Achieve Success with the Series 7 Exam: Your Gateway to a Rewarding Financial Career
The Series 7 exam licenses the holder to sell all types of securities products except commodities and futures. Known formally as the General Securities Representative Qualification Examination, the Series 7 exam and its licensing are administered by the Financial Industry Regulatory Authority (FINRA).
Stockbrokers in the United States need to pass the Series 7 exam to obtain a license to trade. The Series 7 exam focuses on investment risk, taxation, equity, debt instruments, packaged securities, options, retirement plans, and interactions with clients for prospective securities industry professionals. This introductory-level exam assesses a candidate’s understanding of basic securities industry information including concepts fundamental to working in the industry.
The purpose of the Series 7 license is to set a benchmark of competency for a registered representative or stockbroker to operate within the securities industry. This licensing exam covers an extensive range of financial terms and topics as well as securities regulations.
Key Benefits
- The Series 7 exam and license enable the holder to sell various securities products, excluding commodities and futures.
- Topics on the Series 7 exam include investment risk, taxation, equity and debt instruments, packaged securities, options, and retirement plans.
- This license ensures a foundational level of competency for registered representatives in the securities industry.
Successful candidates can trade a plethora of securities, such as stocks, mutual funds, options, municipal securities, and variable contracts. However, the Series 7 license does not include selling real estate or life insurance products. Besides the Series 7 license, many states require registered representatives to pass the Series 63 exam, also known as the Uniform Securities Agent State Law Exam.
Series 7 Requirements
Since October 2018, Series 7 candidates must pass the Securities Industry Essentials (SIE) exam in addition to the Series 7 exam to receive the General Securities registration. The SIE exam is an introductory test that assesses a candidate’s knowledge of basic securities industry information, such as product types and their risks, industry market structure, regulatory agencies and their functions, and prohibited practices.
Candidates must be sponsored by a FINRA member firm or another applicable self-regulatory organization (SRO) member firm to take the Series 7 exam. The member firm files a Form U4 (Uniform Application for Securities Industry Registration or Transfer Form) for the candidate to be registered for the licensing exam. Non-FINRA members should use the Test Enrollment Services System (TESS) to register for the exam. FINRA oversees the activities of securities firms and registered brokers to ensure that anyone who trades securities products is qualified.
Series 7 Exam Structure
The exam is organized as follows:
- Seeks Business for the Broker-Dealer from Customers and Potential Customers: 9 questions.
- Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives: 11 questions.
- Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets, and Maintains Appropriate Records: 91 questions.
- Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions: 14 questions.
The Series 7 exam consists of 125 multiple-choice questions, lasts 225 minutes, and costs $300. Candidates must score 72% to pass.
Before October 2018, the Series 7 exam contained 250 questions, took six hours, had no prerequisites, and cost $305. A score of 72% was required to pass. Candidates do not receive a physical certificate as proof of exam completion. Current or potential employers can view completed exam details through FINRA’s Central Registration Depository (CRD).
Completing the Series 7 exam is a prerequisite for other securities licenses, such as the Series 24, which permits the candidate to supervise and manage broker activities.
Related Terms: Securities Industry Essentials (SIE) exam, Series 63 exam, broker, financial terms, investment risk.
References
- FINRA. “Series 7 – General Securities Representative Exam”.
- FINRA. “General Securities Representative Qualification Examination (Series 7) Content Outline”.
- FINRA. “Series 63 – Uniform Securities Agent State Law Exam”.
- North American Securities Administration Association. “Exam FAQs”.
- FINRA. “FINRA Launches New SIE Exam to Streamline Examination Process for Prospective Candidates Entering the Securities Industry”.
- FINRA. “Securities Industry Essentials® (SIE®) Exam”.
- FINRA. “Register a New Candidate”.
- FINRA. “Exam Restructuring”.
- FINRA. “Central Registration Depository (CRD)”.
- FINRA. “Series 24 – General Securities Principal Exam”.
