Registration and Qualification FAQ
Following are frequently asked questions (FAQ) about FINRA registration and qualification requirements. Click on the links below to view all sections of the FAQ. To submit questions that do not appear in this document, please send us an email.
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1. What exam is required to trade certificates of deposit (CDs)?
An individual associated with a broker-dealer must register with FINRA and possess either a Series 7 or a Series 62 registration to effect transactions in CDs that are structured as securities. In general, an ordinary CD issued by a regulated financial institution and insured by the Federal Deposit Insurance Corporation (FDIC) is not considered to be a security. However, the marketing and distribution of a CD may create a security under the federal securities laws, which, as noted above, would require an individual associated with a broker-dealer to possess either the Series 7 or Series 62 license to effect transactions in such products.
2. If I pass a FINRA exam, do I still have to take the Series 63?
Most states require the Uniform Securities Agent State Law Examination (Series 63) of individuals who will transact a securities business. This qualification requirement adds onto FINRA's requirements.
3. Is there a pre-requisite requirement for the Municipal Fund Securities Principal (Series 51) Exam?
An individual seeking to qualify as a Municipal Fund Securities Principal must be qualified as a General Securities Principal (Series 24) or Investment Company/Variable Contracts Principal (Series 26).
1. Where can I go to view the entire list of testing centers for Prometric?
You can visit Prometric's test center location page to search for a current listing of centers, which includes the testing center addresses, phone numbers and directions to each location.
2. I had a technical problem at a center and they cannot reschedule me for two weeks. However, I just found out there is another center close by that has availability. Can I just call the other center to schedule?
You can attempt to make an appointment at the other center. If you are unable to do so, you should contact your registration department. They will in turn contact FINRA to resolve the problem.
3. What happens if I go to the wrong center? Can I still take my exam or do I have to reschedule?
You will need to work with the vendor staff to determine if it is possible to take the exam at that location. Be aware that your firm may be charged a no-show or late cancellation fee by the center that originally reserved your appointment. Complete information can be found on FINRA’s Cancellation Policy page.
4. I called the test center to inquire about my appointment, but they were unable to find it based on my appointment confirmation number. What should I do?
Ask the test center to search for your appointment using your last name, your CRD/FINRA ID number and the examination you are scheduled to take. If the center is still unable to find your appointment, contact your registration department. They can work with FINRA to resolve the problem.
5. My registration department scheduled me at a center I did not want to go to. Can I reschedule the appointment to another center?
Yes, you can contact Prometric to reschedule your appointment.
6. Where can I go for help if I am having problems scheduling or have a complaint about a testing center?
You should contact your firm's Registration Department.
7. What is the sign in procedure for Prometric?
Prometric will scan each testing candidate with a metal detector wand prior to each entry into the testing room.
1. Who is eligible for registration as a foreign associate? What functions may a foreign associate perform at a firm?
A foreign associate is an individual who is not a citizen, national, or resident of the United States or any of its territories or possessions. A foreign associate does not engage in securities activities with or for any resident, citizen, or national of the United States. This person may engage in securities activities for the firm outside the jurisdiction of the United States only.
2. How do I become registered as a foreign associate?
A FINRA-registered firm must submit a Form U4 in Web CRD to request registration as a foreign associate on your behalf. There is no examination requirement associated with this type of registration.
3. In what capacity may a foreign associate act on behalf of a firm?
A foreign associate may act in any registered capacity on behalf of the firm, consistent with his/her designation as a foreign associate. This can include acting as a trader or being the registered person responsible for servicing accounts of a foreign national.
4. In what capacity may a foreign finder act on behalf of a firm?
Foreign finders are not considered associated persons of a firm. The sole involvement of a foreign finder is the initial referral of non-U.S. customers to the firm.
1. Who must register as a representative?
Anyone actively involved in a firm's investment banking or securities business must be registered as a representative with FINRA. Their duties may include supervision, solicitation, or training of persons associated with the member.
[NASD Membership and Registration Rule 1031(b) - Definition of Representative]
2. Who must register as a principal?
Persons associated with a firm, who are actively engaged in the management of the firm's investment banking or securities business, including supervision, solicitation, conduct of business, or the training of persons associated with a member for any of these functions are designated as principals. Such persons shall include:
- Sole Proprietors
- Managers of Offices of Supervisory Jurisdiction, and
- Directors of Corporations.
[NASD Membership and Registration Rule 1021(b) - Definition of Principal]
3. What are the registration and qualification requirements for a FINRA-registered firm's chief compliance officer?
The chief compliance officer must be designated on Schedule A of a firm's Form BD and must be registered as a General Securities Principal (Series 24). If the firm's activities are limited to particular areas of the investment banking or securities business, the chief compliance officer may apply for a limited principal registration, such as the Limited Principal Investment Company and Variable Contracts Products (Series 26), Limited Principal Direct Participation Programs (Series 39), and Government Securities Principal. For more information refer to Notice to Members 01-51.
