A Series 7 license allows you to place trades on behalf of your brokerage clients. You cannot work as a broker without one. An approved financial services company or self-regulated organization (SRO) must sponsor you to take the Series 7 exam. Once you become a licensed broker, you do not have to take the exam again. However, if terminated, you have two years to gain employment at another firm.
Series 7 Exam
The Financial Industry Regulatory Authority (FINRA) administers the Series 7 exam, which is the main license required for individuals seeking employment as securities brokers. The license allows you to place trades of different types on behalf brokerage clients. In addition, passing the Series 7 exam allows you to take other exams offered by FINRA. The exam consists of 260 questions in two parts, each three hours long.
You can't simply pay the fee to take the Series 7 exam. A financial company that is a member of FINRA or a SRO must sponsor you to take the Series 7 exam. Typically, the firm that sponsors you is your employer. Once you pass the exam, and are a licensed broker, the Series 7 license travels with you. In other words, the license is good while you work within the industry. Therefore, if you leave one firm to work for another, the license is still valid.
Your Series 7 license is valid for two years after termination. Within those two years, if you do not find employment with a financial company that is a member of FINRA or is a SRO, your Series 7 license expires. Should you find employment within the two-year period, the new firm notifies FINRA on your behalf.
The Series 7 exam allows you to take many other exams offered by FINRA. For example, the Series 63 exam which usually accompanies the Series 7 license allows you to solicit orders for corporate debt and equity securities.
- Comstock/Comstock/Getty Images