FINRA Restructures Qualification Examination Program

The Financial Industry Regulatory Authority’s (‘FINRA”) restructured qualification examination program will become effective on October 1, 2018, and it will then require that all new representative-level applicants be required to take a general knowledge examination (the “SIE examination”) and a tailored, specialized knowledge examination (a revised representative-level qualification examination) for their particular registered role.   As part of the  restructuring, FINRA developed the SIE examination, revised nine of the existing representative-level examinations and eliminated seven representative-level examinations that have become outdated or have limited utility.

The SIE examination will test knowledge regarding fundamental securities-related topics, including knowledge of basic products, the structure and function of the securities industry, the regulatory agencies and their functions and regulated and prohibited  practices, whereas the revised representative-level qualification examinations will test knowledge relevant to broader day-to-day activities, responsibilities and job functions of representatives.

Under the restructured qualification examination program. a previously unregistered  individual who is applying for registration as a representative, for the first time on or after October 1, 2018, will be required to pass both the SIE examination and the appropriate revised representative-level examination for his or her particular registered role (or obtain a waiver of the examinations). This requirement also applies to previously unregistered applicants who are seeking a representative-level registration as a prerequisite to a principal-level registration. In addition, the SIE examination will be available to associated persons of firms who are not required to register as well as to individuals who are not associated persons of firms, including members of the public  FINRA currently administers examinations electronically through the PROCTOR system at testing centers operated by a vendor under contract with FINRA.

The SIE examination consists of 75 scored questions  and has a session time of one hour  and 45 minutes. The revised representative-level examinations consist of fewer scored  questions than the current examinations and have reduced session times, with the exception of the Research Analyst (Series 86 and Series 87) examinations.  Consistent with its process for establishing and revising examination fees, FINRA has amended Section 4(c) of Schedule A to the FINRA By-Laws to establish a fee of $60 for the SIE examination. FINRA has also revised the fee for each individual FINRA representative level examination that it is retaining, with the exception of the Series 86 and Series 87 examinations, to reflect changes to the test lengths for the examinations.

The following are the revised fees for each examination: Series 6 ($40); Series 7 ($245); Series 22 ($40); Series 57 ($60); Series 79 ($245); Series 82 ($40) and Series 99 ($40). Further, FINRA has amended Section 4(c) of Schedule A to the FINRA By-Laws to remove the representative level examinations that FINRA is eliminating and the associated fees.

Finally, FINRA is creating an enrollment system separate from the Central Registration Depository (CRD) system to allow individuals who are not associated persons of a firm, including members of the public, to enroll and pay the SIE examination fee. This system would also be available to associated persons of firms who are not required to be registered with FINRA.  FINRA is not proposing any changes, at this time, to the principal-level examinations or the associated fees.

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