By Steven M. Rice

The information in the Securities Industry Essentials (SIE) exam was included in study guides that covered the Series 6, Series 7, Series 22, and so on. The Financial Industry Regulatory Authority’s (FINRA’s) idea was to strip the similar information from these exams and create the SIE exam. Besides stripping the information from these other exams, unfortunately for you and other exam takers, FINRA added a lot more information. What this means is that your Securities Industry Essentials exam study guide is now much longer, and you will have to study a lot of information to answer 75 randomized questions.

The SIE exam tests your basic knowledge of the securities industry and is open to anyone age 18 or older. Association with a securities firm is not required — individuals may take the SIE exam prior to or after being hired by a firm. You will need to know certain terminology used in the securities industry, different securities products, how the market is structured, how the market functions, different regulatory agencies and their purposes, as well as regulated and prohibited practices.

Since unsponsored individuals are allowed to take the exam, you can take a step toward becoming a securities professional prior to being hired.

The exam’s purpose is to protect the investing public by ensuring that the individuals who sell or give information about securities have mastered the skills and general knowledge that competent practicing representatives need to have.

The SIE exam itself is a computer-based exam given at Prometric test centers throughout the United States. The 75-question exam, administered by the FINRA, is 105 minutes in duration. A score of 70 percent or better gets candidates a passing grade and puts big smiles on their faces.

The SIE Exam-Taker

The SIE exam is a co-requisite exam for people who want to become an investment company rep, a general securities rep, a direct participation programs (DPP) rep, a securities trader, an investment banking rep, a private securities offerings rep, a research analyst, or an operations professional.

The purpose of the SIE exam was to strip the information that was similar in all the aforementioned exams to make it easier for individuals to add additional licenses to their resume. So, in order to become a securities professional, you need to pass the SIE exam, one of the exams listed in the next section, and typically the North American Securities Administrators Association (NASAA) Series 63 or 66 exam.

People who have a long and sordid history of embezzlement, forgery, and fraud are generally disqualified and precluded from taking the exam. Candidates must disclose any prior criminal records, and the FINRA reviews each application on a case-by-case basis.

The SIE exam’s Co-Requisite Exams

The SIE exam is just your starting point. In order for you to become an industry professional, you will have to take one of the co-requisite exams and in most cases, the Series 63 or Series 66 state exams. As far as which co-requisite exam(s) you’ll have to take, that depends on the job you want and/or are hired to do. After you pass the SIE exam, the financial institution that hires you will tell you which exams you need to take and help you schedule them.

In addition to taking the SIE exam and one of the co-requisite exams listed below, you’ll likely have to take either the NASAA Series 63 exam or NASAA Series 66 exam. These exams go into state securities laws as compared to federal securities laws, which are focused on in exams like the SIE. The difference between the Series 63 and Series 66 is that the Series 66 allows holders to become investment advisers also. Your employer will let you know which one they want you to take. More and more broker-dealers want their agents to take the Series 66. Don’t worry too much; neither of them is the beast that some of the other listed exams are.

Series 6: Investment Company and Variable Products Representative Exam

The Series 6 is the license required by most banks and insurance companies. This license allows the holder to sell products such as mutual funds, variable annuities, and variable life insurance (along with having an insurance license).

Series 7: General Securities Representative Exam

The Series 7 is the license exam that most people will be taking. This is the license required by most broker-dealers. The Series 7 allows you to sell equity securities, mutual funds, bonds, direct participation programs, options, and so on.

Series 22: DPP Representative Exam

If you’re planning on focusing your career on selling direct participation programs (DPPs), the Series 22 is the one for you. This license allows you to solicit and sell limited partnership interest in DPPs like real estate programs, oil and gas programs, equipment leasing programs, and so on.

Series 57: Securities Trader Exam

The Series 57 license allows holders to execute trades in securities. Typically a Series 57 licensed individual works in the trading department executing trades for persons or firms.

Series 79: Investment Banking Representative Exam

The Series 79 Investment Banking Representative exam allows holders to work in the investment banking realm. As such, the holders’ functions would include advising or facilitating equity or debt securities offerings through public offerings, private placements, and mergers and acquisitions.

Series 82: Private Securities Offerings Representative Exam

If you’re planning on selling securities privately as compared to publicly, the Series 82 is the exam you’ll need to pass. The Series 82 tests you on the knowledge needed to perform functions of a private securities offerings rep, including the solicitation and sale of Regulation D private placement securities as part of a primary offering.

Series 7 + Series 86 + Series 87: Research Analyst Exam

If you love taking exams, this is the one for you. You not only have to pass the SIE exam but also the Series 7, Series 86, Series 87, and either the Series 63 or Series 66 — yikes! However, if you want to be a research analyst, this is the route you’ll need to go. A research analyst is required to prepare written and/or electronic communications that show an analysis of company securities and industry sectors.

Series 99: Operations Professional Exam

Persons who have a Series 99 license have proved that they have the knowledge needed to perform the critical functions of an operations professional. As such, their functions include client on-boarding (welcoming new clients, addressing client concerns, making sure clients understand services available to them, and so on), receipt and delivery of securities and funds, account transfers, reinvestment and disbursement of funds, and so on.

