Series 7 exam

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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 Financial Industry Regulatory Authority (FINRA), an industry regulatory agency.[1][2]

The Series 7 exam ensures a baseline level of proficiency for individuals starting their careers in the financial industry.[3] 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. [4]

Permitted Activities[5][edit]

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 on 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[edit]

The corequisite is the Securities Industry Essentials (SIE) exam, a change FINRA enacted in 2018.[6] 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).[7] Employers will sponsor candidates as part of employment.

There is no education requirement. [8]

Structure[edit]

The Series 7 is a three hour and forty-five minute exam.[1] It is held in one four-hour session. There are 125 questions on the test. Candidates have to score at least 72 percent to pass. The SIE Exam and the Series 7 Exam are co-requisite exams. [9]

Average study time is between 80 and 150 hours depending on current financial knowledge.[10]

The Series 7 exam tests candidates on four functions.[1]

Test Breakdown by Function Number of Questions Percentage of Test Questions
(F1) Seeks Business for the Broker-Dealer through Customers and Potential Customers 9 7%
(F2) Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives 11 9%
(F3) Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records 91 73%
(F4) Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions 14 11%
TOTAL 125 100%

Registration costs[edit]

As of June 24, 2023, the registration cost is $300.[11]

See also[edit]

References[edit]

  1. ^ a b c "Series 7 Examination". FINRA. Retrieved 2015-03-16.
  2. ^ "Series 7 Examination". www.sec.gov. Retrieved 2023-06-25.
  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?". The Motley Fool. Retrieved 2023-06-25.{{cite web}}: CS1 maint: multiple names: authors list (link)
  5. ^ "Series 7 – General Securities Representative Exam | FINRA.org". www.finra.org. Retrieved 2023-06-25.
  6. ^ "FINRA Administered Qualification Examinations". FINRA. Retrieved 2015-03-18.
  7. ^ "Form U10 | FINRA.org". Archived from the original on 2015-04-11.
  8. ^ "Frequently Asked Questions About the FINRA Series 7 Exam". Kaplan Financial Education. 9 April 2019. Retrieved 24 June 2023.
  9. ^ "SIE Exam |SIE Exam Tutor".
  10. ^ "7 Strategies for Passing the Series 7 FINRA Qualifications Exam". Kaplan Financial Education. 8 April 2019. Retrieved 24 June 2023.
  11. ^ "Qualification Exams | FINRA.org". www.finra.org. Retrieved 2023-06-24.

External links[edit]