Want to work in the securities and investment industry? Or do you want to enhance your current career? Before you jump into taking a licensing test, you should learn what’s available.
The Financial Industry Regulatory Authority (FINRA) is the self-regulating body of the financial industry. In addition to setting the rules and standards for financial professionals, it oversees most of the licensing exams. FINRA offers licenses that correspond to the type of security or investment you’d like to sell. Some licenses are administered in conjunction with the North American Securities Administrators Association (NASAA).
On October 1, 2018, FINRA streamlined its licensing options from 39 to 34. Even with this reduction, the number of FINRA test offerings is still overwhelming. So, how do you know what to take? Here are the most popular exams and what you’ll be licensed to do when you pass.
Tests administered by FINRA
Series 6: Investment company and variable contracts products representative exam
The Series 6 license is a securities license allowing individuals to sell investment products such as mutual funds or variable annuities.
Before you can sit for the exam, a FINRA-member firm must sponsor you. The firm must file a form with FINRA nominating you as a candidate and will pay the examination fee on your behalf.
The Series 6 exam is a 135-minute multiple-choice test. It covers package investment products, economic factors, securities markets, prospecting, securities and tax regulations, and ethics. To pass, you need to achieve 70 percent.
Series 7: General securities representative exam
The Series 7 license is considered the general securities representative license. It authorizes individuals to sell virtually any type of security product, including common and preferred stock, bonds, fixed income investments, call and put options and packaged investment products. The Series 7 license does not cover investment products that require a life insurance license, or real estate and commodities futures
Like Series 6, a FINRA-member firm must sponsor you to take the Series 7.
On October 1, 2018, the Series 7 exam became a three hour and 45-minute test with 125 multiple-choice questions. The test covers investment information, record-keeping, customer’s financial profile and investment objectives, and financial transactions. To pass, you need to achieve a score of 72 percent.
However, as of October 1, 2018, to get your general securities representative license, you also need to take the new FINRA exam, the Securities Industry Essentials (SIE or Essentials) Exam. This introductory exam covers basic securities information such as investment products and their risks, securities markets, regulatory agencies and prohibited practices.
The SIE is a 105-minute exam, with 75 multiple-choice questions. To pass, you need to achieve a score of 70 percent.
Tests administered in conjunction with NASAA
Series 63: Uniform securities agent state law exam
The Series 63 license is the accompanying state license for the Series 6 and 7 licenses. Anyone carrying a Series 6 or Series 7 license must have a Series 63 license in the state where they want to work. The Series 63 license authorizes the licensee to transact business within the state. This exam is not recognized in all states.
The Series 63 test is much shorter than the FINRA exams. It’s a 75-minute test containing 60 multiple-choice questions, covering state securities rules, ethics and fiduciary obligations. To pass, you need to achieve a score of 72 percent.
Series 65: Uniform investment adviser law exam
The Series 65 license is required for any individual providing financial or investment advice on an hourly fee or flat fee basis, not for those who receive a commission-based fee.
The exam is 180 minutes and contains 140 multiple-choice questions. The exam covers registered investment advisers, various investment vehicles, investment analysis, economic factors and ethics. To pass, you need to achieve a score of 72 percent.
Series 66: Uniform combined state law exam
The Series 66 exam combines the Series 63 and the Series 65 into one, 150-minute exam containing 110 multiple-choice questions. It’s only available to individuals who have already received their Series 7 license, so the exam covers no investment topics. However, the exam does cover economic factors, investment strategies, various investment vehicles, ethics, and investment laws and regulations. To pass, you need to achieve a score of 75 percent.
Effective October 1, 2018, FINRA began offering the Securities Industry Essentials (SIE) exam. The SIE exam assesses an individual’s knowledge regarding basic securities industries topics, including the structure of the securities industry, knowledge and understanding of securities products, regulatory agencies and their functions, and prohibited practices.
The SIE exam consists of 75 multiple choice questions, taking 105 minutes to complete. A passing score on the SIE exam is a 70. To take the SIE, individuals are not required to have any prior industry experience. Additionally, individuals can take the SIE exam before receiving a job offer.
Series 79: Investment banking representative exam
As of October 1, 2018, to become a registered investment banking representative an individual must pass both the SIE and Series 79 exams. Series 79 tests knowledge of debt and equity securities offerings – via private placement and public offering – and mergers and acquisitions.
The Series 79 exam consists of 75 multiple choice questions, taking 150 minutes to complete. A passing score on the exam is a 73. Liker other exams administered by FINRA, association with and sponsorship by a FINRA member or other self-regulatory organization (SRO) member firm is required.
If you want to go into the securities or financial industry, you have many options. You can sell securities or give financial advice. Depending on your interests and strengths, a licensing test is out there waiting for you.
Whether you’re looking for a new career, a career enhancement or a career change, you want to make sure you pass your licensing exams with flying colors on the first go around. Securities and Insurance Licensing has a wide range of study products that will prepare you to succeed on any licensing exam you take.