General Securities Representative Exam
Encyclopedia
The General Securities Representative Exam, commonly referred to as the Series 7 Exam, is a required exam to become a Registered Representative
of a broker-dealer
in the United States
.
The exam is a six-hour, 260 question test (250 of which count towards the final score) that is owned, maintained and administered by the Financial Industry Regulatory Authority
(FINRA), which covers a broad range of investments including stock
s, bonds
, options
, limited partnership
s, and investment company products (e.g., open- and closed-end funds
). As of November 7, 2011, candidate must answer at least 72% of the questions correctly in order to pass. Upon passing the test, one is granted a Series 7/General Securities license.
The Series 7 license is the most comprehensive of several securities licenses that permit an agent to communicate with retail investors. For this reason, many account managers, analysts, and other executives in the employ of a registered Broker/Dealer hold Series 7 licenses. To satisfy the securities dealing requirements of some states, Series 7 license holders must also hold either the Series 63 license or the Series 66 license, depending on the state the licensee works in as well as the state his/her clients reside in.
Typically, the average score of test-takers is around 73%, with around 66% of test-takers achieving a passing score. While one can study from the content outline provided by FINRA, many choose to use the materials of a third-party training vendor.
In November 2010 registration cost $265 according to FINRA.
Registered Representative
A Registered Representative, also called a General Securities Representative, a Stock Broker, or an Account Executive, is an individual who is licensed to sell securities and has the legal power of an agent....
of a broker-dealer
Broker-dealer
A broker-dealer is a term used in United States financial services regulations. It is a natural person, a company or other organization that trades securities for its own account or on behalf of its customers....
in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
The exam is a six-hour, 260 question test (250 of which count towards the final score) that is owned, maintained and administered by the Financial Industry Regulatory Authority
Financial Industry Regulatory Authority
In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. ...
(FINRA), which covers a broad range of investments including stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
s, bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
, options
Option (finance)
In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the...
, limited partnership
Limited partnership
A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners . It is a partnership in which only one partner is required to be a general partner.The GPs are, in all major respects,...
s, and investment company products (e.g., open- and closed-end funds
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...
). As of November 7, 2011, candidate must answer at least 72% of the questions correctly in order to pass. Upon passing the test, one is granted a Series 7/General Securities license.
The Series 7 license is the most comprehensive of several securities licenses that permit an agent to communicate with retail investors. For this reason, many account managers, analysts, and other executives in the employ of a registered Broker/Dealer hold Series 7 licenses. To satisfy the securities dealing requirements of some states, Series 7 license holders must also hold either the Series 63 license or the Series 66 license, depending on the state the licensee works in as well as the state his/her clients reside in.
Typically, the average score of test-takers is around 73%, with around 66% of test-takers achieving a passing score. While one can study from the content outline provided by FINRA, many choose to use the materials of a third-party training vendor.
In November 2010 registration cost $265 according to FINRA.
| Test Breakdown | # of Questions | % of Exam |
|---|---|---|
| Seeks Business for the Broker-Dealer through Customers and Potential Customers | 68 | 27% |
| Evaluates Customers’ Other Security Holdings, Financial Situation and Needs, Financial Status, Tax Status, and Investment Objectives | 27 | 11% |
| Opens Accounts, Transfers Assets, and Maintains Appropriate Account Records | 27 | 11% |
| Provides Customers with Information on Investments and Makes Suitable Recommendations | 70 | 28% |
| Obtains and Verifies Customer’s Purchase and Sales Instructions, Enters Orders, and Follows U | 58 | 23% |
See also
- Registered RepresentativeRegistered RepresentativeA Registered Representative, also called a General Securities Representative, a Stock Broker, or an Account Executive, is an individual who is licensed to sell securities and has the legal power of an agent....
- List of Securities Examinations
- Investment Company Products/Variable Life Contracts Representative Exam (Series 6)
- Uniform Securities Agent State Law Examination (Series 63)
- U.S. Securities and Exchange Commission
- Securities fraudSecurities fraudSecurities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws....
- White Collar Crime