What Is the Series 7 Exam?
The General Securities Representative Exam (GSRE), better known as the Series 7 exam, qualifies a registered representative or stockbroker to buy and sell securities for customers of a FINRA member firm. The Series 7 exam is, in short, the entry-level exam for stockbrokers. Stockbrokers working for FINRA member firms must have taken and passed the Series 7 exam, confirming their basic knowledge of securities industry essentials and the essentials of dealing in securities.
Who Must Take the Series 7 Exam?
A securities professional wishing to buy or sell securities for a FINRA member firm must take and pass the Series 7 exam to register with the firm as a representative. Securities include investment products like corporate stock shares, municipal bonds, stock options, direct participation programs, investment company products, and variable annuities. Thus, securities professionals who wish to work for FINRA member firms buying and selling securities for customers of the firm must pass the Series 7 exam. FINRA member firms may not simply hire persons off the street to sell securities. FINRA member firms may only permit registered representatives to buy and sell securities. To become a registered representative, a securities professional must take and pass the Series 7 exam.
Who Need Not Take the Series 7 Exam?
While the Series 7 exam is the entry-level exam for registered representatives to buy and sell securities for FINRA member firms, some securities professionals do not make those securities transactions and thus do not need to take and pass the Series 7 exam. The securities industry offers other credentials, like the Chartered Financial Analyst (CFA) credential earned by taking and passing the CFA exam. The CFA credential, though, is not an entry-level credential. The CFA Institute offers the CFA credential only after a securities professional takes and passes three levels of exam, generally requiring hundreds of hours of study for each level. The Series 7 exam for registering as a representative with a FINRA member firm is generally among the first significant credentials securities professionals pursue.
Who Administers the Series 7 Exam?
The Financial Industry Regulatory Authority (FINRA) administers the Series 7 exam. The federal government authorizes FINRA, as a private non-profit industry authority, to regulate securities professionals and securities firms. Everyone from the government, the financial industry, stockbrokers, and down to the customer investors wants confidence in the integrity of securities and securities markets. FINRA is the regulatory authority charged with ensuring that integrity. FINRA won't authorize the registration of a securities professional with a member firm unless the professional demonstrates the character, knowledge, and competence to perform with integrity.
Series 7 Exam Content and Format
The Series 7 exam ensures that examinees know what they need to work competently as general securities representatives, the core of which is to buy and sell various securities. The Series 7 exam's 125 questions cover four different content areas. FINRA devotes nine of the exam's 125 questions to the practicalities and legalities of acquiring customers for a FINRA member firm. FINRA devotes another eleven of the exam's 125 questions to how to learn a customer's financial profile and investment objectives and open securities accounts. Another fourteen questions cover how to document customer instructions, agreements, and transactions. FINRA devotes the bulk of the Series 7 exam, constituting the remaining 91 of the 125 questions, to securities product information, investment recommendations, transferring assets, and maintaining records of those transactions.
The Co-Requisite SIE Exam
Since October 2018, the Series 7 exam has been a so-called top-off exam following the Securities Industries Essentials (SIE) exam. The Series 7 exam was previously 250 questions covering its current content and industry essentials. Since 2018, FINRA has moved industry essentials questions to the 75-question SIE exam. Since 2018, the Series 7 exam's new format has reduced the exam to 125 questions and retains the content focusing on the sale of securities. A representative must pass both the SIE exam and Series 7 exam to register with a FINRA member firm. FINRA thus calls the SIE exam and Series 7 exam “co-requisite” exams. FINRA requires both exams.
Series 7 Exam Timeline, Process, and Issues
Issues Qualifying for the Series 7 Exam
Under FINRA Rule 1210, qualifying for the Series 7 exam requires sponsorship from a FINRA member firm or self-regulatory organization. Candidates wishing to take the Series 7 exam generally take a job or internship with a member firm to get the qualifying sponsorship. Candidates seeking sponsorship must generally demonstrate good character and integrity to get their sponsoring organization's confidence. Misrepresentations or misunderstandings with an employer firm, internship site, or another potential sponsor can lead to loss of sponsorship and inability to qualify for the Series 7 exam. Consult national education attorney advisor Joseph D. Lento if you face issues getting a qualifying sponsorship from the firm or firms for whom you've worked or interned.
Issues Enrolling for the Series 7 Exam
Taking and passing the Series 7 exam begins with enrolling online with FINRA. Securities professionals who have already associated with a FINRA member firm may need to have that firm complete Form U4 and request the professional's enrollment for the Series 7 exam rather than creating their own online enrollment profile. In either case, both Form U4 and the candidate's self-enrollment require the candidate to provide substantial personally identifying information such as name, Social Security number, date of birth, address, and citizenship. Inaccuracies, unavailable information, incomplete information, or misrepresentations in a candidate profile can lead to substantial issues later, including the candidate's rejection for enrollment, scheduling an exam, completing an exam, or having FINRA approve registration after a passing score. Retain national education attorney advisor Joseph D. Lento if you face enrollment issues delaying or preventing your registration. Don't let misunderstandings over profile information derail your securities career.
