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FINRA Proposes New Industry Licensing Exam Format

FINRA Proposes New Industry Licensing Exam Format - Kaplan Has You Covered!

Posted By: Mark Sanchirico, Senior Editor and Instructor
Updated: October 12, 2017

UPDATE 10/12/17: An effective date for the new Securities Industry Essentials (SIE) Exam has been announced. Read more here

Noting the long history for qualifications exams beginning in 1956, FINRA announced at the 2015 ARM educational conference a proposal to amend how individuals will qualify by exam to be registered at the representative level within the securities industry. The intent of the proposal as described by FINRA is to:

  • Respond to industry and regulatory changes
  • Reduce the redundancy of content across exams
  • Streamline the exam process
  • Minimize impact and change to the registration rules
  • Ensure registered reps have a solid breadth of understanding of the industry

IMPORTANT – If you are a current candidate studying for your representative level license (Series 6, 7, 22, 57, 79, 82, 86/87 and 99) continue your study regimen and test as planned. This posting will be updated to let students know if, when, and how the following proposal impacts current students. Principal level exams are not currently included in the proposal but may be at a later time.

The New Proposal - Securities Industry Essentials and Top Off Exams

Candidates will be permitted to take an industry core exam without first being sponsored by a FINRA member firm. This will be known as the Securities Industry Essentials (SIE) exam.

  • Securities Industry Essentials (SIE) exam:
    • No member firm sponsorship required
    • Number of questions: 100
    • Content: The exam will cover content generally considered stable and subject to little change over time. FINRA notes that his might include but is not limited to; Structure and functioning of the securities  industry, regulatory agencies and their functions, basic economics, product knowledge (stocks, bonds, mutual funds), regulated and prohibited practices and professional conduct.
    • A passing score on the SIE alone would not qualify a person to hold a registered position but would be valid for four years during which to do so.

After passing the SIE exam individuals would require member firm sponsorship to qualify for registration by testing at the registered representative level. These individual license specific representative level exams will be the Top Off exams:

  •  Registered Representative Top-off Exams (Series 6, 7, 22, 57, 79, 82, 86/87 and 99):

Though details for the Top Off exams have yet to be announced, FINRA noted by example the Series 7 General Securities Representative exam. Currently testing candidates on 250 questions, the proposed new Series 7 Top Off exam would be reduced to 150 questions.

Download A Candidate's Complete Guide to the New SIE Exam now to learn more about the new proposed licensing process and SIE exam content.

Timeline for Implementation:

  •  FINRA will publish a Concept Release in a Regulatory Notice this quarter
  •  Registration rule, fee and qualification exam filings would be made with the SEC in late 2015 or early 2016
  •  Implementation of SIE and Series 6, 7 and 79 top off exams would be made in 2016
  •  Remaining top off exams would be implemented later in 2016 and in 2017

Currently Registered Personnel:

Current representative-level qualified persons would maintain registration without the need for additional testing. FINRA notes that most individuals who are currently registered would be considered to have passed the SIE and it would remain valid for 4 years upon leaving the industry. If the registrant returns to the industry:

    Within 2 years, registration would be regained without the need to take the SIE or top off exam
    Between 2 and 4 years later, the SIE need not be taken again, only the top off exam for the registration
    More than 4 years later, both the SIE and the top off exam would need to be taken

As FINRA’s proposal moves forward, Kaplan is committed to keeping you informed of new developments and will continue to assist you with all of your securities industry licensing exam preparation. 

Study well!

A Candidate's Complete Guide to the New SIE Exam Free eBook - Kaplan Financial EducationA Candidate's Complete Guide to the New SIE Exam

After identifying nine series exams with common content (6, 7, 22, 57, 79, 82, 86/87, 99), FINRA has decided to restructure their licensing process next year. The common content will be tested in the new Securities Industry Essentials (SIE) exam. Download this free guide to learn more about how the new securities licensing process will work, the rationale for the change, proposed SIE exam content, and how it could change hiring and recruiting practices.

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