Series 86 and 87 - Research Analyst Examination (RS)
Representative-Level Exam Restructuring
Beginning October 1, 2018 FINRA is restructuring its representative-level qualification exam program by creating the Securities Industry Essentials (SIE) exam and revising the representative-level qualification exams.
The Series 86 and Series 87 exams—the Research Analyst Qualification Examination (RS)—assesses the competency of an entry-level research analyst candidate to perform his or her job as a research analyst representative. The exam measures the degree to which each candidate possesses the knowledge needed to perform the critical job functions of a research analyst, including preparing and analyzing equity securities or individual companies and industry sector research reports.
The Series 86 (Part I) Analysis consists of 100 scored questions and an additional 10 unscored pretest questions. Candidates have four hours and 30 minutes to complete the exam. The passing score is 73 percent.
The Series 87 (Part II) Regulatory Administration and Best Practices consists of 50 scored questions and an additional 5 unscored pretest questions. Candidates have one hour and 45 minutes to complete the exam. The passing score is 74 percent.
Please see NYSE Rule 344 Research Analysts and Supervisory Analysts and NASD Rule 1050 Research Analysts for more information.
The Series 86/87 Content Outline provides a comprehensive guide to the range of topics covered on the exam, as well as the depth of knowledge required. It includes sample questions to acquaint a candidate with the types of multiple-choice questions on the exam.
The outline consists of the four main job functions of a research analyst, with two functions covered in each part of the exam.
Series 86 (Part I) - Analysis
- Function 1 - Information and Data Collection
- Function 2 - Analysis, Modeling and Valuation
Series 87 (Part II) - Regulatory Administration and Best Practices
- Function 3 - Preparation of Research Reports
- Function 4—Dissemination of Information
Download: Series 86/87 Content Outline
The Series 86/87 has a prerequisite exam requirement. Candidates must pass one of the following exams to hold the registration.
A candidate who meets one of the following requirements is permitted to request an exemption from the Series 86 exam (Part I).
- Passed both Level I and Level II of the Chartered Financial Analyst (CFA) Examination
- Passed both Level I and Level II of the Chartered Market Technician (CMT) Certification Examination
For additional information on the Series 86 exemption see the Series 86/87 Content Outline
Please see Register a New Candidate for more information on the registration process.
Covered research analyst activities include preparation of written or electronic communications that analyze equity securities and/or companies and industry sectors.
Taking the Exam
The table below lists the allocation of exam questions for each main job function of a research analyst.
|Part 1 — Series 86: Analysis||Number of Questions|
|Information and Data Collection||10|
|Analysis, Modeling and Valuation||90|
|Part II — Series 87: Regulatory Administration and Best Practices|
|Preparation of Research Reports||32|
|Dissemination of Information||18|
1. What registration and qualification requirements must supervisors of registered research analysts possess?
All registered FINRA research analysts must be supervised by a research principal who will be required, in addition to passing the General Securities Principal (Series 24), to also pass either Part II of the Research Analyst Exam-Regulation (Series 87) or the NYSE Supervisory Analyst Examination (Series 16).
2. Are "sell-side" equity analysts required to register as research analysts and pass the Series 86/87?
Yes. The registration and qualification requirements of Rule 1050 do not distinguish between "sell-side" and "buy-side" analysts. Any person who prepares written or electronic communications that includes an analysis of equity securities and sufficient information upon which to base an investment decision would be required to register as a research analyst.
3. Does NASD 1050 apply to everyone who works in equity research or just those who write a research report that will be seen by the public?
Rule 1050 applies to associated persons who prepare publicly disseminated research reports. Associated persons who prepare reports for use only by a member's sales force, money managers, or other employees of the firm, and who do not have reason to believe that the reports will be redistributed publicly, would not be subject to this rule.
4. Is a research analyst who is employed by a foreign broker/dealer affiliate of a FINRA member required to register pursuant to Rule 1050 if the member uses that analyst's research reports or distributes in the United States in accordance with SEC Rule 15a-6?
A "research analyst" employed by a non-member affiliate of a FINRA member is not required to register as a research analyst pursuant to Rule 1050 unless the research analyst is an "associated person" of the FINRA member as that term is defined in the FINRA By-Laws.
Using Reference Materials
The test administrator will provide whiteboard/dry erase marker and basic electronic calculators to the candidates, which must be returned to the test center administrator at the end of the testing session. Some test questions involve calculations. Only the provided calculators may be used during the examination.
The examination may contain questions that require the use of exhibits (e.g., charts, graphs, tables). If so, the questions will indicate when to refer to an exhibit.
Candidates are not permitted to bring any reference materials to testing sessions. Severe penalties are imposed on candidates who cheat or attempt to cheat on FINRA administered examinations.
To learn more about logistics and protocols for your exam day, please see On The Day of Your Exam.