Overview of SILA Foundation’s webinar, “FINRA Speaks”
The Securities & Insurance Licensing Association (SILA) Foundation hosted an educational webinar led by Joe McDonald, the Senior Director of Testing and Continuing Education for the Financial Industry Regulatory Authority (FINRA). McDonald discussed the forthcoming updates to FINRA’s qualification exam program, namely the structure of the new Securities Industry Essentials (SIE) exam and the revisions made to representative-level exams. FINRA published the SIE exam outline on January 12, 2018. Registrations for the SIE open October 1, 2018.
It is an introductory securities exam that will test on basic industry knowledge and concepts. 4 main portions make up the exam:
Knowledge of Capital Markets
Understanding Products and their Risks
Understanding Trading, Customer Accounts, and Prohibited Activities
Overview of the Regulatory Framework
Do candidates need a sponsoring firm to take the SIE exam?
Individuals who are looking to take the SIE exam are not required to be a part of a member firm. This allows for the exam to be available to college and university students, as well as individuals looking to enter the securities industry from a different career background. Passing the SIE exam does not qualify an individual for FINRA registration or allow them to partake in securities business. Passing the SIE exam does allow for an individual to take the representative-level exams, such as the Series 7 or Series 6, after becoming associated with a member firm.
How long are the exam results considered valid?
SIE exam results are valid for four years. After four years without the attainment of a representative-level qualification, an individual must retake the SIE.
If a candidate fails to pass the exam on their first or second attempt, they must wait 30 days after each attempt before retesting. After failing a third attempt, they must wait 180 days before a retest.
What should candidates understand about the examination process?
A cancellation fee has been proposed, but a cost has not been disclosed at this time.
When a candidate schedules a test date, they will fill out a bio-metric consent form. They will scan their fingerprint at the testing center, as well as scan their ID. The testing center uses the data to combat cheating on the exam.
Upon completing the exam, the candidate will receive immediate results. A passing score will not be provided, but a failing score report will include the candidate’s score.
Are member firms able to view test results?
Member firms will be able to view testing results of candidates they are sponsoring through the WebCRD. If an individual fails the exam, the score will be listed. If they pass, only “Pass” or similar wordage will be shown. Once a candidate achieves a passing score, the scores from failed attempts will fall off from view.
Member firms can only view the exam results of a non sponsored candidate when conducting a pre-registration search or filing a Form U4 requesting a registration.
Member firms will be able to purchase SIE exam vouchers to distribute to candidates, as well as view the results of individuals using a voucher.
What revisions were made to the representative-level exams?
With the introduction of the SIE exam, representative-level exams are being revised. Exams will contain fewer questions, as well as have a lower cost. As mentioned previously, candidates will need to have a passing SIE in order to be fully qualified to practice.
Candidates may register for both the SIE and representative-level exams at the same time. In the instance a candidate may pass the representative-level exam, but not the SIE, they must retake the SIE before becoming qualified to conduct business with their representative-level qualification.
The revised exams will contain the following number of questions:
Most current registrants will be considered as having a qualifying SIE exam, and that “Pass” will be valid for 4 years after leaving the securities industry. If they return between 2 and 4 years later, they are not required to take the SIE exam. They will only be required to take the representative-level exam. Anyone who returns after more than 4 years will be required to take both the SIE and the representative-level exams.
How do candidates register for the SIE exam?
Registrations for the SIE exam and the revised representative-level exams will begin October 1, 2018, the same day these guidelines will take effect. Candidates who apply on September 30 or earlier will adhere to the current guidelines. If a candidate schedules a representative-level exam before October 1 and then takes it after that date, it will fall under the current guidelines. If the candidates fails, they will then adhere to the new SIE guidelines. The required waiting period would not apply in this situation. Individuals who take and fail their representative-level exam in September will take the SIE plus the revised representative-level exam on or after October 1.
Where can I find exam prep materials for securities?
A.D. Banker & Company will provide a full line of study materials including an online course, study manual, practice exams, and web classes in addition to its current securities product offerings. Remember to check back with A.D. Banker & Company for updates regarding the SIE and the revised registration-level qualification exams on a regular basis. To speak with someone from A.D. Banker regarding all Securities licensing study programs, please contact us at 1-800-866-2468.