What is the SIE Exam Passing Rate?
If you’re taking the FINRA Securities Industry Essentials (SIE) exam, you might be wondering about the passing rate. And you probably want to know how hard the exam is. Although more than three-quarters of those who sit for the SIE exam end up passing it, it’s still challenging. Let’s take a look at the data and then see what you can do to increase your chances of passing.
SIE Exam Passing Rate
You need a score of 70% or better to pass the SIE. As of August 31, 2019, the overall passing rate of the SIE exam was 82% out of 67,445 exams administered. Of the 58,264 candidates who were taking it for the first time, the pass rate was 74%. The rates for those taking the SIE with the Series 6, Series 7, and Series 79 exam were as follows:
- SIE and Series 6: 80%
- SIE and Series 7: 84%
- SIE and Series 79: 96%
Thinking about taking the SIE exam? Our free Candidate's Complete Guide to the SIE Exam is packed with useful information.
How Hard Is the SIE Exam?
The SIE exam is not easy. You should be prepared for a challenge. You are expected to know about capital markets, securities products, and regulations, as well as how to trade securities and what products are prohibited.
Although the exam requires some math and a few calculations, mostly you are being tested on how well you read the exam questions and your understanding of finance and securities concepts. Knowing definitions will not be enough. You should also be prepared for one word being used to mean different things and, conversely, several different words being used to mean the same thing. For examples and more details, read our article on frequently encountered SIE exam roadblocks.
Despite the challenges, you can be part of the 82% passing rate if you know the topics and prepare properly.
SIE Exam Questions and Topics
The SIE exam consists of 75 multiple-choice questions plus 10 unscored questions, and you have an hour and 45 minutes to complete it. The topics and the number of questions assigned each are:
- Knowledge of Capital Markets: 12 (16% of the exam)
- Understanding Products and their Risks: 33 (44% of the exam)
- Understanding Trading, Customer Accounts, and Prohibited Activities: 23 (31% of the exam)
- Overview of the Regulatory Framework: 7 (9% of the exam)
As you can see, the second and third sections make up 75% of the exam, so you need to do well on both those sections. But don’t overlook the other two. They are important because you will need to know how to apply those concepts in future securities licensing exams.
SIE Exam Study Tips—How to Increase Your Odds of Passing
These tips will help you develop the knowledge and confidence necessary to increase your odds of passing:
- Layout a study plan. Use the SIE Exam Content Outline from FINRA as a starting point. An SIE exam prep package is even more helpful for developing your study plan and determining how many hours to study. Because the SIE exam was just implemented in October 2018, guidance on how many hours of study to put in varies widely. Some say 20 hours. Others say 100-150 hours. Kaplan advises no less than 50 hours, and you should add more hours if you don’t have a financial background.
- Develop a steady, regular study routine. A routine can increase your retention dramatically. Balance your studying between reading and practicing with breaks in between that enable concepts (and how to apply them) to percolate. Relying solely on frantic cramming a few days before the exam is not recommended because you aren’t tested on memorization.
- Be sure you have a thorough understanding of finance and the markets, and are keeping up with trends. Take some extra study time to listen to podcasts or youtube videos about investing. Subscribe to updates from financial news sources online. Visit online discussions of finance, the stock market, and securities on quora and reddit. Build your confidence by answering practice questions and taking practice exams.
- Practice questions and exams enable you to assess how well you understand and apply critical concepts. You’ll be able to address weaknesses and become accustomed to the kinds of questions you’ll be asked on the exam.
Ready for the Challenge?
If you’re interested in taking the exam, check out our SIE exam preparation packages. You can also find answers to the most commonly asked questions about the exam in this SIE FAQ.
The Securities Industry Essentials (SIE) exam tests a candidate’s understanding of general concepts in four key areas within the Securities industry. With 75 questions and a required score of 70%, the test doesn’t offer a large margin for error (in order to pass you must correctly answer at least 53 out of the 75 questions). If you have prior education or experience in the financial sector, you may already be familiar with some of these key concepts. If not, don’t worry; a well-designed online course and study program will cover everything you need to know.
