What Are the Securities Certification Exams?

financial managerBack in the early to mid 90’s The National Association of Securities Dealers and the New York Stock Exchange, concerned about maintaining ethical standards and professional business practices, began doling out regulations requiring securities dealers to meet continuing education requirements and pass certification exams.

The Uniform Securities Agent State Law Examination or Series 63 certification exam was developed by The North American Securities Administrators Association (NASAA) and is given by the Financial Industry Regulatory Authority (FIRA). This examination is intended to qualify candidates as security agents for their state; almost all states are now requiring individuals to pass the Series 63 as a condition of registration.

Series 63 certification exam consists of a series of 65 multiple-choice questions. Only 75 minutes are allowed to complete the exam. A score of 70% is passing and credit is given for only passing answers. The exam covers the principles of state securities regulations under the Uniform Securities Act (USA).

The USA deals with securities fraud at the state level and to assist the Securities and Exchange Commission (SEC) in regulations and enforcement.

Series 6 certification exam is the Investment Company Products/Variable Life Contacts Representative Exam and is also a series of multiple-choice questions. 100 questions and the student must get a 70% to pass.

The Series 7 certification exam examines the qualifications of the person’s ability to sell Mutual Funds, set up a Unit Investment Trust, Variable Annuities and Life Insurance and Municipal funds.

The General Securities Representative Exam is also referred to as Series 7 certification exam and contains 250 questions and last six hours. This exam is owned and maintained by the New York Stock Exchange and again, the student must receive a 70% to pass the test.

The Uniform Investment Advisors Law Exam also called Series 65 certification exam is presented by NASAA and administrated by the National Association of Securities Dealers (NASD). This exam is to qualify applicants for investment advisor representatives.

This certification exam consists of 130 questions plus 10 pretest questions; however, the student does not know which 10 questions are the pretest questions. In order to pass the 180 minute exam, one must get 65.5% of the multiple-choice questions correct.

The Uniform Combined State Law Exam also referred to as Series 66 certification exam is developed by NASAA and is given by NASD. This exam is designed to qualify student as investment advisor representatives and securities agents.

One must pass the series 66 certification exam with a 71% in order to become both an investment advisor representative and a securities agent. Students are allowed 150 minutes to complete the certification exam.

These are all the securities certifications needed to keep key investors honest and ethical throughout their career.

Why multiple choice certification exams? Because there are several advantages to this style of testing. First, on many assessments, which is what multiple-choice questions are use for the most, reliability has been shown to improve over larger number of items on a test. Multiple-choice tests are often easier to administer and less time consuming.


See also – Securities Salesperson Job Description

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