WASHINGTON – Starting Monday, October 1, FINRA will offer a new qualification exam—the Securities Industry Essentials (SIE)—for prospective candidates seeking to enter or re-enter the securities industry.
The SIE will assess a candidate’s knowledge regarding fundamental securities-related topics, including knowledge of basic products, the structure and function of the securities industry, the regulatory agencies and their functions, and regulated and prohibited practices.
“As part of our mission to protect investors and the integrity of markets, FINRA ensures that all registered representatives working in the securities industry have the requisite knowledge to serve their clients,” said Robert Cook, President and CEO of FINRA. “Our new exam structure will bring greater consistency and uniformity to the process for entering or returning to the securities industry. It will also provide more people the opportunity to explore career options in the securities industry.”
Anyone 18 or older can take the SIE, which costs $60. The SIE is multiple-choice, consists of 75 questions and test takers have one-hour and forty-five minutes to complete the exam. A passing result on the SIE is valid for four years. Candidates are not required to have any prior industry experience and they can take the SIE before they have received a job offer from a firm.
FINRA administers qualification examinations designed to establish that individuals employed by broker-dealers have attained specific levels of competence and knowledge pertinent to the industry. Over time, the qualification examination program has increased in complexity to address new products and functions, and related regulatory concerns and requirements. As a result, there are currently 16 representative level exams, with considerable content overlap across them. The restructured program, which aligns with FINRA’s goal of creating efficiencies through FINRA360, is designed to eliminate duplicative testing of general securities knowledge on the current set of exams by moving that content into the SIE exam.
In addition to the SIE, in order to become a registered representative at a FINRA member firm, applicants will still need to take a revised Series 6, Series 7 or other qualification exam, appropriate to their prospective job functions. Candidates must also satisfy other requirements relating to the registration process, including a background check.
The “top off” exams were also restructured to reflect the consolidation of general knowledge questions into the SIE. For example, the Series 7 previously had 250 questions. The revised exam will have 125 questions. The combined cost of the SIE and a revised “top off” qualification exam will, for most exams, remain the same.
Most registered representatives who have already taken qualification exams, such as the Series 6 and Series 7, will not need to take the SIE. Additionally, if a representative wishes to add an additional registration they will generally not need to take the SIE, only the job function-specific qualification exam. For example, if a registered representative has already passed the Series 7 and wishes to do investment banking, he or she will only need to take the Series 79 exam.
“FINRA has eliminated duplicative testing of general securities knowledge on the representative-level exams by moving such content into the SIE,” said John Kalohn, FINRA’s Vice President for Testing and Continuing Education. “The SIE provides candidates the opportunity to demonstrate their mastery of the fundamental knowledge about the securities industry. We believe this is an important step in the process of qualifying to become registered in the securities industry.”
As part of the consolidation of the FINRA registration rules, individuals who transfer to a financial services affiliate of a firm may qualify for a waiver that allows their credentials to be reinstated, should they return to the industry within a seven-year period and meet the requirements of the waiver program. Additional details on the waiver program can be found in the Qualification and Registration Requirements Frequently Asked Questions.
In addition, FINRA is expanding permissive registrations, allowing firms to permissively register or maintain the registration of individuals functioning as associated persons, including individuals working solely in a clerical or ministerial capacity for a firm. This process is subject to the conditions specified in Regulatory Notice 17-30.
The Securities and Exchange Commission approved these changes in July 2017, with an effective date of October 1, 2018.
To enroll to take the SIE exam or to learn more about the SIE exam and FINRA’s other qualification exams, visit http://www.finra.org/industry/essentials-exam.
FINRA is a not-for-profit organization dedicated to investor protection and market integrity. It regulates one critical part of the securities industry – brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit www.finra.org.