In early 2015, the Financial Industry Regulatory Authority (Finra), the largest U.S. securities regulator, published a concept release detailing a proposed restructuring to the securities qualification exam process. Currently, individuals seeking to become registered to sell securities in the U.S. are required to be sponsored by a broker-dealer and subsequently pass an exam. It is not currently possible to take a Finra exam without sponsorship.
Major change in Finra exam structure
Under the proposed restructuring, Finra will release an entry-level exam, known as the Securities Industry Essentials Exam (SIE), or the “Essentials” exam. Significantly, anyone will be able to take the Essentials Exam – it will not require sponsorship by a U.S. broker-dealer.
The SIE Exam will be a multiple-choice exam, with four answer choices per question. The exam will test your general securities knowledge, and the exam results will be provided immediately upon completion. Those who do not pass the SIE Exam will need to wait 30 days to take it again.
You will be able to prepare for the SIE Exam with dedicated study materials and practice exams. And you will need to demonstrate your mastery of the testable content and answer questions that test your ability to apply your knowledge of the content in a variety of scenarios.
Next step after passing the SIE exam
Upon successfully completing the SIE, you will need to take a specialized knowledge examination in order to become fully registered with his or her Finra member firm employer. Different specialized knowledge examination exams will be available, depending on the area or role the individual will be working in.
For example, if you are seeking to become a stock broker, you would need to pass the SIE plus the Series 7 top-off exam.
The Essentials exam will serve as a prerequisite for several Finra registration categories, including the Series 7 and 79, as well as the Series 6, 22, 57, 82, 86/87 and 99.
Once you successfully complete the SIE exam, you will have four years to complete the appropriate specialized knowledge exam to associate with a member firm and hold a registered position.
The Essentials exam has potential benefits for financial services professionals. It will open up the door to people who may be looking to demonstrate their interest in the securities business to potential employers, including current college students, career-changers, people who have been out of the industry for a few years, and current employees who want to raise their profile for promotion.
Getting back in the game by taking a new exam
What about those who were previously employed in the securities industry and have since left but wish to return? There are rules that apply to people who may have recently left the business.
- If it’s been less than two years since your last registered position, you will not need to take additional examinations.
- If you have been away from the industry for more than two years but less than four years, you will need to take the appropriate specialized knowledge exam, but not the SIE.
- If you have been away from the industry for more than four years, you will need to take both the SIE Exam and the appropriate specialized knowledge exam.
- The new SIE Exam will provide an exciting opportunity for anyone who wants to become registered with a securities industry firm and launch a fruitful career on Wall Street.
Finra recently filed the exam restructuring rule with the SEC. Currently, the Essentials Exam is anticipated to be released in March 2018, pending SEC approval.
Length of the SIE Exam and top-offs
• SIE Exam – 75 questions
• Series 6 – 50 questions
• Series 7 – 125 questions
• Series 22 – 50 questions
• Series 57 – 50 questions
• Series 79 – 75 questions
• Series 82 – 50 questions
• Series 86/87 – 100/50 questions respectively
• Series 99 – 50 questions
Brian Marks is a managing director at Knopman Marks Financial Training, a qualification exam training firm.
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