The Securities Industry Essentials Exam

About The Securities Industry Essentials: Pre-Requisites And Other Info

The FINRA SIE exam is open to anyone aged 18 or older, including students and prospective candidates interested in demonstrating basic industry knowledge to potential employers. Association with a firm is not required, and individuals are permitted to take the exam before or after associating with a firm.

There are no prerequisites to taking the Securities Industry Essentials Exam, and once you pass your SIE exam, you have one full year to study for and pass your Top Off exam.

The Origin of the SIE Exam

On October 1, 2018, FINRA changed the requirements for earning a Series 6, 7, 79, or 99 license. Where you used to take one exam for a Series 6 or 7 license, you now have to take a base course titled Securities Industry Essentials, plus a shortened version of the original Series 6 or 7 course.

Why The Change?

The new SIE exam and the changes to the licensing requirements stemmed from a review conducted by FINRA, with the following objectives:

• Reducing redundancy of subject matter content across the current exams
• Identifying opportunities to simplify the qualification exam requirement
• Limiting the impact of any alternative structure on the registration rules
• Identifying and eliminating outdated registrations

This new format also is arguably designed to draw more people into the financial industry, as prior to the SIE you were required to have a sponsor to take, for example, the Series 7 exam. While you still need a sponsor to take the Series 7 Top Off, passing your SIE exam should make finding a sponsor much easier.

How The SIE Affects Current License Holders

Most individuals who are currently registered would be considered to have passed the SIE exam, and it would remain valid for four years upon leaving the industry.

Additionally, if a currently-licensed representative leaves the industry and:

• Returns within two years, his or her registration would be regained without the need to take the SIE or top-off exam
• If between two and four years later, the SIE exam need not be taken again; only the Top Off exam for the registration
• More than 4 years later, both the SIE and top-off exam would need to be re-taken

Go to https://www.finra.org/sites/default/files/SIE%20Outline-01.12.18.pdf for more information from FINRA on the Securities Industry Essentials Exam.

What Does the FINRA SIE Exam Entail?

The Securities Industry Essentials (SIE) examination consists of 75 multiple-choice questions with four possible choices each. Ten additional preset items that don't contribute to your score are mixed randomly throughout the test for a total of 85 questions.

You'll have an hour and 45 minutes to complete your exam. Once completed, you'll need to achieve a score of 70 or higher out of 100 to move on to the Top Off.

The questions on the SIE exam represent a broad range of general knowledge within four sections. FINRA breaks these sections down accordingly, as follows:

• Knowledge Of Capital Markets
  
  The first section composes 16 percent — or 12 questions — of your exam. Within it, you'll be tested on content such as:
  • Regulatory entities and agencies such as SEC, SROs and other regulatory bodies and market participants
  • Types of markets and the market structure
  • Business and international economic factors
  • Offerings
• Understanding Products and Their Risks
  
  The second section makes up most of the exam. You'll spend 44 percent of your test answering 33 questions about:
  • Products such as hedge funds, exchange-traded products (ETPs), packaged products and more
  • Types of investment risks and strategies for mitigating them
• Understanding Trading, Customer Accounts, And Prohibited Activities
  
  This section contains 23 questions, which make up 31 percent of the exam. Content includes:
  • Trade settlements, investment returns and corporate actions
  • Types of customer accounts and their characteristics
  • Compliance considerations
  • Prohibited activities such as market manipulation, insider trading, improper use of customer funds and more
• Overview Of The Regulatory Framework
  
  The last section makes up only 9 percent of your exam. You'll answer seven questions about:
  • SRO regulatory requirements
  • 
    Employee conduct
  • Reportable events

  How To Prepare For The SIE Exam

  The FINRA site offers a full outline of the sections listed above. This outline is similar to the previous Series 7 exam, although this exam is far shorter than the Series 7 and focuses on basic industry information rather than delving into topics in depth.
  
  SIE exam study guides and practice exams provide plenty of preparation for your test. At AB Training Center, we offer a wide range of digital and print resources to help you prepare for your SIE exam and pass on the first try.
  
  Along with self-study resources, we offer in-person SIE exam prep seminars and webinars, so you can ask questions to a knowledgeable instructor and train with other emerging professionals. Your instructor will help you work through difficult concepts and gain a better understanding of what you'll need to pass your SIE exam.

  Contact AB Training Center for SIE Exam Prep

  If you're looking for courses that can help you excel on the FINRA SIE exam, you'll find the support you're looking for with AB Training Center.
  
  AB Training Center has been training financial professionals across the country since 1994. We're proud to offer today's emerging industry experts with a full range of in-person seminars, webinars, audio conferences and SIE exam study guides. After you pass the SIE exam, you'll also find ongoing support as you prepare for your Top Off exam.
  
  Contact us for more information about our products and services, or find your online training guide or local seminar using the search tool above.
  
  Related Links
  • How To Earn Your Securities License
  • How Long To Study For Your Securities License
  • How To Become A Stockbroker / Registered Representative
  • View Securities Licensing Information And Courses For Other License Types
  • How To Earn An Insurance License And Become An Insurance Agent