Posted by: Mark Sanchiro, Senior Securities Editor
Published: October 2, 2018
With the advent of the Securities Industry Essential (SIE) exam, FINRA has restructured their examination programs into a new format. All new representative-level applicants will be required to take the SIE exam, and a tailored, specialized knowledge examination (a representative-level qualification examination) for their particular registered role.
As part of the 2018 restructuring process, FINRA has created a tailored top-off examination for earning the Series 7 license. The new Series 7 tests knowledge relevant to the day-to-day activities, responsibilities, and job functions of general securities representatives.
Fees—The cost of the exam is $245. (When you combine it with the $60 fee for the SIE, the cost becomes the same as in the past.)
Number of Questions—The exam consists of 125 multiple-choice questions (down from 250), and each question consists of four answer choices. Each candidate’s exam includes 10 additional, unidentified pretest questions that do not contribute toward the candidate's score. The pretest questions are randomly distributed throughout the exam. Therefore, each candidate will see a total of 135 questions (125 scored and 10 unscored).
Allowed Time to Complete Exam—Candidates are allowed 3 hours and 45 minutes to complete the Series 7 exam. (The exam used to be 6 hours.)
Scoring—The passing score is 72%. (This is the same as the passing score for the previous exam.) Candidate test scores are placed on a common scale using a statistical adjustment process known as equating. Equating scores to a common scale accounts for the slight variations in difficulty that may exist among the different sets of exam questions a candidate receives. This allows for a fair comparison of scores and ensures that every candidate is held to the same passing standard regardless of which set of exam questions they received.
Content Outline—FINRA has also made changes to the major job functions that are done by a General Securities (Series 7 licensed) Representative. The following are the revised job functions (1 through 4) with the associated number of questions:
|Function Description||% of Exam||# of Questions|
|1 - Seeks Business for the Broker Dealer from Customers and Potential Customers||7%||9|
|2 - Opens Accounts after Obtaining and Evaluating Customers' Financial Profile and Investment Objectives||9%||11|
|3 - Provides Customers with Information About|
Investments, Makes Suitable Recommendations,
Transfers Assets and Maintains Appropriate Records
|4 - Obtains and Verifies Customers’ Purchase and Sales|
Instructions and Agreements; Processes, Completes
and Confirms Transactions
In each function, the questions on the Series 7 examination emphasize “tasks.” There are two tasks (1.1–1.2) associated with Function 1, four tasks (2.1–2.4) associated with Function 2, four tasks (3.1–3.4) associated with Function 3, and four tasks (4.1–4.4) associated with Function 4.
For example, one such task (Task 1.1) is specified as: “Contacts current and potential customers in person and by telephone, mail and electronic means; develops promotional and advertising materials and seeks appropriate approvals to distribute marketing materials.”
Further, the content outline lists the knowledge required to perform each function and associated tasks (e.g., Standards and required approvals of public communications) and lists the laws, rules, and regulations a candidate is expected to know to perform each function and associated tasks (e.g., FINRA Rule 2210—Communications with the Public).
The introduction of the SIE exam will also have an effect on Series 6, 79, and 99. Learn more about the changes coming to these exams in this article. You can also check out all the education and exam preparation packages Kaplan offers for securities licensing here.
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.