What is the SIE exam pass rate?
The Financial Industry Regulatory Authority (FINRA) reports a 74% pass rate among 58,264 first-time test takers (as of January 2019).
Although the average SIE exam pass rate is above 70%, don’t assume that it’s easy. Candidates who pass on the first attempt take the test seriously and are thoroughly prepared.
Learn more about FINRA’s SIE exam here.
Overview of SIE Exam Content
The information below will help you gauge your current level of readiness to sit for the exam.
1. Knowledge of Capital Markets (16%)
This section tests understanding of regulatory entities, agencies, and market participants. Questions will cover topics such as Self-regulatory Organizations (SROs), types of markets, economic factors, the Federal Reserve’s role, and other related topics.
2. Understanding Products and Their Risks (44%)
This section focuses on different types of equity, debt instruments, options, and packaged products. It also addresses the investment risks associated with each of these assets. Questions focus on the rules and regulations associated with various Securities products.
3. Understanding Trading, Customer Accounts, and Prohibited Activities (31%)
A significant portion of the exam covers understanding of the fundamental concepts of trading, including types of orders, trade capacity, compounds of return, and types of dividends.
4. Overview of Regulatory Framework (9%)
Candidates will be tested for knowledge of self-regulatory organizations, their requirements and processes. Employee conduct, reportable events, and several by-laws and rules also are included in this section.
Need Help Preparing for the SIE Exam?
You can increase the likelihood of passing the exam with the right preparation – and we are here to help.
To get started, check out ExamFX’s free eBook Getting To Know The Securities Industry Essentials (SIE) Exam. This resource can help you fully grasp what to expect and provide the confidence to create a plan that ensures a passing score.
Our SIE online training course is an easy-to-use exam prep program that can help you pass on the first try. This affordable, interactive course includes the most up-to-date eLearning tools to fit all learning styles.
Additional benefits of our SIE online prep course:
- 90 Days Access to our Interactive Learning Portal
- Integrated course options (combination of the SIE with the Series 6 or Series 7 course)
- Instructor Support
- OnDemand Video Lectures
- Weekly Live Online Training
- Pass Guarantee
- 24/7 access
You will need to prepare prior to taking the SIE exam. If you don’t pass the test you must wait 30 days to take it again. If you fail three times, the waiting period to retake the exam extends to 180 days. The last thing you want to do is put your career on hold due to lack of preparation. We recommend you seriously consider using an online exam prep before applying to take the exam. Learn more about how to study for the SIE exam here.
Learn more about how to register for the SIE exam here.
What Happens After You Pass the SIE Exam?
A passing score on the SIE exam will help boost your professional trajectory in several ways. By proving you understand the core concepts in Securities, you can separate yourself from other applicants who haven’t yet taken this step. Employers will see you as ambitious; ready to jump in and start making an impact immediately. And you will be ready to prepare for your qualification examination, which corresponds to your particular field in the Securities industry. You will be able to take your qualification exam once you are sponsored by a FINRA member firm.
SIE exam difficulty depends on the steps you take to prepare; we hope to be a part of your journey toward a successful career in the Securities industry!
Securities Industry Essentials (SIE) Exam
Beginning in October 2018, the Securities Industry Essentials (SIE) exam will be available for candidates who are pursuing entry-level positions in the securities industries. The Financial Industry Regulatory Authority (FINRA), which is a non-profit organization, created the SIE exam to give candidates an opportunity to demonstrate basic security industry knowledge to potential employers. FINRA’s mission is to ensure investor protection by enforcing regulations, monitoring firms, offering investment education, and promoting market transparency.
The SIE exam covers the fundamental concepts of the securities industry, including risks, products, market structures, and regulatory agencies. Candidates should note that passing the SIE exam is only one of the prerequisites for becoming a securities industry professional. Other requirements include completing a background check and passing a qualification exam for that specific type of business (Ex. General Securities Representative Series 7 exam).
