To become an entry-level broker, one must pass the Series 7 exam, also known as the General Securities Representative Exam. The Financial Industry Regulatory Authority (FINRA) administers the exam. The organization has not placed any limits on the number of times you can attempt to pass the Series 7 exam, and there is no specific education required to take the exam.
- The Series 7 exam is a test a stockbroker must pass if they want to be licensed to trade a variety of securities.
- The test is administered by FINRA and a candidate who wants to take the test must be sponsored by a FINRA member firm; there are also other Series 7 eligibility requirements.
- In addition to the Series 7, candidates also have to pass the Securities Industry Essential (SIE) exam, which tests basic knowledge of the securities industry; it is also administered by FINRA.
- A candidate can take the Series 7 exam as many times as they like; however, for the first three times, the candidate has to wait 30 days before trying again; after the first three attempts, the candidate has to wait six months.
However, there are restrictions on the amount of time that must pass between exam attempts. For your first three attempts at passing the exam, you must wait 30 days after each attempt before trying to pass the test again. For every new attempt after the first three, you must wait a period of six months.
You can take the exam as many times as you want, provided you wait the appropriate amount of time before retaking the test.
The SIE Exam
As of October 2019, candidates are also required to pass the Securities Industry Essential (SIE) exam in addition to the Series 7 exam to become a general securities representative.
The SIE tests a candidate's knowledge of the more basic securities industry information, including the fundamentals of working in the industry.
According to FINRA, the SIE is an introductory-level exam that "assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry, such as types of products and their risks; the structure of the securities industry markets, regulatory agencies and their functions; and prohibited practices."
The Series 7 exam is known formally as the General Securities Representative Qualification Examination.
What Is the Series 7?
Stockbrokers in the United States have to pass the Series 7 exam if they want to earn their license to trade securities. Passing the Series 7 exam allows the stockbroker to trade a variety of securities, except commodities and futures.
Specifically, candidates who pass the Series 7 can trade stocks, mutual funds, options, municipal securities, and variable contracts. Selling real estate or life insurance products would require different licensing.
While having the Series 7 license is important, many states require that registered representatives also pass the Series 63 exam, also called the Uniform Securities Agent State Law Exam.