Securities Licensing: The Growing Importance Of Regulation

The push for more progressive regulation for securities licensing in the United States has been on the rise since the Democrats took office in January this year. The inauguration of then-President-elect Joe Biden saw a sharp increase of new regulations and changes to private and public securities in the U.S. With cryptocurrency taking off, and digital assets becoming more commonplace, the new chairman of the Securities and Exchange Commission (SEC) Gary Gensler has investors worried as he’s looking to fuel increased regulation for cryptocurrencies which will likely hurt other securities trading volumes and scare off new investors.

There has been a tuck-and-pull since the appointment of Gensler as chairman of the SEC, the commission is hard at work trying to crack down on fraudulent spectators. New rules and stronger regulations have already seen the SEC establishing rules that will help mitigate US investments and assets being held offshore and that are not entirely regulated by governments. Foreign assets will need to be placed in a central securities depository that meets ‘eligible foreign depository’ CDS specifications. As the national government and the SEC tightens their regulations on securities, many are feeling reluctant that future investments and capital gains will stifle under new regulations.

Although these changes may leave many displaced within the market, securities licensing is still a key component for many financial advisors to operate freely, and under jurisdiction within the US. A securities license helps advisors to find work, assist investors, and better understand how the market works. Obtaining a securities license isn’t something that’s just a stone's throw away, and potential candidates must understand and know how they can obtain their license in a few simple steps.

Obtaining your securities license - what you should know first

License approval and applications are regulated and administered by the Financial Industry Regulatory Authority (FINRA) with additional procedures determined by the North American Securities Administrators Association (NASAA).

There are four main types of licensing exams, these include:

Series 6

To advance their career, individuals will first need to undergo a Series 6 examination. Series 6 allows the licensed individual to include mutual funds, investment, and insurance products in their offering.

Series 7

Sometimes referred to as the General Securities Representative Exam, the Series 7 license helps you fast-track your career to become a financial advisor. You can complete the Series 6 and 7 exams at the same time but will need to pass both to qualify.

Series 63 and 65

For the most part, Series 63 focuses on state laws and regulations. This is also combined with life insurance products, so individuals looking to practice as a life insurance agent will be required to hold a Series 63 license.

The Series 65 allows the holder to include investment advisory services, covering state regulations, and allow holders to give securities advice.

Series 66

Finally, a Series 66 license puts you in a comfortable position, where the licensed individual will be able to perform all the functions that fall under the Series 63 and Series 65 license exams. Even more, individuals who hold a Series 66 will be able to process and advise on securities-related products and services. This license is also better known as the Uniform Combined State Law Exam.

You will be able to obtain multiple licenses, which in return allows you to market, sell and advise various securities from a variety of financial branches. To obtain these licenses you will need to undergo a rigorous process that involves examinations, background checks, applications, and a final review by FINRA or NASAA.

How to obtain your securities license?

Step 1 : Complete the Securities Industry Essential or SIE exam.

Step 2 : Become an active candidate of a FINRA-member firm or company.

Step 3 : You will have to register for a FINRA exam via your registered member company.

Step 4 : Study and practice your knowledge for your FINRA exam.

Step 5 : Pass the FINRA Exam.

Once you’ve completed all these steps successfully you will be notified on whether you’ve passed the exam or not. Once you have passed, you can then start practicing as a licensed securities agent.