 60 in 1 hour 45 minutes with the MSRB's 70% pass mark, the real exam's scored length and time limit.
A municipal fund security is defined by what it escapes: the Investment Company Act, through Section 2(b).
Rule G-28, on accounts of other dealers' employees, does not reach accounts limited to municipal fund securities.
Questions and answers
Is there a free Series 51 study guide?
Yes: the MSRB publishes its Series 51 content outline as a free PDF, with every part, topic and rule citation. The 60 practice questions here are ours, each naming its rule, and are not the MSRB's guide.
What is the Series 51 exam?
The Municipal Fund Securities Limited Principal Qualification Examination. It qualifies a principal to supervise a dealer's business in municipal fund securities, such as 529 savings plans and local government investment pools.
How many questions are on the Series 51 exam?
65 multiple-choice questions in 1 hour and 45 minutes: 60 are scored and 5 are unidentified pretest questions that do not count toward the score.
What is the passing score for the Series 51?
70%, as the MSRB's outline states. Each scored question is worth one point, and no reference materials are allowed during the exam.
What are the prerequisites for the Series 51?
A candidate must also qualify, before or at the same time, as a general securities principal or an investment company/variable contracts limited principal. The MSRB lists the exam fee as $255.