Series 7, Series 63 & Other Series Licenses for Traders

Written By

Dan Buckley

Updated

Jul 3, 2024

The Series 7 license, administered by FINRA, qualifies individuals to sell a wide range of securities including stocks, bonds, options, and mutual funds. It requires an exam on various financial topics.

The Series 63 license focuses on state securities laws and is necessary for representatives who sell securities within specific states. This ensures they understand their ethical and fiduciary responsibilities under state regulations.

Other licenses – such as the Series 57 for proprietary traders, Series 24 for general securities principals, and Series 66 for investment advisors – provide further specialization and supervisory capabilities within the financial industry.

Key Takeaways – Series Licenses

Series 7 License

Qualifies individuals to sell a wide range of securities, including stocks, bonds, and mutual funds, through a comprehensive exam administered by FINRA.

Series 63 License

Ensures compliance with state-specific securities regulations, necessary for representatives selling securities within specific states.

Other Series Licenses

Specialized licenses like:

Series 57 for proprietary traders

Series 24 for general securities principals, and

Series 66 for investment advisors offer further career advancement opportunities in the financial industry

Series 7 License

The Series 7 license, also known as the General Securities Representative Qualification Examination, is a comprehensive exam administered by FINRA (Financial Industry Regulatory Authority).

It assesses the competency of an entry-level registered representative to perform their job as a general securities representative.

This license allows individuals to:

Sell various types of securities including corporate, municipal, and government securities, options, and investment company products.
Operate broadly in the securities industry, which includes roles like stockbroking and financial consulting.

Exam Details

Duration: 3 hours and 45 minutes
Number of Questions: 125
Cost: Approximately $300
Content: The exam covers topics such as equity and debt instruments, mutual funds, retirement plans, and customer accounts. It requires a broad knowledge of financial products and regulations (FINRA) (StateRequirement).

Series 63 License

The Series 63, also known as the Uniform Securities Agent State Law Examination, is required for individuals who wish to sell securities within a particular state.

This exam focuses on state securities laws and regulations.

This is so representatives understand their obligations to clients within a state-specific framework.

Exam Details

Duration: 75 minutes
Number of Questions: 60
Cost: Approximately $147
Content: The exam includes topics such as the registration of persons and securities, ethical practices, and fiduciary obligations.

Additional Licenses for Traders

Day traders might also consider the Series 57 license, which is specifically tailored for securities traders.

This exam assesses knowledge related to executing transactions in equity, preferred, or convertible debt securities that are not executed on a securities exchange.

The Series 57 is essential for proprietary traders who trade on behalf of their firm using the firm’s capital.

Career Implications

Series 7

Qualifies individuals for a wide range of roles in the securities industry, including those in brokerage and financial advisory positions.

It’s also a prerequisite for other specialized FINRA licenses such as the:

Series 24 (General Securities Principal) and
Series 66 (combined with Series 63 and 65 for investment advisors)

Series 63

Focuses on compliance with state regulations and is often obtained in conjunction with the Series 7.

This Series 7 and 63 gets you full regulatory compliance for state-specific securities transactions.

Choosing the Right License

Versatility

Series 7 offers broad capabilities and is ideal for those looking for comprehensive roles in the financial industry.

State-Specific

Series 63 is essential for those focusing on state-specific securities sales and compliance.

Specialization

Consider Series 57 for trading and proprietary trading roles.

For more details on preparing for these exams, consider resources from educational providers.

What Licenses Do I Need?

The required licenses for financial roles can vary depending on the specific responsibilities and regulatory requirements of your position within the industry.

Here’s a general rundown of what’s expected out of various finance roles:

Stockbroker: Series 7, Series 63
Financial Advisor: Series 7, Series 63, Series 66
Investment Banker: Series 7, Series 79, Series 63
Proprietary Trader: Series 57, Series 63
Wealth Manager: Series 7, Series 63, Series 65
Compliance Officer: Series 24, Series 63
Hedge Fund Manager: Series 7, Series 63
Municipal Securities Representative: Series 52, Series 63
Options Trader: Series 7, Series 4, Series 63
Commodity Futures Trader: Series 3, Series 63
Investment Company Representative: Series 6, Series 63
Branch Manager: Series 24, Series 7, Series 63

Always check to see which license(s), if any, you actually need.

General Information

What is the Series 7 license, and who needs it?

The Series 7 license, also known as the General Securities Representative Qualification Examination, is required for individuals who wish to sell a broad range of securities, including stocks, bonds, mutual funds, options, and other investment products.

It’s typically needed by stockbrokers, traders, and financial advisors working for broker-dealers.

What is the Series 63 license, and who needs it?

The Series 63 license, or the Uniform Securities Agent State Law Examination, is required for individuals who want to sell securities within a particular state.

It basically ensures that the licensee understands the state-specific regulations and ethical practices.

This license is typically needed by registered representatives and agents working for broker-dealers.

Are there other Series licenses required for traders, and what are they?

Yes, there are several other Series licenses that may be required depending on the specific trading activities and products involved.

These include the:

Series 3 (National Commodities Futures Examination)
Series 6 (Investment Company and Variable Contracts Products Representative Examination)
Series 24 (General Securities Principal Examination)
Series 65 (Uniform Investment Adviser Law Examination), and
Series 66 (Uniform Combined State Law Examination)

How do the Series 7 and Series 63 licenses differ from each other?

The Series 7 license allows individuals to sell a wide range of securities products, while the Series 63 license is focused on state-specific securities regulations and is required for selling securities within a particular state.

The Series 7 is more comprehensive and covers broader topics, whereas the Series 63 focuses on ethical practices and state laws.

Can you explain the purpose of other common Series licenses, such as Series 3, 6, 24, 65, and 66?

