How to Get Your Series 7 License

Posted By: Kaplan Financial Education
Updated: April 6, 2018 

The Series 7 license, known as the General Securities Registered Representative license, allows you to sell a broader range of securities. A holder is allowed to sell corporate stocks and bonds, municipal bonds, mutual funds, variable annuities, options, direct participation program (DPP) partnerships, and packaged securities (i.e., collateralized mortgage obligations).

The Series 7 is a more comprehensive license than the Series 6, and is generally preferred by banks and broker dealers for new recruits coming directly into the financial services industry. Those who get this license are officially listed as registered representatives by FINRA, but are more commonly referred to as stockbrokers.

The process for obtaining your Series 7 license is different today than it will be when FINRA implements the new Securities Industry Essentials (SIE) exam in early 2018. This article provides the process now, as well as the likely process in the future with the SIE exam.

How to Get the Series 7 License (Current State)

To get your Series 7 license, you must be sponsored by a FINRA member firm or a self-regulatory organization (SRO). Like the Series 6, sponsoring firms apply for candidates to take the exam by filing a Uniform Application for Security Industry Registration or Transfer (Form U4). There is an exam fee that is typically covered by the sponsoring firm.

The exam consists of 250 questions and is given in two 3-hour segments. You must score 72% or higher to pass the exam. The exam covers the five main job functions of a Series 7 representative:

• Seeks businesses for the broker-dealer through customers and potential customers
• Evaluates customers’ other security holdings, financial situation and needs, financial status, tax status, and investment objective
• Opens accounts, transfers assets, and maintains appropriate account records
• Provides customers with information on investments and makes suitable recommendations
• Obtains and verifies customers’ purchases and sales instructions, enters orders, and follows up

How to Get the Series 7 License (Future State After SIE Exam Implementation)

In the new exam structure, a candidate for the Series 7 license will first need to take FINRA’s new SIE exam. The SIE exam will test common content that is currently being covered across eight different FINRA Series exams (Series 6, 7, 22, 57, 79, 82, 86/87, 99). The SIE exam will cover topics like fundamentals, regulatory agencies and their functions, product knowledge, and acceptable and unacceptable practices. In the future state, a candidate will no longer have to be sponsored by a member firm or self-regulatory organization (SRO) to take the SIE exam.

After passing the SIE exam, candidates will need to be sponsored by a member firm or self-regulatory organization (SRO). Once a candidate has passed the SIE exam and is sponsored, they can then take the top-off exam for the Series 7 license.Candidates will have a four-year window in which to take and pass any of the representative level top-off exams after passing the SIE exam. The Series 7 top-off exam will be shorter than it is currently; FINRA has reduced the number of questions asked on the Series 7 exam from 250 to 150. The exam details are still being finalized, but we will continue to update this article as we gain more information.

Ready to start your Series 7 licensing exam prep? Learn more about our live and online study options and to purchase a Series 7 exam prep package on our website.

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