Who is eligible to take the SIE Exam?
The Securities Industry Essentials (SIE) exam is available to candidates and students who are at least 18 years old. Candidates are required to take the SIE exam before or after associating with a firm.
When is the SIE Exam available?
The SIE exam is available beginning October 1, 2018.
How to apply for the SIE Exam
Candidates may enroll for the SIE exam on the FINRA website and schedule their exam at a Prometric testing location. Individuals have 120 days to schedule their exam. If you have to reschedule, please do so at least 10 business days prior to your scheduled exam date, to avoid penalty fees.
How much is the SIE Exam?
The proposed fee for the Securities Industry Essentials (SIE) exam is $60.
What topics are covered on the SIE Exam?
The SIE exam assesses candidates’ knowledge of entry-level practices and core concepts of the securities industry, as well as rules and regulations. The exam is divided into the following sections:
- Knowledge of Capital Markets. This section makes up 16% of the exam and includes 12 questions. Some of the categories include market structure and participants, regulatory entities, offerings, and FINRA rules.
- Understanding Products and Their Risks. This section makes up 44% of the exam and includes 33 questions. Some of the categories include exchange-traded funds, real estate investment trusts (REITs), municipal fund securities, and MSRB rules.
- Understanding Trading, Customer Accounts, and Prohibited Activities. This section makes up 31% of the exam, with 23 questions. Some of the categories include compliance considerations, market manipulation, anti-money laundering, and NASD rules.
- Overview of the Regulatory Framework. This section makes up 9% of the exam, with 7 questions. Some of the categories include employee conduct, continuing education, reportable events, and SEC rules.
In total, the SIE exam includes 75 multiple-choice questions and 10 pretest questions that do not count towards the final score.
What is a passing score for the SIE Exam?
The passing score for the SIE exam will be announced by the Financial Industry Regulatory Authority (FINRA) at a later date. The test scores are valid for four years.
What to expect on test day
The Securities Industry Essentials (SIE) exam is offered at Prometric testing facilities. On test day, candidates can expect the following:
- The SIE exam is a computer-based test with 75 multiple-choice questions and 10 pretest questions.
- Test-takers must provide a valid government-issued ID, which includes a signature and photograph. Examples include an active passport, driver’s license or military ID.
- Test-takers will have 105 minutes (1 hour and 45 minutes) to complete the exam.
- Study materials and personal items, including backpacks, notes, books, and briefcases are not allowed in the testing area.
- At the start of the test, test-takers will receive a four-function calculator, 2 dry-erase boards, and dry-erase pens.
- Test-takers are encouraged to arrive 30 minutes early to avoid forfeiting their test and cancellation fees.
How to prepare for the Securities Industry Essentials (SIE) ExamWhen searching for the most effective study materials for the SIE exam, it’s important to consider materials that will help you thoroughly understand the key concepts and the test format. Our test experts, who have meticulously studied the SIE exam, created study materials that are sure to help you earn a passing score and beyond!
The Mometrix SIE Study Guide provides in-depth explanations of all of the critical concepts tested on the exam, including market structure, regulatory agencies, and securities products. Conquering a test requires more than understanding the information, so the Mometrix SIE Study Guide also includes secret test-taking strategies that will help you avoid question traps, easing your anxiety on test day.
Repetition is proven to be one of the most effective study strategies, so Mometrix also offers the SIE Flashcards. With these flashcards, you are able to quiz yourself on the go!
We understand that preparing for an exam that can change the trajectory of your career can be intimidating. We created the SIE study materials to not only help you earn the score you deserve but to ease your anxiety, so that you can be more relaxed and confident on test day! We look forward to helping you pass the SIE exam!
A Complete Guide to the Securities Industry Essentials (SIE) Exam
In This Article
Introduction to the Securities Industry Essentials (SIE)
Beginning October 1, 2018, FINRA will overhaul the format of its regulatory exams: A new general knowledge exam called the Securities Industry Essentials (SIE) will become a corequisite for the Series 7 (General Securities Representative), Series 79 (Investment Banking Representative) and other Series Exams.
