UPDATE 5/29: FINRA has put out a request for comment and a proposed draft Securities Industry Essentials Examination (SIE) Content Outline in Regulatory Notice 15-20. Read our comments on the release here.

Beginning in 2018, anyone seeking to become a registered person in the securities industry will be required to take and pass the new Securities Industry Essential Exam (SIE). This exam will serve as a prerequisite for several FINRA registration categories, including the Series 7 and 79, as well as the Series 6, 22, 55/56, 82, 86/87, and 99.

To help candidates prepare for the SIE, the Knopman Marks Financial Training Team will offer a comprehensive SIE study package. As with all of our exams, the Knopman Marks team will partner with our students from start to finish to help them prepare using our SIE textbook, classes, practice exams, and instructor guidance.

Upon successfully completing the SIE, an individual will need to take a specialized knowledge examination in order to become fully registered with his or her FINRA member firm employer. Different specialized knowledge examination exams will be available, depending on the area or role the individual will be working in.

Let’s compare the current regulatory regime with the new SIE regime for a general securities representative (Series 7):

• Currently, only employees of member firms can take the Series 7 Exam (250 questions).

• Under the new regime, the registration process will be two steps. First, individuals prepare for and pass the SIE Exam (100 questions). (This can be done before employment or association with a member firm.) Second, once associated with a member firm, candidates can prepare for and pass the Specialized Series 7 examination (150 questions) to become fully registered.

SIE Chart 2

Unlike standard registration exams, the SIE Exam will not require candidates to be sponsored by any FINRA member firm. This may appeal to the college population, as many students have a vision of future employment in the securities industry, and achieving this milestone while attending college can be a positive step toward that goal.

The SIE Exam will be a multiple-choice exam, with four answer choices per question. The exam will test the candidate on general securities knowledge, and the exam results will be provided immediately upon completion. Passing this exam will qualify the individual to take the appropriate specialized knowledge exam, once he or she is affiliated with a FINRA member firm. Those who do not pass the SIE Exam will need to wait 30 days to take it again.

Candidates will be able to prepare for the SIE Exam with dedicated study materials and practice exams: Individuals will need to demonstrate their mastery of the testable content and answer questions that test their ability to apply their knowledge of the content in a variety of scenarios.

Once individuals successfully complete the SIE Exam, they will have four years to complete the appropriate specialized knowledge exam to associate with a member firm and hold a registered position.

What about those who were previously employed in the securities industry and have since left but wish to return?

• If it’s been less than two years since the person’s last registered position, he or she will not need to take additional examinations.

• Individuals who have been away from the industry for more than two years but less than four years will need to take the appropriate specialized knowledge exam, but not the SIE.

• Individuals who have been away from the industry for more than four years will need to take both the SIE Exam and the appropriate specialized knowledge  exam.

The new SIE Exam will provide an exciting opportunity for anyone who wants to become registered with a securities industry firm and launch a fruitful career on Wall Street.

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