How to sign up for the SIE exam

One of the things I really like about the SIE exam is that you don’t need to be sponsored in order to take the exam (most of the other securities exams require sponsorship by a firm, bank, insurance company, and so on). This allows you to get a leg up on the competition and also shows your future employer that you’re not fooling around.

Filling out an application to enroll

Although the enrollment process to take the SIE exam has not been hashed out at the time of this writing, by the time this exam goes live, you’ll be able to find information and a link to the application at the FINRA website. You can also contact the test center.

It’s a date! Scheduling your exam

After you file your application and receive your enrollment notification, you can schedule an appointment to take the exam by contacting the Prometric Testing Center. Locate the test center nearest you by either calling the Prometric center (800-578-6273) during business hours or scheduling online.

Like other securities exam enrollment, your SIE exam enrollment is valid for 120 days — you have to take the exam within this time frame. When scheduling your exam appointment, be ready to provide the exam administrators with

  • Your name and Social Security number
  • The name of the securities exam you’re registering to take
  • Your desired test date

Getting an appointment usually takes about one to two weeks, depending on the time of year (you may wait longer in the summer than around Christmastime). Prometric will confirm your appointment on the phone or via email.

I suggest putting pressure on yourself and scheduling the exam a little sooner than you think you may be ready to take it; you can always move the test date back (there will be a charge if you cancel within ten business days of your test date). You know yourself best, but I think most students study better when they have a target test date.

You have a choice of locations to take the exam. If you’re a travelin’ man (or woman), you may want to schedule your exam at a location far away (maybe even in a different state) to get the test date that you want.

After you have your test date set, you may find that you’re ready sooner or will be ready later than your scheduled appointment. The exam center administrators are usually pretty accommodating about changing appointments and/or locations as long as you call before noon at least two business days before your test date, but there may be a fee involved.

You can get an extension from the 120-day enrollment only if you call within ten days of your enrollment expiration and if no earlier test dates are available.

Plan ahead for special accommodations

If you require special accommodations when taking your securities exam, you can’t schedule your exam online. You have to contact the FINRA Special Conditions Team at 800-999-6647 or fill out the special-accommodations form. Read on for info on what the test administrators can do if you have a disability or if English isn’t your first language.

Depending on your testing center, you may have to receive authorization to bring medical devices and supplies — such as insulin pumps, eyedrops, and inhalers — into the testing room. If you need authorization, call your local Prometric testing center, and a staff member will be able to guide you on the approval process.

Test center amenities

The test centers are required to comply with FINRA site guidelines; however, some of the older centers may not have the amenities that the newer ones do (such as lockers and earplugs). To protect yourself from a whole variety of unpleasant, unexpected site surprises on exam day, the FINRA website offers general information, including test center security guidelines (including candidate ID requirements, personal items allowed, and provided aids), test center rules of conduct, and so on. For more site-specific questions, like whether a cafeteria, vending machines, or lockers are on site, ask the center’s administrator when you schedule your test date.

Americans with Disabilities Act (ADA) candidates

If you’re disabled or learning impaired, the FINRA provides testing modifications and aids in compliance with the provisions of the Americans with Disabilities Act (ADA). To qualify for ADA provisions, your disabilities have to permanently limit a major life activity, such as learning, speech, hearing, or vision.

To apply for special accommodations, you need to submit documentation from your physician or licensed healthcare professional to the FINRA, requesting the special arrangements. Additionally, you have to submit the FINRA Special Accommodations Eligibility Questionnaire and Special Accommodations Verification Request Form for all special arrangement requests (you can find links to the forms at FINRA’s website).

You may request the accommodations you want approved; possible aids include

  • Extra time
  • A written exam (pencil and paper)
  • A reader, writer, or recorder
  • A sign language interpreter
  • A large-print exam booklet
  • Wheelchair-accessible locations

The FINRA reserves the right to make all final decisions about accommodations on a case-by-case basis.

English as a second language (ESL) candidates

If English is your second language, you can request additional time to take the exam when you schedule your SIE test date. If the FINRA approves, you receive a little extra time to complete the exam. In general, FINRA gives an extra 30 minutes for exams less than two hours and an extra hour for exams over two hours.

To qualify for extra time due to English being your second language (LEP — Limited English Proficiency), fill out the FINRA form.

How to cancel your SIE exam appointment

If something comes up or if you feel you’re just not ready, you can cancel your appointment to take the SIE exam without penalty if you do so at least ten business days before the exam date. If a holiday falls within the cancellation period, you have to cancel an additional business day earlier. For example, if you’re scheduled to take the exam on a Wednesday, you have to cancel on Tuesday two weeks before your exam date. If a holiday falls between those dates, you have to cancel on Monday two weeks before your exam date.

If you cancel after the proscribed deadline, if you don’t show up to take the exam, or if you show up too late to take the exam, you will be charged a cancellation fee equal to the cost of the exam fee paid. Don’t try the old “I forgot” excuse, because not only is it ineffective, but I’m somewhat sure that it’s illegal in all 50 states, Canada, and the U.S. territories.