The individual Series Exams will be trimmed down to focus on content specific to the roles relevant to those exams. FINRA is calling the individual Series Exams “top-offs” to the SIE.
The previous FINRA format was often criticized for too much overlap of content across the individual Series exams, and finance professionals looking to remain in good standing found the need to take multiple Series exams inefficient and costly. The new format aims to fix these issues.
SIE Exam at a Glance
|Number of questions||75 (+ an additional 10 unscored but randomly mixed in)|
|Question Format||Multiple choice|
|Exam Location||Prometric Testing Centers; Exam Administered on Computer|
|Prequisite for the following Series Exams||Series 6, Series 7, Series 22, Series 57, Series 79, Series 82, Series 86/87, Series 99|
|Employer Sponsorship||Not required|
|Eligibility||18 years or older|
SIE content outline
Below is an overview of the topics (or, for an enthralling read, head to the FINRA site and download the full SIE content outline).
|Sections||Percentage of exam questions||Number of exam questions|
|Knowledge of Capital Markets||16%||12|
|Understanding Products and Their Risks||44%||33|
|Understanding Trading, Customer Accounts and Prohibited Activities||31%||23|
|Overview of Regulatory Framework||9%||7|
Unlike the Series 7, Series 79 or any other Series Exam, you do not need to be sponsored by an employer to take the SIE. FINRA hopes this will encourage students and prospective finance professionals to gain an understanding of basic financial knowledge prior to employment. FINRA has priced the exam accordingly at $60. However, you still need employer sponsorship to take a top-off exam (Series 7, Series 79, Series 6, etc.).
SIE and top-off exam expiration
If you take the SIE and don’t find a job at a FINRA-member firm within 4 years, you’ll have to retake the exam. If you join a member firm but leave, as long as you return to a member firm within 4 years, you will not need to retake the SIE. The top-off tests expire two years after a professional leaves the industry.
Should I take the SIE?
We’ll refrain from a full assessment until the exam is administered. However, for those considering the SIE as a way to gain financial skills valued by employers, we are skeptical about its usefulness. That’s because unlike financial training that investment banks actively seek out for new hires, the Series exams are widely perceived by employers as irrelevant to a finance professional’s day-to-day.
Josh Brown, author of “Backstage Wall Street: An Insider’s Guide to Knowing Who to Trust, Who to Run From, and How to Maximize Your Investments,” captured this sentiment well:
The Series 7 exam requires you to memorize enough useless information to get through a 6-hour, 250-question test. Most of the useful calculations one learns for the test are done by computers in the real world, and most of the ethics questions are obvious, making this the most pointless barrier-to-entry exam being given in the United States today. You should meet some of the cavemen I know who’ve managed to pass it.
“Backstage Wall Street,” McGraw-Hill
Since the SIE appears to be a watered-down version of the Series 7, students looking to develop and demonstrate mastery over financial concepts are for now far better off seeking any of the following resources:
Preparing for the SIE
Given that the exam is far shorter and focuses on basic industry knowledge, we suspect it will basically be a Series 7 “light.”
FINRA has not yet administered the SIE, nor have they provided a passing score, so a full discussion on how to prepare is premature. However, we can see from FINRA’s SIE content outline that there appears to be significant overlap with the previous Series 7. Given that the exam is far shorter and focuses on basic industry knowledge, we suspect it will basically be a Series 7 “light.” If that turns out to be the case, SIE exam prep will likely be a mercifully shorter version of Series 7 exam prep.
SIE training providers
There are several Series Exam training providers. Below, we list the largest Series 7 training providers, who we suspect will soon become the leading SIE training providers. (We will be updating this list with prices and more details once the providers make their SIE study materials available.):
Impact on Series 7
The Series 7 is the most widely administered FINRA exam. The pre-SIE Series 7 was a 6 hour, 250 multiple-choice question exam that covered general financial knowledge as well as product-specific knowledge. With the SIE, instead of just taking the Series 7, you will need to pass both the SIE and a new, shortened version of the Series 7. The Series 7 will now be 3 hours and 45 minutes long with 125 multiple choice questions. The new exam places greater focus on product-specific knowledge. Learn more about the Series 7.
