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Stock Broker Licensing

If you make stock trades for yourself and family only, usually no licensing is required. But if you want to make trades for other investors, licensing is almost always required through the National Association of Securities Dealers (NASD). Interestingly, to be a licensed professional trader through NASD, no formal education requirements exist, but you will need brokerage sponsorship, industry employment and a passing score for at least one long exam. You could be a high school dropout with an aptitude for market conditions that enableyou to be quite successful in this field

A stock broker is an investment professional who makes trades with market makers on behalf of investors. There are many other types of jobs in the securities industry that require specific licensing. For example, to become a CFO of a NASD company, you will need to take the Series 27 exam. To become an investment analyst you’ll need to take the Chartered Financial Analyst exam given by the CFA Institute.

In the wide range of the securities industry there corresponds a wide range of licensing. All of these licenses involve taking a lengthy exam issued by NASD. Most of these exams require at least 70% accuracy to pass. The most common exam — and the bare minimum requirement to become a stock broker — is the Series 7 exam, also known as the General Securities Registered Representative Examination. In some states additional licenses are required. Before you are allowed to take the exam, you must also be sponsored by a NASD firm and must be employed with them for at least four months.

Another broker exam that many states require for entering the brokerage industry is the Uniform Securities Agents State Law Examination, also known as the Series 63 exam. Even after gaining these two important credentials, in most cases you will start as a trainee and after a few years of education be promoted to a broker. Another requirement in some states is the Uniform Combined State Law Examination, also known as the Series 66 exam, which tests the knowledge of those pursuing careers as securities agents and investment advisors.

As with most industries the terminology and unique acronyms for the field and jobs of Stockbroker evlove and change with the times. While the term stockbroker is a commonly recognized term, more common and up-to-date words in this area are broker or registered rep. or rep. Rep is a simple abbreviation of the FINRA (pron. FIN-ra) designation Registered Representative, which is obtained by sucessfully passing the FINRA General Securities Representative Exam (a.k.a the Series 7 exam) and being employed or associated with a legally registered broker-dealer, a.k.a brokerage firm, typically a FINRA membered firm. More FINRA licenses and different series exams exist for brokers or reps who do not want or necessisarily need the wide range of options and market availability that come with the passing of the Series 7 (see our list of securities examinations below). It is also important to note that certain annuity products like Life Insurance will likely require some type of license or certification in the State or States where one intends to practice or sell these products.

Each exam takes several hours of preparation and most Profesional Career Schools offer guidance and many offer classes needed to aquire or maintain any credential that may be a prerequisite or license needed on Wall Street to become a professional trader in the New York Stock Exchange or NASDAQ etc,.The Series 7 exam has a reputation of taking up to six hours to complete and can take hundreds of hours to prepare for. Here is a list of the many different exams for gaining professional licensure in the securities and exchange industry:

Series 3 — for options, commodities and futures trading: exam includes questions about hedging.

Series 4 — for options sales management personnel: exam involves options and taxes.

Series 6 — for limited trading outside of corporate and municipal instruments: exam tests a wide range of knowledge that includes investment companies, taxes, regulations and investment risk.

Series 7 — for any investment professional representing financial interests of others: exam covers stocks, bonds, options and a wide range of other market knowledge, but does not include futures or commodities.

Series 9/10 — for those aspiring to be branch supervisors: exam is all about supervision in the options market as well as supervision of government securites.

Series 24 — for those seeking branch manager positions: exam is made up of questions about securites regulations, REITS and trading.

Series 26 — for limited principal supervisor/managers of investment companies and annuities: exam is for those who already hold Series 6 and 7 licenses.

Series 27 — if you want to be a CFO of a NASD member: exam includes NASD and SEC rules, understanding balance sheets and other accounting tools.

Series 30 — Futures branch officer manager: exam will test knowledge of the futures industry.

Series 31 — Futures and fund manager: more about the futures industry.

Series 55 — for active equity traders.

Series 63 — for securities agents, also known as the Uniform Securities Agent State Law Examination. Exam questions are based on the Uniform Securities Act.

Series 65 — for investment advisors.

Series 66 — for securities agents and investment advisor representatives (you’ll need 71% to pass). It’s also known as the Uniform Combined State Law Examination.

Keep in mind that with new Federal Regulations that have recently taken effect some of these Series Exams have been updated and new requirements regulating traders and trades are changing almost daily ot seems. If there is an exam or certification that you need and don’t see it here yet please complete our contact form and one of our career advisor affiliates will get back to you as soon as possible.

Sometimes it seems that the only people who are making any real money are those who work on or directly related to Wall Street firms and to some degree that may be true. But, there are many new and exciting areas for career opportunities and lateral job changes that we can either help you with directly or make a connection for you that will be a perfect fit for your chosen career path.