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New FINRA Exam to Open Doors to Financial Industry

Looking to break into the financial services industry? You may have new opportunities thanks to the new Securities Industry Essentials (SIE) exam.

"The goal of the new exam is to
develop a more efficient format,
reduce overlap in the licensing
exams and ensure content is
relevant to the way the industry
does business today."

The Financial Industry Regulatory Authority announced earlier this month that it received U.S. Securities and Exchange Commission approval to streamline its competency exams, creating new opportunities for individuals seeking to enter—or re-enter—the securities industry. With the rollout of the SIE exam, FINRA has restructured its exam program to eliminate duplicative testing of general securities knowledge by moving such content to the SIE exam.

"The goal of the new exam is to develop a more efficient format, reduce overlap in licensing exams, and ensure content is relevant to the way the industry does business today," said Joe McDonald, a senior director with FINRA's Testing and Continuing Education group.

These changes are a part of FINRA360, the comprehensive self-evaluation and organizational improvement initiative FINRA President and CEO Robert Cook started earlier this year to ensure FINRA is operating as effectively as possible.

The new exam, available beginning October 1, 2018, will be open to anyone over the age of 18, including students and prospective candidates interested in demonstrating basic industry knowledge to potential employers. The biggest change: you don't have to be associated with a financial firm to take the exam.

"Traditionally, people needed to be hired by a brokerage firm and then take a qualification exam to get a registration," said Alexandra Toton, an associate director with FINRA's Testing and Continuing Education group. "Now they have options."

That means a college student hoping to land an internship, or a mid-career professional looking for a change, can use this exam to demonstrate interest in the securities industry and basic industry knowledge to potential employers before they even apply for a job.

The exam will test concepts fundamental to working in the securities industry, such as types of investment products and their risks; the structure of the securities markets, regulatory agencies and their functions; and prohibited practices. And a passing result will be valid for four years.

But passing the SIE exam alone does not qualify an individual for registration with FINRA or to engage in the securities business. The SIE exam is just your first foot in the door.

FINRA Exam Program Remains Rigorous

The next steps toward becoming a registered broker include getting hired by a FINRA-regulated firm and being sponsored by that firm to take a job-specific qualification exam. The SIE exam covers the essentials, and other exams will test more business-specific knowledge.

FINRA is revising the Series 6 and the Series 7 exams, as well as several other exams, to test only the additional knowledge appropriate for those registrations. But the level of difficulty and standard of competency of the exams remain unchanged.

These representative-level qualification exams remain an essential part of the FINRA registration process, and a firm must not only sponsor its employees in this process, but also ensure oversight and compliance throughout the individual's career with the firm.

"We really took a step back to look at the entire program to identify what's the best structure for how the industry is performing today," said John Kalohn, vice president with FINRA's Testing and Continuing Education group. "And this is it."

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