What is the Series 7 Exam?

What is the Series 7 Exam?

The Series 7 Exam is the General Securities Representative Qualification Examination. It is required to pass the Series 7 Exam if you work for a broker/dealer and are a new employee or trainee, and you want to work as an agent or registered representative of the company.

The Series 7 Exam has 250 questions, and the passing score is 72%. The sections of the Series 7 Exam include Options, Municipal Debt, Government Debt, Corporate Debt, Regulations, Customer Accounts, Margin Accounts, Trading Securities, Investment Companies, Retirement Accounts, Analysis and Economics, Taxes, New Issues, Equities, Suitability, and Brokerage Processes. There is quite a bit of information on the Series 7 Exam, and as a registered rep, you need to know it. Options and the various Debt sections seem to give people the most trouble. When you prepare for the exam correctly, you’ll give yourself a much better shot at passing. You’ll also be able to keep your job. Failing the Series 7 Exam sometimes results, unfortunately, in losing the position you applied for. Many firms hire new employees with the condition that they pass the Series 7 Exam within the first 30, 60, or 90 days of employment.

It can easily take 30 to 90 days to study and prep for the Series 7 Exam. Students should plan to use at least 3 hours per day studying, 6 days per week. It’s important to spend about 20 hours per week on the material. Students should take quizzes and practice exams, as well as read all of the material you have. Taking a day off is ok every now and then, but it’s important to stay focused throughout this period of study so that you put yourself in the best position to pass the Series 7 Exam the first time.

The brokerage firm gives the new employee a Series 7 sponsorship in order for the employee to be allowed to sit for and take the Series 7 Exam. People aren’t able to just walk in off the street and take the exam; it is only through exclusive Series 7 sponsorship that someone can take the Series 7 Exam.

The Series 7 Exam has 3 hours for the first 125 questions, then a 1 hour break, followed by the 2nd half of the exam, which is another 125 questions. This 6 hour-long exam is strenuous and comprehensive, covering all areas of the Securities Industry. Students open a window to take the Series 7 exam, and the window can be pushed back if necessary, if the student doesn’t feel ready to take the exam.

After an employee passes the Series 7 Exam, they now have the Series 7 license, which is necessary for investment professionals to help the investing public. The Series 7 license continuously keeps the registered representative active in the securities industry, but leaving the employment of securities firm for 2 years or more will cause the Series 7 license to lapse. After being out of the securities industry for 2 years, the Series 7 Exam will have to be retaken in order to reacquire the Series 7 license. Therefore, it’s important to stay active in the securities industry if at all possible.

Failing the Series 7 Exam for a trainee or new employee means that there is a new 30 day waiting period before the exam can be taken again. Employees must wait another 30 days if the exam is failed a 2nd time. If the Series 7 Exam is failed a 3rd time, there is a mandatory 6 month waiting period before the exam can be taken again. By this time, many employees, especially those in a trial period with a new firm, may have lost their jobs. Be sure to prepare for the Series 7 Exam properly so that you can pass the first time.


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