Impact on Series 79
The Series 79 is the Series exam for investment banking professionals who exclusively engage in advisory services to corporations. Similar to the Series 7, it will be shortened and become a corequisite (“top off”) to the SIE. It will go from a 5-hour, 175 question multiple choice exam to a 2 hour, 30 minute exam with 75 multiple choice questions.
Learn more about the Series 79
The Series 63 requirement
Most states (including New York) require any professionals who carry the Series 7 and several other Series exams licenses to also pass the much easier and shorter Series 63 Uniform Securities Agent license (or the Series 65 or Series 66, depending on their roles).
So an investment banker practicing in New York will likely need to take the SIE, the Series 79 (or Series 7) and the Series 63.
The transition period
New hires in the summer of 2018 should take extra care to pass their Series exams, because after October 1, 2018, they’ll have to take the SIE. Per FINRA:
Individuals who apply for registration as a representative prior to September 30, 2018, will be required to pass the current representative-level exam appropriate to that registration category, not the revised version. In addition, such individuals will not be required to pass the SIE in order to register as a representative.
However, if such individuals fail to pass the current representative-level exam and the next eligibility date for retaking the exam is on or after October 1, 2018, they will be required to pass the SIE and the revised representative-level qualification exam in order to register as a representative. Such individuals may take the SIE and the revised representative-level exam at the next available date on or after October 1, 2018. These individuals would not have to wait the requisite period for retaking a failed exam because the SIE and the revised representative-level exams are different exams than the current representative-level exams.
SIE and Series Exam Restructuring Summary
Below is FINRA’s breakdown of all the Series Exams that are becoming top-offs to the SIE.
|Registration Categories||Before October 1, 2018||On or After October 1, 2018|
|Investment Company Representative (IR)||Series 6|
|SIE +||Series 6|
|General Securities Representative (GS)||Series 7|
|SIE +||Series 7|
|DPP Representative (DR)||Series 22|
|SIE +||Series 22|
|Securities Trader (TD)||Series 57|
|SIE +||Series 57|
|Investment Banking Representative (IB)||Series 79|
|SIE +||Series 79|
|Private Securities Offerings Representative (PR)||Series 82|
|SIE +||Series 82|
|Research Analyst (RS)||Series 7 + Series 86 + Series 87|
250 Questions + 100 Questions + 50 Questions
|SIE +||Series 86 + Series 87|
100 Questions + 50 Questions
|Operations Professional (OS)||Series 99|
|SIE +||Series 99|
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Format sie exam
SIE Exam Information, Facts and How to Pass
If you are reading this, it is likely you are seeking a career in the financial services industry and wanting to learn more about the Securities Industry Essentials (SIE) exam. The SIE exam is administered by the Financial Industry Regulatory Authority (FINRA). Passing the SIE exam is one of the first steps to becoming a licensed professional in the securities industry.
FINRA’s licensing requirements are mandatory for most professional positions in the financial services industry. Passing the SIE exam shows you understand basic concepts related to the markets and their functions, industry terminology, common formulas, financial products, laws and regulations, and other important information.
What is the SIE exam?
In 2018, FINRA launched the SIE exam, along with updated representative level exams (now commonly referred to as “top off” exams) that relate to professional specialties across the financial services industries. In order to become a registered representative, you must pass both the SIE and the appropriate representative level qualification exam. The introductory level SIE exam demonstrates knowledge of basic securities industry information, while top off exams demonstrate competency in specific sectors of the securities industry.
Who can take the SIE exam?