Series 3: Required for individuals trading commodity futures contracts and options.
Series 6: Needed to sell mutual funds, variable annuities, and insurance products.
Series 24: Qualifies individuals to supervise and manage branch activities, including compliance and operations within a broker-dealer.
Series 65: Required for individuals acting as investment advisers, focusing on providing financial advice and portfolio management.
Series 66: Combines the Series 63 and Series 65 licenses, allowing individuals to act as both securities agents and investment advisers.

Examination and Certification Process

What are the eligibility requirements to take the Series 7 exam?

Candidates must be sponsored by a FINRA-member firm or a self-regulatory organization (SRO) to take the Series 7 exam.

There are no formal educational prerequisites, but candidates typically have a background in finance or related fields.

What are the eligibility requirements to take the Series 63 exam?

Similar to the Series 7, candidates must be sponsored by a FINRA-member firm or SRO to take the Series 63 exam.

There are no formal educational requirements for this exam either.

What topics are covered in the Series 7 exam?

The Series 7 exam covers a wide range of topics, including:

Equities, debt instruments, options, and other securities products.
Regulations and industry standards.
Client interactions and product recommendations.
Trading practices and market mechanics.

What topics are covered in the Series 63 exam?

The Series 63 exam primarily covers:

State securities regulations.
Ethical practices and fiduciary responsibilities.
The Uniform Securities Act.
Administrative provisions and regulatory frameworks.

How long do the Series 7 and Series 63 exams take to complete?

Series 7: The exam takes 225 minutes (3 hours and 45 minutes) to complete.
Series 63: The exam takes 75 minutes to complete.

What is the passing score for the Series 7 and Series 63 exams?

Series 7: The passing score is 72% (90/125).
Series 63: The passing score is 72% (43/60).

Are there any prerequisites for taking the Series 7 and Series 63 exams?

The primary prerequisite for both exams is sponsorship by a FINRA-member firm or SRO.

There are no specific educational or professional experience requirements.

How often can you retake the Series 7 or Series 63 exams if you fail?

Candidates must wait 30 days before retaking the Series 7 or Series 63 exams if they fail.

After three consecutive failures, there is a mandatory 180-day waiting period before attempting the exam again.

What study resources or materials are recommended for preparing for these exams?

Recommended study resources include:

Official FINRA study guides and materials.
Exam prep courses offered by companies like Kaplan, STC, and Pass Perfect.
Practice exams and question banks.
Study groups and tutoring sessions.

Who administers the Series 7 and Series 63 exams?

Both the Series 7 and Series 63 exams are administered by the Financial Industry Regulatory Authority (FINRA).

How long is each Series license valid, and what is the renewal process?

Series licenses typically remain valid as long as the individual is employed with a FINRA-member firm.

If a license holder leaves the industry for more than two years, they may need to retake the exams.

Continuing education requirements must also be met to maintain the licenses.

What continuing education requirements are associated with maintaining a Series license?

License holders must complete continuing education (CE) requirements, which include:

Regulatory Element: Training required at regular intervals (usually every three years).
Firm Element: Annual training provided by the employing firm, focusing on specific business activities and industry developments.

Licensing and Regulation

Are there any state-specific requirements for the Series 63 license?

Yes, the Series 63 license ensures compliance with state-specific securities regulations.

Each state may have additional requirements or fees associated with maintaining the license.

How do changes in regulations affect Series license holders?

Changes in regulations can impact the scope of activities, compliance requirements, and continuing education obligations for Series license holders.

License holders must stay informed about regulatory updates to ensure ongoing compliance and adjust their practices accordingly.

Career Impact and Opportunities

What types of jobs require a Series 7 license?

Jobs that typically require a Series 7 license include:

Stockbrokers
Traders
Financial advisors
Investment bankers
Wealth managers

What types of jobs require a Series 63 license?

Jobs that normally require a Series 63 license include:

Registered representatives
Securities agents
Sales professionals working for broker-dealers
Financial advisors operating within specific states

How does holding a Series 7 and/or Series 63 license impact a trader’s career opportunities?

Holding these licenses can help with career opportunities by qualifying individuals to sell a broad range of securities products and ensuring compliance with state regulations.

This makes license holders more competitive in the job market and eligible for a wider variety of positions in the financial industry.

Can holding multiple Series licenses enhance a trader’s career prospects?

Yes, holding multiple Series licenses can enhance a trader’s career prospects by allowing them to:

offer a broader range of services and products
supervise other agents, and
provide investment advice

This increases their marketability and potential for career advancement.

Are there any professional designations or credentials that complement Series licenses?

Yes, professional designations such as:

…can complement Series licenses by providing additional expertise and credibility in specialized areas of finance, trading, and investment.

Practical Considerations

What is the cost of obtaining a Series 7 or Series 63 license?

Series 7: The exam fee is $300.
Series 63: The exam fee is $147.

How long does it typically take to prepare for the Series 7 and Series 63 exams?

Series 7: Preparation typically takes about 3-4 months of dedicated study.
Series 63: Preparation usually takes about 2-4 weeks of study.

What are some common challenges candidates face when preparing for these exams?

Common challenges include:

Grasping the breadth of material covered, especially for the Series 7 exam.
Balancing study time with work and personal commitments.
Managing test anxiety and the pressure to pass the exam.

How can a candidate balance their current job with studying for the Series 7 and Series 63 exams?

Candidates can balance their job with studying by:

Creating a study schedule that allocates specific times for study.
Using study materials and courses that offer flexible learning options.
Seeking support from employers, such as study leave or reduced working hours during preparation.

What should candidates know about the testing centers and the exam day experience?

Candidates should know that testing centers require:

A valid government-issued ID for entry.
Adherence to strict security measures, including personal item restrictions.
An understanding of the exam format, breaks, and time management for a smooth test-taking experience.