The FINRA Series licenses explained
This was originally posted by Jeremy L. Pardue on WallStreetOasis, a community for finance industry professionals that we are partnered with. We found this to be such a good guide that we asked Jeremy’s permission to repost it here. Enjoy.
Here’s a basic breakdown of the Industry Series Licenses and their typical use in the industry. All exams require sponsorship from your firm and are provided by FINRA unless otherwise noted.
FINRA SIE: Your general investment knowledge test – it’s composed of material previously tested within other tests and merged into one entry exam. The SIE exam serves a benchmark for candidates seeking sponsorship for other exams. No sponsorship required.
FINRA Series 6: A limited brokers license, which allows holders to engage in transactions for mutual funds, variable annuities, unit investment trusts.
FINRA Series 7: Allows the previously listed Series 6 transaction types plus stocks, bonds, direct participation plans, and options. Generally referred to as the Stock Broker License.
FINRA Series 57: For securities traders.
FINRA Series 79: The investment banking representative exam. It permits you to render advice for M&A, debt/equity public and private offerings, tender offers, etc.
FINRA Series 86 / 87: Research analyst exams. 86 is the first part, and the 87 is the second. They present competency standards for the role. CMT and CFA holders can request exemption from the 86, but will still require the 87.
FINRA Series 9 / 10 is basically the supervisory equivalent of the 6. The 24 is the same for the 7, and is known as the General Securities Principal.
FINRA Series 52: Municipal underwriting exam, used to be included in the 7 prior to 2008. Examination is provided through the MSRB.
FINRA Series 63: Allows you to solicit the sale of securities.
FINRA Series 65: Allows you to provide investment advice for a fee.
FINRA Series 66: The combination of the 63 & 65.
The 63 and 65 do not require sponsorship, the 66 does not require sponsorship, but does require you to hold an active 6/7 (which requires sponsorship). RIA typically have 63/65, IA reps with brokerages usually have 66. Examination is provided through NASAA.
Every firm has their own requirements for series licensure, but generally it is reflective of the role you will be serving for them. IB reps working internally don’t require the 79 license as they aren’t directly providing advice to clients. Client facing reps would be subject to the requirement. Anyone executing order tickets on behalf of the client directly would be subject to the 6. Order tickets processed on behalf of a licensed rep do not require licensure as this would be considered administrative service logged under their license #.
Simply put, if you’re not directly engaging with the client, licensure is not required legally, but firms may sponsor examinations to provide future opportunities for your services.
Thanks for reading!
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