The SIE exam requirements are simple and straightforward: anyone 18 years of age or older can sit for the exam. You do not need to be sponsored by a member firm to take the SIE. However, to take representative level qualification exams you must be sponsored by a member firm. Having your SIE exam completed before you start applying for jobs can give you a competitive advantage. It shows prospective employers that you are a proactive self-starter who is ready to prepare for and pass representative level exams under their sponsorship.
What are the best ways to prepare for the SIE exam?
One of the best ways to prepare is to register for a SIE exam study package. Another great resource for a complete and comprehensive approach to SIE exam training can be found in our free eBook – it outlines the SIE exam process from preparation to passing your exam. Learn more about the SIE exam and our product offerings here.
What is the SIE exam pass rate?
The data from FINRA states that 74% of SIE exam test takers pass on their first attempt.
To develop a solid plan for passing the SIE exam, continue reading the information and recommendations below.
How Hard is the SIE Exam?
The degree of difficulty of the SIE exam is largely dependent on your current knowledge and education in the financial services industry. You will find it challenging if you go into the test without proper preparation. However, with the right exam training, you can be one of the individuals who successfully passes the SIE exam on your first attempt. Learn more about the SIE exam difficulty here.
What topics does the SIE exam cover?
The SIE exam tests your knowledge and comprehension of the securities industry. Topics cover markets, terminology, common formulas, regulations, laws, products, and other concepts related to the financial services industry.
The four sections of the SIE exam are:
- Knowledge of Capital Markets: 12 questions
- Understanding Products and Their Risks: 33 questions
- Understanding Trading, Customer Accounts and Prohibited Activities: 23 questions
- Overview of Regulatory Framework: 7 questions
What is the format of the SIE exam?
The format is multiple-choice and includes 85 questions (75 scored questions and ten pretest questions). To pass, you will need to score 70%.
How to enroll for and schedule your SIE exam
FINRA is the regulatory agency for the SIE exam, and Prometric is FINRA’s third party testing partner. Below are step-by-step instructions on how to enroll and schedule your SIE exam:
- Register on FINRA.org: Create a Test Enrollment Services System (TESS) account and pay your exam fee.
- Obtain your Central Registration Depository (CRD) number: Once you have a registered account with FINRA, you will receive a CRD number. You will need this when scheduling your exam.
- Go to Prometric.com: The SIE exam is administered by Prometric and taken at their testing centers across the United States.
- Create an account with Prometric and schedule your exam: You have a 120-day window to schedule your exam on the Prometric website after registering with FINRA.
How long do I have to complete the SIE exam?
You will have one hour and 45 minutes to complete the SIE exam.
We recommend timing yourself when taking the SIE practice exam. By tracking how long it takes you to complete the practice exams, you will be able to maintain a good pace during the official exam.
How much does the SIE exam cost?
The exam fee is $60 and is due when you enroll with FINRA.
I am a college student – should I take the SIE exam before graduation?
Yes! Passing the SIE exam will increase your marketability in the financial services industry. Prospective employers will recognize you are ambitious and eager to begin your career. Once you are confident that you are prepared to pass, we recommend taking the SIE exam. This can be a great way to catch the eye of future employers when they are reviewing resumes to identify standout candidates.
Does your SIE exam score expire?
SIE exam scores are valid for four years.
Does passing the SIE exam help me earn a securities license?
Yes, passing the SIE exam is one of the first steps toward obtaining your securities license. Typically, the next step is to pass a representative level qualification exam.
What are representative level or “top off” qualification exams?
Passing qualification exams permits individuals to engage in securities activities defined by the specific registration. Once you have an employer sponsor, you will be advised which exam to take. In order to take a representative level exam, you must be sponsored by a member firm of FINRA.
The current registration categories for representative level exams are:
- Series 6: Investment Company Representative
- Series 7: General Securities Representative
- Series 22: Direct Participation Limited Representative
- Series 57: Securities Trader
- Series 79: Investment Banking Representative
- Series 82: Private Securities Offerings Representative
- Series 86 & 87: Research Analyst
- Series 99: Operations Professional
Remember, the SIE exam does not have a sponsorship requirement - you can take the SIE exam any time you are ready.
