In exceptional cases, FINRA may waive qualification examinations, pursuant to FINRA Rule 9600 Series, and accept other standards as evidence of an applicant’s qualification for registration, such as experience in the securities industry and educational achievement, among others. FINRA exercises its waiver authority where good cause is shown by the member requesting a waiver for one of its associated persons.
It is important to note that advanced age or physical infirmity alone will not constitute sufficient grounds to waive a qualification exam. However, an applicant’s experience in a field ancillary to the investment banking or securities business may constitute grounds to waive an exam.
FINRA reviews each waiver request on its individual merits and considers all relevant facts presented by the sponsoring firm. Below are some of the most common types of waiver requests we’ve observed over the years, which can assist you in recognizing situations in which a basis may exist for requesting a waiver.
Waiver Request Types
- Requests Based on Registration Filing Errors
These involve individuals working in good faith as representatives or principals in firms, but their registrations, for reasons related to the filing of the appropriate application forms, are not reflected in Web CRD. FINRA may waive the exam for such an individual provided the firm documents the filing error and confirms the individual has in good faith engaged in the securities business.
- Requests Based on Experience
These requests take into account an individual’s experience in the securities industry and/or in related investment fields. These include investment banking, securities trading on behalf of a financial institution, securities research, portfolio management, investment advisory services or securities activities in a foreign broker-dealer.
- the length and quality of the applicant's securities industry experience or professional experience in investment related fields;
- the specific registration the applicant requests and the type of business to be conducted in relation to the applicant's experience;
- the applicant's previous registration history, if any;
- the nature of any regulatory matters of which the applicant is or was a subject, including any such matters that are disclosed on the applicant's Central Registration Depository record;
- the applicant's age or physical condition if this is part of the basis for the waiver request, but only in conjunction with experience and other factors above;
- other examinations taken by the applicant, such as those for Certified Financial Planner or Chartered Financial Analyst, that may be acceptable substitutes in conjunction with experience and other factors above, for the normal securities industry qualification examination.
- Requests Based on Educational Achievement
FINRA will consider waiver requests from individuals who terminate their registrations and enroll in a master’s or law program that substantially emphasizes finance and investments, and then promptly return to a firm after completing their studies.The applicant must return to a member firm promptly after completing the course of study and furnish a copy of the course transcript with the waiver request.
- Requests Based on Regulatory Experience
Individuals previously registered with a firm, whose most recent employment has been with a securities regulatory agency, may seek a waiver to have their registration reinstated. Those with no prior securities registration must have at least five years of regulatory experience for a waiver request to be considered.
State Regulatory Agencies
While FINRA can grant qualification examination waivers for its requirements, it cannot make decisions in these matters for other regulatory agencies. Most applicants are subject to state licensing and qualification requirements in addition to FINRA requirements. Member firms must pursue waivers from these requirements, including NASAA's Series 63, Series 65 and Series 66 examinations, in each state where the applicant will be licensed.
Submitting requests for Exam Waivers, Series 86 Exemptions and Series 16 Experience Acceptability
Requests for qualification examination waivers, Series 86 exemptions, and Series 16 experience acceptability must be submitted by a member firm on behalf of the applicant. Requests by individuals will not be considered. The request must be submitted via the Firm Gateway at https://firms.finra.org/examwaivers.
Each firm's primary account administrator for Web CRD has waiver submission entitlement privileges. Account administrators that do not have entitlement privileges can request them through the firm’s Super Account Administrator (SAA) (see FINRA Entitlement Page).
Process for submitting waiver requests, Series 86 exemption requests, and Series 16 experience acceptability requests
The member firm uses one online form to submit examination waivers or Series 86 exemption requests and a second online form to request Series 16 experience acceptability. Requests filed in a paper or email format will not be accepted. The system allows firms to attach supporting documentation to such requests.
For all examination waiver requests, Series 86 exemption requests, and Series 16 experience acceptability requests, firms must submit a Uniform Application for Securities Industry Registration or Transfer (Form U4) electronically via the CRD at least one business day prior to submitting such requests via the Firm Gateway. The Form U4 must request an open examination window for each examination requested waived or exempted, and each Series 16 experience acceptability request.
For qualification examination waiver requests, the member firm must provide:
- Applicant's CRD Number;
- Qualification examination(s) for which the waiver is being requested;
- Reason for the waiver request; and
- Documentation supporting the waiver request.
For Series 16 experience acceptability requests, the member firm must provide:
- Applicant's CRD Number;
- Statement on applicant's experience;
- Whether applicant is a Chartered Financial Analyst; and
- Whether applicant intends to take Part 1, Part 2 or both parts of the Series 16 examination.
For Series 86 exemption requests, the member firm must provide:
- Applicant's full name;
- Applicant’s CRD number;
- Applicant’s Date of birth
- CFA Institute ID number or CMT ID number
Requests for additional information by FINRA will be conveyed by FINRA via email. Firms are to reply to the email with the additional information requested.
Disposition of Waiver Requests
A waiver request may be unconditionally granted, conditionally granted or denied. Unconditional waivers represent only a small fraction of the waivers granted. Most waivers of registered representatives' examinations are conditional on the applicant successfully completing a Regulatory Element training session pursuant to FINRA Continuing Education Rule 1250. Principal examinations are rarely waived.
Notification of decision on waiver requests and Series 86 Exemption Requests
Effective August 18, 2014, FINRA will convey its decision on the request via email. The applicant must satisfy any conditions attached to a waiver before the applicant's registration will become effective. Decision letters for waiver requests and Series 86 exemption requests will be delivered via email to the email address provided by the firm on the waiver request form in Firm Gateway.
Disposition of Series 86 Exemption Requests and Series 16 Experience Acceptability Requests
A Series 86 Exemption request may be granted or denied. A Series 16 Experience acceptability request may be granted or denied.
Exam Waiver Appeals
A member firm may appeal an exam waiver decision on behalf of the applicant within 15 calendar days after receipt of the decision. Any such appeal should be submitted in the form described in FINRA Rule 9630 to:
Office of the General Counsel
FINRA Regulatory Practice and Policy
Exam Waiver Appeals
1735 K Street, NW
Washington, DC 20006
Attention: Megan Rauch
Questions regarding the waivers process
Individuals who have questions regarding the waiver process should be directed to the registration and licensing group in their member firms. Questions member firms have regarding the waiver process may be directed to Lakeisha Prather at (240) 386-4681.