What is the SIE Exam (Securities Industry Essentials)

Written by: Ethan Peyton

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The Securities Industry Essentials (SIE) exam is an introductory test that’s great for individuals looking to kick start their career in the securities industry and set themselves up to obtain more specialist licenses.

In this article on the SIE Exam, we’ll provide a straightforward overview of the purpose and structure of this examination, as well as how to pass on your first attempt.

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SIE Exam Overview

The SIE exam is an introductory test that all prospective securities professionals must take in order to get licensed in the securities industry. Introduced by the Financial Industry Regulatory Authority (FINRA) in 2018, its primary purpose was to streamline the testing process for securities professionals.

Up until this point, candidates were examined on similar foundational content across different, series-specific exams. However, the SIE exam grouped together all these common introductory topics in one place to simplify the situation for candidates interested in demonstrating basic industry knowledge.

The second key reason for the introduction of the SIE exam was to make it easier for people to enter the securities industry. Before, anyone wanting to take any of FINRA’s series-specific exams had to first be sponsored by a brokerage that employed them — which was a significant hurdle for those looking to enter the industry, such as career changers or university students.

With the SIE exam, individuals can now take this initial test before securing employment, which opens up the industry to a broader range of people and facilitates easier entry into the field of securities.

SIE Exam Requirements

As part of FINRA’s initiative to make the securities industry more accessible, the only prerequisite that test-takers need to meet is a minimum age requirement of 18 years of age. Note that you’ll need to present a valid photo ID on the day in order to prove that you satisfy this criteria.

The SIE Exam can be taken at any Prometric Test Center, which are located in various locations across the US, or through a firm that has access to FINRA’s Central Registration Depository.

The exam also carries a fee of $80 that you’ll be required to pay as part of the registration process.

What is on the SIE Exam

The SIE exam is designed to evaluate your foundational understanding of the securities industry across four key sections, which we’ve broken down for you in more detail in the table below.

SectionDescriptionPercentage of ExamNumber of Questions
1Knowledge of Capital Markets16%12
2Understanding Products and Their Risks44%33
3Understanding Trading, Customer Accounts, and Prohibited Practices31%23
4Overview of Regulatory Framework9%7

The exam is made up of 85 multiple-choice questions (10 of which are unscored) with four options that you’ll have 1 hour and 45 minutes to complete. Most of these questions will involve common securities industry knowledge and concepts that are not often based in a single rule, such as:

  • The characteristics of investment products
  • The relationship between a bond’s price and yield
  • The rights of a common stockholder

However, there are also a number of questions that are based on certain specific regulations relating to securities. This includes, but is not limited to, the following Acts:

  • The Securities Act of 1933
  • The Securities Exchange Act of 1934
  • The Investment Company Act of 1940
  • The Investment Adviser Act of 1940

You will receive your test results immediately after finishing the SIE exam, and an official copy will be sent to FINRA. Any score above 70 in the SIE is considered a passing score, which will be valid for four years.

Note: For a more detailed look at what this introductory level exam assesses, we recommend checking out FINRA’s SIE Exam Content Outline.

Who Needs to Take the SIE Exam

Anyone aspiring to get licensed to sell securities who is not currently sponsored by a FINRA member firm will be required to take the SIE exam.

While insurance agents are not all required to take the SIE exam, choosing not to become licensed in securities can limit their ability to work with clients. This is because it enables them to provide their clients with the option to invest in products tied to the securities market alongside their retirement and life insurance plan offerings.

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How to Pass the SIE Exam

Now that you have an understanding of what the SIE exam is, who it’s designed for, and the opportunities it can open up for you, we’ll explore some tips to ensure you pass it on your first attempt.

  1. Use Quality Study Resources: Many of our readers find it invaluable to use an online course in order to guide their preparation for the SIE exam. Reliable study resources are crucial as they ensure you’re studying accurate, up-to-date information, and covering all the necessary topics to excel in the exam.
  2. Follow a Study Schedule: Consistent and structured study sessions are key to thoroughly covering all exam topics and avoiding the pitfalls of last-minute cramming. Create a daily study routine that fits into your lifestyle and commitments, ensuring that each study session is focused and productive — just make sure to be realistic and factor in personal events, work obligations, and other potential distractions.
  3. Focus on Application: While it’s important to have a good knowledge of how the financial concepts tested on the SIE work in theory, having an understanding of the practical application of these concepts is essential. Applying financial concepts to practical situations enhances your problem-solving skills and prepares you for the types of questions and challenges you may face in the exam and beyond.
  4. Take Advantage of Mock Exams: Regular practice tests are crucial for familiarizing yourself with the exam format, question styles, and time constraints. By taking these exams, you can identify areas of strength and weakness within the SIE’s content and focus your studies more effectively. Experiencing a variety of questions also reduces the likelihood of being surprised on exam day.

Note: FINRA offers an official practice test for prospective test-takers to take advantage at no cost.

Alternatively, for more in-depth guidance on how to succeed in this exam you can check out our article on How to Pass the SIE.

After You Pass the SIE Exam

After passing your SIE exam you may want to tackle a more in-depth series-specific exam to be able to work in a greater number of positions within the securities industry.