SIE exam study tips
The right study tools will help prepare you to be successful on exam day by providing helpful study tips. Here are a few study tips to get you started:
- Terminology. If you are not already working in the industry, chances are you need to study the terms used on this exam. And a word of caution, some of these terms have multiple meanings.
- Formulas. Even though the SIE exam is multiple-choice, it is not advisable to guess on questions with mathematical solutions. Learn the common formulas used by securities professionals.
- Time Management. It is important that you set time aside to study for your exam so you can pass on your first attempt. You may lose months of potential employment by having to retake the exam.
- Plan of Action. A plan of action will help you organize your study time effectively and efficiently. A SIE exam study guide or online training program will provide you with the study tools and materials to succeed.
Learn more about how to study for the SIE exam here.
Are SIE study aids worth the investment?
Many people find the SIE exam challenging. Using the right online preparation tool provides the best opportunity for passing the SIE exam.
Why should I trust ExamFX to help me pass the SIE exam?
We have a proven track record of offering user-friendly, innovative eLearning tools to help students pass the SIE exam. ExamFX is considered a leader in licensing training by offering its customers the most innovative study tools and learning formats. In fact, we have helped over 6 million people prepare for career-changing exams.
If you are ready to take the next step by preparing to pass the SIE exam on the first try, contact ExamFX today.
Securities Industry Essentials (SIE) Exam
The qualification tests for several occupations in the financial services industry, formerly known as the Series exams, have been streamlined into one initial exam called the Securities Industry Essentials Exam—or the SIE Exam. Back in 2015, Financial Industry Regulatory Authority (FINRA) streamlined its testing structure by consolidating the fundamental knowledge shared across several of the Series exams into the SIE. Candidates can then take an additional "top-off" qualification exam for the specific field they hope to enter.
- The SIE dramatically altered the structure of the various existing qualification exams.
- You do not need to be affiliated with a FINRA member firm in order to take the SIE.
- If you already passed one of the FINRA exams and are registered as a representative you do not need to take the SIE.
Changes in Securities Industries Essentials Exam (SIE) Qualifications
The SIE had a major structural impact on the qualification exams. The SIE replaces portions of every previous exam, including the Series 6, Series 7, Series 22, Series 55/56 (replaced by Series 57), Series 79, Series 82, Series 86/87, and Series 99. These tests were shrunken, becoming qualification exams that focus on the specialized knowledge needed for each particular qualification.
Top-off exams are offered for the following representative categories:
- Investment Company Representative (IR) – Series 6
- General Securities Representative (GS) – Series 7
- DPP Representative (DR) – Series 22
- Securities Trader (TD) – Series 57
- Investment Banking Representative (IB) – Series 79
- Private Securities Offerings Representative (PR) – Series 82
- Research Analyst (RS) – Series 86 & 87
- Operations Professional (OS) – Series 99
Overall, this was clearly an effort to remove some of the duplicated information in the tests, but it also opened the door to a much more important change to the process of qualification, which is no longer having to be associated with a FINRA member firm to take the SIE.
Under the former FINRA rules, you generally needed to be employed or otherwise sponsored by a FINRA member in order to take the exams. The SIE removes this requirement, although you still have to be associated with a FINRA member firm to take the top-off exams. This means that an individual can choose to start on the path towards a FINRA qualification on their own.
Successfully taking the SIE doesn't guarantee anyone a successfully break into the financial industry, but it is safe to say that passing it prior to looking for a job may give you an edge as a prospective employer only needs to sponsor the top-off exam to get you qualified for a particular role.
FINRA supported the idea that recent graduates and people looking to get into the industry should take the SIE on their own. They’ve made it more attractive by extending the validity of the SIE to four years, giving a generous window for passing participants to then find a firm to sponsor the top-off exams. FINRA member firms are able to see who has passed the exam via the Central Registration Depository (CRD).