4. Does FINRA accept the NYSE Compliance Official Examination in lieu of the FINRA qualification examinations?
Yes, to avoid imposing duplicative examination requirements on dual FINRA/NYSE members, FINRA will accept, for purposes of chief compliance officer registration, the NYSE Series 14 Compliance Official examination in lieu of the FINRA Series 24, Series 26, or Series 39 principal examinations. However, note that the chief compliance officers who passed the Series 14 Examination will be required to satisfy the pre-requisite requirement before the general securities principal approval is granted.
5. Can I solicit customer accounts once my firm submits the Form U4 for me to FINRA, but before my registration becomes effective?
No. You may not perform registered representative functions until your registration becomes approved with all regulatory organizations and state securities commissions. You may work in other areas at the firm if the tasks do not require registration.
6. Can I continue to service my customers' accounts before my re-registration becomes effective with my new employer member?
No. You may not transact any securities business until your registration with your new firm is approved.
7. If a friend who is not registered with FINRA refers clients to me, may I pay him a commission for these referrals?
No. You cannot share commissions generated from securities transactions with non-registered individuals.
8. Can I maintain an active registration with two FINRA-registered firms concurrently?
FINRA does not prohibit an individual from maintaining concurrent registrations, but both firms must agree to this arrangement. You must be sure that this dual affiliation does not violate the registration requirements of other self-regulatory organizations or state securities commissions.
9. How long will my qualification examinations be valid after I end my affiliation with a FINRA-registered firm?
You may reactivate your representative or principal exam up to two years after your registration has been terminated. (Note, the two years are calculated from the employment end date with the prior employer or from the CE inactive date.)
[NASD Membership and Registration Rules 1021(c) and 1031(c) - Requirements for Examination on Lapse of Registration]
10. How do I reinstate my registration with FINRA if I've been out of the industry for more than two years?
A FINRA-registered firm must sponsor you and you must re-qualify by examination.
[NASD Membership and Registration Rule 1021(c) and Rule 1031(c) - Requirements for Examination on Lapse of Registration]
11. I passed the Series 7 test. Now I want to join a Direct Participation Program broker-dealer. Will I lose my general securities status if this new firm registers me as a DPP representative?
You may join a DPP broker-dealer without losing your general securities status. This applies to re-registration in any limited representative category.
[NASD Membership and Registration Rule 1031-Registration Requirements]
12. I was a general securities principal. Now I am with a new firm and will only register as a general securities representative. Will I lose my principal status?
If you do not re-register as a principal within two years of your last principal registration, the principal qualification will lapse. You must then retest to function in that capacity in the future.
[NASD Membership and Registration Rules 1031(a) and 1031(c) - Registration Requirements; and Requirements for Examination on Lapse of Registration]
13. I am joining a FINRA-registered firm as a consultant to hold public seminars promoting its products and services. Should I register since this firm does not technically employ me?
The activity described requires registration as a representative or principal. Your employment status does not affect your involvement in the firm's investment banking or securities business.
[NASD Membership and Registration Rules 1020 and 1030 Registration of Principal and Representative]
14. I am an independent contractor (not an employee) of a large insurance company. I refer potential customers to this firm. Should I become registered?
Under NASD rules, job performance determines the registration requirement. You must therefore be registered if you solicit client accounts for a firm regardless of the terms of your contract with this firm.
[NASD Membership and Registration Rule 1021(b) and Rule 1031(b) - Definition of Principal and Definition of Representative]
15. Can a firm hire unregistered individuals whose sole function will be to cold call potential customers?
FINRA-registered firms may employ unregistered individuals for the purposes of:
- Extending invitations to firm-sponsored events at which presentations and account or order solicitation will be conducted by appropriately registered personnel;
- Inquiring whether the prospective customer wishes to discuss investments with a registered person;
- Determining whether the prospective customer wishes to receive investment literature from the firm.
The firms employing unregistered persons to perform these functions must be sure these employees do not discuss general or specific investment products or services offered by the firm, prequalify prospective customers as to financial status, investment history, and objectives, or solicit new accounts or orders.
[NASD Membership and Registration Rule 1031(b) - Definition of Representative]
16. While registered with firm "A," can I sell limited partnership interests for non-member firm "B" in a private placement?
To participate in a private securities transaction, you must provide your firm written notice describing the proposed transaction and your role in this activity. You must also notify your firm whether you have received or will receive selling compensation in connection with the transaction. The firm must provide you a written statement advising whether it approves or disapproves your participation in the proposed transaction. If the firm allows such activity, the firm must record the transaction(s) on its books and records. The firm must also supervise your participation in the transaction.
[FINRA Rule 3280 - Private Securities Transactions of an Associated Person]
17. A broker-dealer wants to employ me to sell securities only to institutions. I will not have any retail customers. Do I have to register with FINRA?
Yes. Under FINRA rules anyone associated with a firm who engages in the investment banking or securities business for the firm must register. The rules do not distinguish between retail and institutional securities customers.
[NASD Membership and Registration Rules 1021 and 1031 - Registration Requirements for Principals and Representatives]
18. Do I need to register if I will only be selling exempt securities?
Yes. The terms "Exempt Securities" and "Exempt Transactions" mean these particular securities or transactions (private placements or intrastate offerings) are exempt from the filing requirements of the Securities Act of 1933. Anyone dealing with Exempt Securities and/or Exempt Transactions, however, must register.
[Securities Act of 1933 Sections 3 and 4]