Qualifications

An Explanation of FINRA Registration and Qualification Requirements

 

Any person associated with a member firm who is engaged in the securities business of the firm—including partners, officers, directors, branch managers, department supervisors, and salespersons—must register with FINRA. The registration application requires information about the individual's prior employment and disciplinary history. FINRA prescribes two basic levels of qualification and registration:

• Registered representatives, generally sales personnel.
  
  
• Principals, generally officers of the firm and other management personnel involved in the day-to-day operation of the firm's investment banking or securities business.
  
  
• More information about the Central Registration Depository (CRD)^®.
• • Current Uniform Forms and Instructions

As part of the registration process, securities professionals must pass an examination administered by FINRA to demonstrate competence in the areas in which they will work. These mandatory qualification examinations cover a broad range of subjects on the markets, as well as the securities industry and its regulatory structure, ensuring a minimum level of understanding and expertise. The areas in which candidates are tested include federal securities laws; Securities and Exchange Commission and FINRA rules and regulations; securities products; the operation and interrelation of financial markets; economic theory and kinds of risk; corporate financing, accounting, and balance sheet analysis; portfolio theory and analysis; fair sales practices, including solicitation and presentation; types of customer accounts; and tax treatment of various investments.

 

Prospective principals of securities firms must pass additional examinations that test their knowledge of supervisory rules in the areas of investment banking, trading, and market making; retail sales activities; and financial responsibility rules. Financial and operational principals must further demonstrate a thorough knowledge of the requirements regarding recordkeeping, net capital, customer reserves, financial reporting, and credit.

 

FINRA administers and delivers all FINRA qualifications examinations as well as examinations sponsored by NYSE, NASAA, NFA, MSRB and FDIC.