SIE and Top Off-Exams as Replacements
In their original Securities and Exchange Commission filings, FINRA targeted the fall of 2016 to early 2017 for a rollout of their highest volume exams. This proved to be a bit optimistic. There were several shifts in the scheduling, one resulting from the requests of member firms and industry associations for more time to set their own processes in accordance with the new structure. The SIE and top-off exam rollout took place on October 1, 2018 and was accompanied by the retirement of multiple low volume exams, such as the Series 42 and Series 62.
Originally, March 2018 was targeted for the implementation of the SIE and top-offs for Series 6, 7, and 79. October 1, 2018 became the date for a complete overhaul rather than a phased-in approach. Adding to some of the confusion was part of the attempt to modernize; the Series 55 was replaced by the Series 57, although it still appeared in the original notice for the SIE updates. That update was simply a standard part of FINRA reviewing and tweaking curriculum, rather than part of an overhaul of any core knowledge.
Structure of the SIE Exam
The SIE exam structure is largely based on the general knowledge components of the exams it replaced that portion for. In January 2018, FINRA provided more details on the structure. The sections and question count are as follows:
|The Makeup of the SIE Exam|
of Exam Questions
|(1) Knowledge of Capital Market||16%||12|
|(2) Understanding Products and Their Risks||44%||33|
|(3) Understanding Trading, Customer Accounts, and Prohibited Activities||31%||23|
|(4) Overview of Regulatory Framework||9%||7|
The 75 questions are actually 85, since there are 10 randomly distributed pre-test questions that do not count towards the score on the exam. Candidates have an hour and forty-five minutes to complete the entire exam. A full outline of the SIE content is currently available on FINRA's website.
How does the SIE affect me?
If you already passed one of the FINRA exams and are currently registered as a representative, you are considered to have passed the SIE already. If you passed one of the exams and are not currently registered, you may need to take the SIE depending on how many years elapse between now and your next registration. And, of course, if you passed the exam but your registration has lapsed, you will need to take the SIE and the new top-off for that qualification before being reregistered. This is pretty much the same as it has always been, except you would be taking two exams instead of one. In fact, the exams are designed to take the same total time as the previous versions. For example, the SIE and Series 7 top-off exam take the same amount of time as the previous Series 7 exam.
For member firms, the cost of the top-off exams is less than the previous exams because the content was shifted to the SIE. So, if an individual has passed the SIE prior to joining a firm, it is a good indication that this person already has the basic aptitude and wherewithal to pass a top-off exam. And, of course, the cost of getting that individual registered is reduced because they paid out of pocket for the SIE. All of which will likely help make a candidate more attractive to a firm.
If I had a Series 7 and it lapsed, do I have to take the new SIE or am I still covered?
If your license lapsed—assuming two years have passed since you were last registered—you have to retake the Series 7. You need to retake the SIE only if four years have elapsed since you last passed it or were last registered.
Is there an order for taking the SIE and the top-off? Should I take them together or separately?
The SIE is designed to come first, but the SIE and its associated top-off exams can also be completed over the same time period. In fact, you can take SIE and Series 7 top-off on the same day—just like the previous Series 7.
Can I become a registered representative without a corporate sponsor by passing the SIE Exam?
You need to take a top-off exam in order to become a registered representative, which you cannot take without a corporate sponsor.
Will the new SIE be harder or easier than the old Series 7?
The overall content covered over the two tests—the SIE and the Series 7 top-off exam—will be nearly identical to the previous Series 7.
How long is the SIE valid and does it have to be renewed?
The SIE is valid for four years. It needs to be renewed if four years have passed since you were last registered.
What is the wait time if I fail?
The wait time is 30 days for the first and second attempts, then six months if you fail the third attempt.
The Bottom Line
If you were already sponsored to take one of the qualification exams, go for it. These changes won't impact you at all. If you expect to be sponsored in the future, the overall content you need to master won’t change even though you have to do it in two chunks. If, however, you are not currently sponsored or in the industry, the SIE will open the door for you to start down the path of a financial career without having to associate with a member firm first. This change gives you a choice you didn't have before.
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