Securities Essential Exam Update

By:  John Keir
 

March 2018

UPDATE ON SIE EXAM AND “TOP OFF” EXAMS

FINRA has released the outlines for the Series 6 and Series 7 “Top Off” exams.   Since the SIE (Securities Industry Essentials) exam is covering the general securities knowledge, basic terminology, and the functioning of the markets, the “Top Off” exams will test the more specific information required for the Series 6 and 7 licenses. 

The Series 6 is intended for a person new to the industry and measures their knowledge to handle the job responsibilities of an Investment Company and Variable Contracts Products Representative.  The Series 7 exam is for the entry level employee who will be a General Securities Representative.

SERIES 6 “TOP OFF” EXAM

The Series 6 “Top Off” exam will have 50 multiple choice questions plus 5 questions that FINRA is pre-testing for future exam use.  All questions have 4 options.  Students will have 1 hour and 30 minutes to complete the exam.  The questions will be divided as follows:

FUNCTION

Descriptions

Percent of exam

Number of Questions

1

Seeks Business for the Broker-Dealer from Customers and Potential Customers

24%

12

2

Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment

Objectives

16%

  8

3

Provides Customers with Information About Investments, Makes Suitable recommendations, Transfers Assets and Maintains Appropriate Records

 

50%

25

4

Obtains and Verifies Customers’ Purchase and Sales

Instructions; Processes, Completes and Confirms

Transactions

 

10%

  5

(from FINRA.org)

SERIES 7 “TOP OFF” EXAM

The Series 7 “Top Off” exam will have 125 multiple choice questions, plus 10 questions that FINRA is pretesting for future exams.  These questions also will have 4 options.  Candidates have 3 hours and 45 minutes for this exam.    The questions fall into the following topics:

FUNCTION

Descriptions

% of Exam

Number of Questions

  1

Seeks Business for the Broker-Dealer from Customers and Potential Customers

  7%

9

  2

Opens Accounts After Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives

  9%

  11

  3

Provides Customers with Information About Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records

  73%

  91

  4

Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes and Confirms Transactions

  11%

  14

(From FINRA.org)

 The entire outlines for both Series 6 and 7 Top Off exams are available on the FINRA website.  Study materials will be available this summer in preparation for the October start date. 

If you have any candidates that are Series 6 licensed and are considering pursuing the Series 7 license, they might like to know that after October 1, the Series 6 will be accepted as the completion of the SIE exam, and he or she will only be required to take the Series 7 “Top Off” exam to qualify for Series 7 licensure.  This change might be something to keep in mind!

What happens if you complete the SIE exam, but you delay in completing one of the Top Off exams?  The SIE exam credit is good for 4 years.  If you take the Series 6 or the Series 7 within 4 years of SIE exam date, you will be fine.

As more information is available, regarding the changes to these exams, we will keep you informed.  

 

January 2018

 

At the recent SILA Annual Education Conference, FINRA representatives advised that the expected date for implementation of the new Securities Industry Essentials (SIE) Exam will be the first quarter of 2018.  Exam candidates will continue to schedule exams as before, but persons not associated with a firm will be able to create a profile ahead of scheduling an exam.  The exam may then be taken after the implementation date. 

For the first time, a person who is not associated with a firm will be able to take a FINRA exam.   Passing the SIE or Essentials Exam does not qualify a person for registration, but it does allow a person to start on the path to registration.   The new SIE exam will allow the industry to develop new business models for bringing employees on board.  Moreover, firms can use the Essentials exam to assess the business knowledge of administrative employees, interns, and applicants.  They can also require applicants to take the Essentials exam before applying, or they can start new hires on the SIE exam before progressing to the top-off exam required for registration.  

The SIE will be required for virtually all registered representatives obtaining new registrations.  By requiring this exam for all registrations, FINRA hopes to avoid duplication of the same content in the various licensing exams. The SIE is also intended to ensure that all representatives will have a broad understanding of the industry.  The exam content will be knowledge of the industry deemed important for every representative, including professional conduct, basic economics, product knowledge, regulatory agencies, and the structure and functioning of the securities industry.  

  

Exam content outlines for the Essentials exam and the top-off exams will be available on the FINRA website 6 to 9 months before the implementation date.