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Series 7 exam

American standardized test for entry-level stockbrokers

Summary

American standardized test for entry-level stockbrokers

In the United States, the Series 7 exam, also known as the General Securities Representative Exam (GSRE), is a test for entry-level registered representatives, that demonstrates competency to buy or sell security products such as corporate securities, municipal securities, options, direct participation programs, investment company products, and variable contracts. The Series 7 is administered by the Financial Industry Regulatory Authority (FINRA), an industry regulatory agency.

The Series 7 exam ensures a baseline level of proficiency for individuals starting their careers in the financial industry. It is particularly important for newly hired personnel who may lack prior exposure to finance-related subjects during their university education. Passing the Series 7 exam is often a requirement for other FINRA exams, including those related to options trading and managerial roles.

Permitted activities

A candidate who passes the Series 7 exam is qualified for the solicitation, purchase and/or sale of all securities products, including corporate securities, municipal fund securities, options, direct participation programs, investment company products and variable contracts.

Covered activities and products include:

  • public offerings and/or private placements of corporate securities (stocks and bonds),
  • rights,
  • warrants,
  • mutual funds,
  • money market funds,
  • unit investment trusts (UITs),
  • exchange-traded funds (ETFs),
  • real estate investment trusts (REITs),
  • options, options strategies and mortgage-backed securities,
  • government securities,
  • repos and certificates of accrual on government securities,
  • direct participation programs,
  • venture capital,
  • sale of municipal securities and
  • hedge funds

Eligibility

The corequisite is the Securities Industry Essentials (SIE) exam, a change FINRA enacted in 2018. In October 2018, the 250-question Series 7 exam was replaced by the current top-off exam that is now taken in conjunction with the SIE exam (a correlative change was made to the Series 6 exam). In order to take the exam, an individual must be sponsored by a member firm of either FINRA or a self-regulatory organization (SRO). Employers will sponsor candidates as part of employment.

There is no education requirement.

Structure

The Series 7 is a three-hour, forty-five-minute exam. It is held in one four-hour session. There are 125 questions on the test. Candidates have to score at least 72% to pass. The SIE Exam and the Series 7 Exam are co-requisite exams.

Average study time is between 80 and 150 hours depending on current financial knowledge.

The Series 7 exam tests candidates on four functions.

Test Breakdown by FunctionNumber of QuestionsPercentage of Test Questions
(F1) Seeks Business for the Broker-Dealer through Customers and Potential Customers97%
(F2) Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives119%
(F3) Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records9173%
(F4) Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions1411%
TOTAL125100%

Registration costs

As of June 24, 2023, the registration cost is $300.

References

References

  1. "Series 7 Examination". FINRA.
  2. "Series 7 Examination".
  3. Hicks and Stalter, Coryanne and Kate. (19 August 2021). "An Advisor's Guide to the Series 7 License".
  4. CPA, Sam Swenson, CFA. "What Is Series 7?".
  5. "Series 7 – General Securities Representative Exam {{!}} FINRA.org".
  6. "FINRA Administered Qualification Examinations". FINRA.
  7. "Form U10 {{!}} FINRA.org".
  8. (9 April 2019). "Frequently Asked Questions About the FINRA Series 7 Exam".
  9. "SIE Exam |SIE Exam Tutor".
  10. (8 April 2019). "7 Strategies for Passing the Series 7 FINRA Qualifications Exam".
  11. "Qualification Exams {{!}} FINRA.org".
Wikipedia Source

This article was imported from Wikipedia and is available under the Creative Commons Attribution-ShareAlike 4.0 License. Content has been adapted to SurfDoc format. Original contributors can be found on the article history page.

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