Posted By: Doug Vincens
Published: January 25, 2018
If you’re planning to earn your first securities license in the near future, you’ve likely heard FINRA is creating a new exam called the Securities Industry Essentials (SIE) exam. We continue to receive an increasing number of questions about this new exam and how it will affect the securities licensing process. This article will address the most frequently asked questions and arm you with the information you need to plan for this next step in your career.
The SIE exam is FINRA's new general industry knowledge exam testing basic information such as products, risks, the structure and function of the securities industry and its regulatory agencies, and knowledge of regulated and prohibited practices. Although ideal for university students and career changers, anyone can sit for the exam without prior association with a firm.
In an effort to make it easier to start a financial services career or to simply prove mastery of basic industry knowledge, FINRA does not require sponsorship with a firm to sit for the SIE exam. However, to become registered with FINRA and seek a representative level role with an employer, candidates must also pass a revised, specialized knowledge qualification exam (or "top-off"), applicable to their job function with the firm.
Yes! With a low exam fee ($60) and no firm sponsorship requirement, the SIE exam is ideal for university students looking to get a head start on a financial services career, and most importantly stand out to potential employers by proving mastery of basic industry knowledge and the ability to pass a high-stakes examination.
FINRA has set an implementation date of October 1, 2018. The SIE exam will be available at all Prometric testing centers. Look for Kaplan materials to be available starting in the summer of 2018.
Based on FINRA Regulatory Notice 17-30, the following individuals will be considered to have passed the SIE exam: (1) individuals whose registration as a representative was terminated between October 1, 2014, and September 30, 2018, provided they re-register as a representative within four years from the date of their last registration; and (2) individuals who registered as representatives prior to October 1, 2018, and who continue to maintain those registrations on or after October 1, 2018. All other individuals seeking representative-level registration must pass the SIE exam, unless they obtain a waiver.
Like all other securities licensing exams, the SIE will be adminstered by computer at a Prometric testing center.
The range of topics covered on the SIE exam include:
The SIE exam will contain 75 multiple-choice questions, plus 10 additional experimental questions. The breakdown is as follows:
|Sections||% of Exam||# of Exam Questions|
|Knowledge of Capital Markets||16%||12|
|Understanding Products and their Risks||44%||33|
|Understanding Trading, Customer Accounts and Prohibited Activities||31%||23|
|Overview of Regulatory Framework||9%||7|
The SIE is ideal for individuals looking to get a head start on a financial services career, and stand out to current or potential employers by proving mastery of basic industry knowledge and the ability to pass a high-stakes examination.
Passing the SIE exam alone will not qualify an individual for registration with FINRA. They will also need to pass a revised, specialized knowledge qualification exam (or "top-off") applicable to the desired job function with a firm, and meet other registration requirements.
For individuals looking to start a financial services career, the first step will be passing the SIE exam. Then, to become registered with FINRA and seek a representative level role with an employer, candidates must also pass a revised, specialized knowledge qualification exam (or "top-off") applicable to their job function with the firm.
The rules for retaking the SIE exam will be exactly as they are for Series-specific exams today. After your first attempt, you will be required to wait 30 days before retaking the test. After your second attempt, you will again have to wait 30 days to retake the exam. After your third failing attempt, you are required to wait 180 days before retaking the exam.
After passing the SIE exam, a candidate has up to 4 years to pass the representative-level "top-off" exam for registration with FINRA and association with a firm.
The SIE exam will act as a prerequisite exam—to become registered with FINRA and seek a representative level role with an employer, candidates must also pass a revised, specialized knowledge qualification exam (or "top-off") applicable to their job function with the firm. FINRA is modifying the number of questions required for these new exams from the current exams, as detailed in the comparison chart below.
|Before October 1, 2018||Registration Category||As of October 1, 2018|
|Series 6: 100 Questions||Investment Company Represent (IR)||Series 6: 50 Questions|
|Series 7: 250 Questions||General Securities Representative (GS)||Series 7: 125 Questions|
|Series 22: 100 Questions||DPP Representative (DR)||Series 22: 50 Questions|
|Series 57: 125 Questions||Securities Trader (TD)||Series 57: 50 Questions|
|Series 79: 175 Questions||Investment Banking Representative (IB)||Series 79: 75 Questions|
|Series 82: 100 Questions||Private Securities Offerings Representative (PR)||Series 82: 50 Questions|
|Series 7 + Series 86 + Series 87: 250 Questions + 100 Questions + 50 Questions||Research Analyst||Series 86 + Series 87: 100 Questions + 50 Questions|
|Series 99: 100 Questions||Operations Professional (OS)||Series 99: 50 Questions|
The revised representative-level qualification exams will test knowledge relevant to day-to-day activities, responsibilities, and job functions of representatives. In February 2018, FINRA released the content outlines for the top-off exams. To ensure our students are informed, we have developed additional articles to explain the differences between current and future exams for Series 7, as well as the Series 6, 79, and 99 Exams.
Hopefully this article answers all of your questions about the SIE Exam, and how it affects your securities licensing process. If you're looking for more information, you can access our SIE Information Center. We've also created FAQs for universities and businesses to answer SIE-specific questions.
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.