Series 7 Exam: Overview, Licensing, and Key Requirements

The Series 7 is an important exam issued by FINRA. Called the General Securities Representative Qualification Exam, it lets people sell many types of securities, such as stocks and bonds, but not commodities, futures, real estate, or insurance products. It is required for stockbrokers in the U.S., and candidates must also first pass the SIE exam. The exam includes multiple-choice questions, has a set time limit, and requires a passing score to earn the license.

What Are the Series 7 Exam Requirements?

Since Oct. 1, 2018, candidates must pass both the SIE and Series 7 exams to obtain General Securities registration. According to FINRA, the SIE is an introductory-level exam that "assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry, such as types of products and their risks; the structure of the securities industry markets, regulatory agencies and their functions; and prohibited practices." If you need more information on the SIE, FINRA's SIE exam content outline provides more details.

Candidates who want to take the Series 7 exam must be sponsored by a FINRA member firm or other applicable self-regulatory organization (SRO) member firm. The member firm must file a Form U4 (Uniform Application for Securities Industry Registration or Transfer Form) for the candidate to be registered for the licensing exam. Non-FINRA members should use the Test Enrollment Services System (TESS) in order to register for the exam. FINRA governs the activities of securities firms and registered brokers, ensuring that anyone who sells securities products is qualified and tested.

Understanding the Structure of the Series 7 Exam

The Series 7 is structured as follows:

1. Seeks Business for the Broker-Dealer from Customers and Potential Customers: 9 questions
2. Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives: 11 questions
3. Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets, and Maintains Appropriate Records: 91 questions
4. Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions: 14 questions

The Series 7 exam consists of 125 multiple-choice questions, lasts 225 minutes, and costs $300. The passing score is 72%.

Prior to Oct. 1, 2018, the Series 7 exam contained 250 questions covering five major job functions. The exam duration was six hours, had no prerequisites, and cost $305. A score of 72% was required to pass.

FINRA does not provide candidates with any physical certificate as proof of exam completion. Current or potential employers who wish to view proof of completion must access this information through FINRA's Central Registration Depository (CRD).

Completion of the Series 7 exam is a prerequisite for many other securities licenses, such as the Series 24, which permits the candidate to supervise and manage broker activities.

The Bottom Line

The Series 7 exam, called the General Securities Representative Qualification Exam, is required for anyone in the U.S. who wants to sell most securities. It allows professionals to sell assets like stocks and bonds, but not things like commodities or futures. The exam covers topics like investment risks, taxation, equity and debt instruments, options, retirement plans, and regulations. To take the exam, candidates must pass the SIE exam and be sponsored by a FINRA or SRO member firm. The Series 7 has 125 multiple-choice questions, lasts 225 minutes, costs $300, and requires a 72% passing score.