Registered representatives, also known as brokers, represent clients in the trade of investment products such as stocks, bonds, and mutual funds. The “registered” part of the title refers to the fact that the sponsoring firm and the individual are licensed with the Financial Industry Regulatory Authority (FINRA). Individuals cannot be registered representatives if they and their firm are not licensed.
In 2018, FINRA initiated a new introductory step in the process of earning a securities license and becoming a registered representative in the form of a new exam called the Securities Industry Essentials (SIE) exam. If you are seeking a securities license with an exam window that opens after October 1, 2018, you will be required to pass the SIE exam plus the qualification (series-specific) exam required for the type of business you plan to engage in.
Many people have questions about the new SIE exam, and here are a couple big things to know. First, the SIE exam tests on a number of topics formerly tested on multiple series-specific exams. Second, you do not need to have a sponsoring broker to sit for the SIE exam. With this move, FINRA is reducing duplicative testing of general knowledge and making it easier for individuals to begin the process of becoming a registered representative.
Once you’ve passed the SIE exam, your firm must file a Uniform Application for Securities Industry Registration or Transfer. The form is often referred to as Form U4. This form collects administrative and disclosure information. It’s important that all of the information in your Form U4 is accurate and always up-to-date. Otherwise, FINRA can take regulatory action against you, your firm, or both.
Before registering for your first securities examination, you need to know the type of work you’ll be doing and the license that covers it. Your sponsoring broker will likely have a very specific exam in mind for you to begin with, based on the work you’ll be doing. Check out this article detailing the most common securities licenses and what each license qualifies holders to do.
Once you’ve decided on an exam, your sponsoring broker is required to file an application for you through FINRA’s CRD system. FINRA’s approval of that application opens a 120-day testing window. FINRA suggests you schedule your exam as far in advance as possible to ensure you get your desired date. There are a few things the scheduling center will need from you in order to schedule your exam:
Once you’ve scheduled your exam, it’s time to turn your attention toward studying and preparing for success. Look for an exam prep provider with a proven history of success preparing candidates for success with securities licensing exams. Many exam prep providers offer live, online, and self-study options for you to choose.
Finally, it’s time to put your hard work to the test on exam day. All of the test-taking tips you’ve practiced throughout your life are equally valid when it comes to preparing to be successful for a securities exam. Get plenty of sleep the night before. Make sure you eat a balanced breakfast the morning of the exam. Arrive early and approach the task at hand with confidence. You’ve done the preparation—now it’s time to pass the exam and earn your reward as a newly licensed registered representative.
You now have the basic steps you need to complete to become a registered representative. For more information on starting your new career, check out FINRA’s Registered Representatives Brochure. You can also find more helpful articles in Kaplan’s Career Corner.
After identifying nine series exams with common content (6, 7, 22, 57, 79, 82, 86/87, 99), FINRA decided to restructure their licensing process. The common content is now tested in the new Securities Industry Essentials (SIE) exam. Download this free guide to learn more about how the new securities licensing process works, the rationale for the change, SIE tested exam content, and how it could change hiring and recruiting practices.