Scheduling Issues for the Series 7 Exam
Once a candidate enrolls for the Series 7 exam, FINRA posts a 120-day window in which the candidate must schedule an appointment with FINRA's testing vendor Prometric. Candidates ordinarily take the Series 7 exam in person at a local Prometric test center, although an online option with a remote proctor may exist for some candidates and exams. Scheduling issues can arise around available test center seats, missed exams due to travel issues, illness or injury, and other conditions. Don't let a scheduling issue derail your Series 7 exam. Retain national education attorney advisor Joseph D. Lento to help you resolve those issues.
Irregularities Taking the Series 7 Exam
Administration of the Series 7 exam at a Prometric test center or online can lead to other issues delaying or derailing your Series 7 registration with a FINRA member firm. Confusion may arise over the identification that a candidate presents to sit for the exam, leading exam officials to suspect false identification and an exam impostor. A candidate may attempt to bring unauthorized materials or devices into the testing center, such as a smartwatch, smartphone, or similar electronic device, resulting in the candidate's removal from the testing center. Exam proctors may suspect cheating from suspicious-looking movements during the exam or movement in and out of the test center. Exam officials may even charge a candidate with misconduct after the exam for recording exam questions and sharing or attempting to share exam information. Retain national education attorney advisor Joseph D. Lento to help you address any of these serious exam misconduct issues.
Issues Obtaining Series 7 Exam Results
Candidates completing the Series 7 exam should expect FINRA to promptly communicate exam results. FINRA's Test Enrollment Services System (TESS) assures candidates of results posted to the candidate's online account within 72 hours after completing the exam. Your exam results may not appear in your online account, though, if Prometric test center proctors or other exam officials have identified suspicious conduct or circumstances or other issues that exist with your Series 7 exam enrollment, scheduling, and completion. National education attorney advisor Joseph D. Lento is available to assist you with obtaining your Series 7 exam results and working through any complicating issues.
Retesting Issues for the Series 7 Exam
Fortunately, FINRA permits repeated retesting after each time a candidate fails to achieve a passing Series 7 exam score. To schedule a retest, the candidate must resort again to FINRA's Test Enrollment Services System (TESS). Candidates cannot generally retest immediately. FINRA ordinarily imposes a thirty-day delay for each first, second, or third retest. FINRA extends the retest delay to six months for repeated attempts thereafter. Other hidden issues or irregularities may exist with your profile and testing experience, such as reports or suspicions of exam cheating or misrepresentations in your enrollment profile if you find that FINRA is refusing your opportunity to retest. National education advisor Joseph D. Lento is available to advocate on your behalf with FINRA officials to ensure your opportunity to take the Series 7 exam again to achieve a passing score and register as a securities representative.
FINRA Investigation of Series 7 Exam Issues
FINRA maintains a Department of Enforcement to investigate Series 7 exam issues, among many other responsibilities. The Department opens investigations after receiving evidence or information from automated surveillance, exam findings, witness tips, referrals from exam proctors or officials, and other sources. FINRA claims to keep its investigations confidential, which can help reduce a suspect's reputational harm. But that confidentiality can also mean that you'll be the last to know that you're under investigation. Watch for delays in enrollment, scheduling, test scores, and registration approval, and the failure or refusal of FINRA officials to respond to your reasonable inquiries. Retain national education attorney advisor Joseph D. Lento as soon as you learn that you are under FINRA investigation. Attorney advisor Lento can help guide you through the investigation to the best possible outcome.
FINRA Adjudication of Series 7 Exam Issues
If FINRA believes that a candidate has violated its exam procedures and rules, its Department of Enforcement determines whether the violation warrants formal disciplinary action. FINRA pursues disciplinary action through either voluntary settlement or formal proceedings. Settlement permits the candidate to resolve allegations with a formal letter of consent. But beware of settlements that include any admission whatsoever of misconduct, which could permanently bar you from the industry. Formal complaints go to FINRA's Office of Hearing Officers for a contested hearing. Retain national education attorney advisor Joseph D. Lento to help you negotiate your best settlement outcome or achieve your best hearing outcome. Do not enter into any agreement or pursue any hearing without skilled and experienced attorney advisor representation.
Potential Consequences for Series 7 Exam Issues
FINRA leaves no question that it may bar candidates from ever retaking the Series 7 exam if it finds those candidates have cheated or engaged in other serious exam process irregularities. A FINRA press release reports that FINRA barred two exam candidates whom it found had accessed internet information while taking the exam remotely online. The head of FINRA's Department of Enforcement declared that FINRA was putting test cheaters on notice that it “will vigorously pursue disciplinary action – including permanent bars – against any individual who cheats on qualification examinations.” A permanent testing bar, of course, means the candidate's inability to register to buy and sell securities with a member firm. FINRA may also include fines and suspensions in its disciplinary actions, in addition to a permanent industry bar. FINRA publishes Sanction Guidelines providing further details on the available discipline.
National Education Attorney Advisor Services
Appreciate the serious potential impact of FINRA discipline related to Series 7 exam issues and irregularities. Value your career as a securities professional. Retain national education attorney advisor Joseph D. Lento and the Lento Law Firm Team for your skilled and experienced representation. They have helped hundreds of students and professionals overcome challenges, issues, and irregularities in their education, licensing, and certification processes. Your professional career is worth retaining the best available representative for your best professional outcome. Call 888.535.3686 or go online now.
