4 Steps to Obtaining Your Series 7 License

The Series 7 license, formally known as the General Securities Registered Representative Examination, needs to be obtained if you are looking to practice as a stockbroker. There are four main steps to undertake, which can be a little difficult, but perseverance will help you succeed.

Get Sponsored

In order to even take the examination, you must be sponsored by a brokerage. Seeing as you must have worked within a brokerage for four to six months before taking the examination, you should already have an employer who can sponsor you. This can work even if you are completing an internship, however, it may be difficult if they are not looking to hire you on the termination of your internship.

Series 7 License

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However, in order to have your company sponsor you, you must contact your department manager, as they have the authority to instigate this process. They must file the Uniform Application for Securities Industry Registration or Transfer (U4) with Financial Industry Regulatory Authority (FINRA).

Frequently, most companies are already members of FINRA so they will automatically register you to take your Series 7 examination after 30 days of your employment in the firm. It is advisable to check on this though, rather than make the assumption.

Study

In order to gain this license, you need to pass with a grade that surpasses 70%. This means that it is vital for you to study each topic in depth, to gain a thorough understanding of anything you may be asked in the examination.

Topics likely to be covered include: options matrix, buyer’s rights, seller’s obligations, spread and combination straddles, and so on. The examination itself has specific focus on:

  • Equity and debt instruments
  • Taxation
  • Retirement plans and options
  • Packaged securities
  • Investment risk

Register and Schedule

You need to register and book for your test. This will allow you to work out how long you have to study for the examination. The examination is very long, with 260 questions, usually taking around six hours, so make sure you have a full day clear; the test must be completed within one day.

When phoning to book your test, it is a good idea to ask what you can take in with you. Often people like to have blank paper for calculations, but this is not always allowed. The two biggest providers of test are Prometric Testing Center and Pearson Testing Center so trying booking with one of these.

Pay and Take the Test

Unfortunately the test costs quite a large fee. It will set you back around $250. Sometimes employers will pay this fee, but rarely; it is worth checking beforehand. When you arrive at the test, make sure to have spare stationery and to arrive in enough time. Your results will be given to both FINRA and your employer to let them know when, and if you pass. You can find out your score from one of these establishments.

Gaining the Series 7 license is extremely important if you want to take up a career as a stockbroker. Do not attempt to take the test without revision, as it may make an enormous difference to your chance of success.

Return to Stock Broker Salary and Career Information

 

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