Below, we’ve broken down some of the most common specialist exams, which are also regulated and administered by FINRA.

Series 6 and 63 Licenses

Most professionals new to securities look to obtain the Series 6 License, which is also known as the limited-Investment Securities License. After achieving this license, you’ll be able to market and sell mutual funds, variable annuities, variable life insurance, unit investment trusts, and municipal fund securities, such as 529 savings plans.

After the SIE Exam, this is one of the most popular licenses in the securities industry, particularly with bankers and insurance agents, as it aligns with the nature of many insurance/financial products that are combined with securities.

This license is often obtained alongside the Series 63 license, which is required to be able to sell securities or variable insurance products in any U.S. state. The Series 6 license will allow you to sell certain securities products, while the Series 63 license ensures that you’re compliant with state-specific securities laws.

It’s worth noting that you’ll be limited to selling packaged securities products with these two licenses. Products such as individual stocks, bonds, or options, which fall under the purview of the Series 7 and other licenses, cannot be handled.

For a more in-depth look into this, check out our What are the Series 6 and 63 Securities Licenses article.

Series 7 License

Unlike the Series 6 or Series 63 licenses, which are more limited in scope, the Series 7 allows for the trading of virtually all types of securities products, including public and private placements of corporate securities, mutual funds, ETFs, venture capital, and hedge funds, among others.

The Series 7, or General Securities Representative, license is generally recommended for professionals looking to be able to offer comprehensive services in the securities market. Its wide scope makes it a great option for those looking to advance in the field of securities and investment, opening doors to more diverse and complex financial transactions and advisories.

It’s worth noting that, since November 7, 2011, you’ll also need to obtain a Series 52 license in order to engage in structuring municipal securities underwritings or other advanced municipal securities activities. Without it, Series 7 license holders are limited to sales and purchases from customers in activities involving municipal securities.

For a more in-depth look into this specialization, check out our article on the Series 7 License.

Series 65 License

States also have their own regulations when it comes to securities licensing, with prospective professionals being required to pass additional tests which focus on these state regulations. These exams are designed by the North American Securities Administrators Association (NASAA) with the help of FINRA.

The Series 65 Exam, which is also known as the Uniform Investment Advisor Law Exam, is one of these state-specific licenses that enables individuals to charge fees for financial investment advice they provide to clients. This includes advising clients on securities-based products and fee-based services related to investments.

This license is distinct from federal FINRA licenses, like Series 6 and Series 7, which allow individuals to market and sell securities, as it focuses specifically on the ability to provide investment advice. This means that the Series 65 license is not a replacement for a Series 6 or Series 7 license, one of which will be needed in order to fully engage in the securities business.

For a more in-depth look into this specialization, check out our article on the Series 65 License.

Series 66 License

The Series 66 license is another commonly sought after state-specific qualification that’s popular among financial advisors. Unlike the Series 63 and Series 65 licenses, which separately cover aspects of securities transactions and investment advice, the Series 66 combines these functions — making it a better option for those seeking a more streamlined path to becoming fully licensed.

With the Series 66 license, you’ll be able to both offer financial advice and conduct transactions in securities-based products. However, you’ll also need to pass the Series 7 exam in order to fully utilize this license — this requirement ensures that license holders have comprehensive knowledge and capabilities in the financial services industry.

For a more in-depth look into this specialization, check out our article on the Series 66 License.

Other Qualification Exams

There are numerous other advanced exams that you may need to take if you’re looking to work in the securities industry, depending on your area of specialization. These include the Series 22 Exam, Series 57 Exam for Securities Traders, Series 79 for Investment Banking Representatives, and Series 82 Exam for Private Securities Offerings Representatives.

For the most part, the majority of insurance salespeople will need their state insurance license, the Series 6 license, and a Series 63 license to transact a majority of products. However, if you’re looking to be able to offer more comprehensive financial advice, you’ll typically need to replace the Series 6 with a Series 7 license.

For a more detailed look at the different series-specific exams you can take, check out our Securities Licensing page.

What is the SIE Exam FAQ

What does the SIE qualify you for?

The Securities Industry Essentials (SIE) Exam is the first exam you will take on your path to becoming licensed to sell securities. It’s a great way to improve your industry knowledge, whether you’re working as a life insurance agent or a financial advisor. For a more detailed look at what the SIE qualifies you for, check out our article on Securities Licensing.

How hard is the Securities Industry Essentials exam?

This FINRA exam is quite challenging, but preparing and studying for the exam enables you to pass the exam on the first try. When studying for the exam, you can choose to take online study courses, whether self-paced or in an instructor-led classroom format. You can find out more information about the exam in our What is the SIE Exam article.

Do you need to take the SIE before Series 7?

Yes, the Securities Industry Essentials (SIE) exam is an introductory level exam that you must have under your belt in order to obtain a Series 7 license, as it provides the basic securities industry information needed for an additional qualification exam. That being said, the exams for these two licenses can be taken alongside each other.

Is passing the SIE a big deal?

Passing the SIE is an important step in a financial services career. It demonstrates a basic understanding of the securities industry, including products, risks, and the different regulatory agencies. While foundational, it’s essential for prospective securities industry professionals to be able to progress onto advanced securities exams and show prospective employers you’ve mastered the fundamentals.

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