August 9, 2022

Types of Securities Licenses

Written by: Mary Gerardine

Cartoon man holding types of Securities Licenses

    securities license allows you to market and sell certain types of investments. It’s a requirement to work in many different professions, including some within the insurance industry.

    The two regulators that oversee securities licensing are the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA). FINRA and NASAA oversee different licenses, and the required licenses vary by profession.

    Read on to learn about the different types of FINRA and NASAA licenses, who needs them, and how to get them.

     

    Why Get a Securities License?

    Obtaining a specific securities license not only is a requirement for a number of different jobs in the financial services industry, but also can open many doors professionally and potentially lead to increased compensation.

    Stockbrokers and investment advisors commonly come to mind when people think about professions that require a securities license. But, life insurance producers also must obtain certain securities licenses if they plan to market and sell securities or variable-contract life insurance products. While you can work as a life insurance agent without selling these types of products, that might limit your potential profits.

     

    Types of FINRA Licenses

    FINRA administers many different types of securities licenses. Here are some of the most common FINRA licenses:

    • Series 3, National Commodities Futures Exam – A passing score on this licensing exam authorizes someone to sell commodities futures contracts and options on commodities futures contracts.
    • Series 6, Investment Company and Variable Contracts Products Representative Exam – Geared toward life insurance professionals, passing this exam will authorize someone to sell certain types of insurance, mutual funds, and variable annuities.
    • Series 7, General Securities Representative Exam – More comprehensive than Series 6, passing this exam authorizes someone to market and sell a wider range of securities-based products. These products include corporate stocks and bonds, mutual funds, exchange-traded funds (ETFs), and options on mortgage-backed securities. It’s typically required for financial advisors and some insurance professionals.

     

    Recommended: Check out our articles on how to pass the Series 6 and Series 7 licensing exams.

     

    FINRA considers the above licenses as “representative-level” licenses. Additional representative-level licenses include:

    • Series 22, Direct Participation Programs Limited Representative Exam
    • Series 57, Securities Trader Representative Exam 
    • Series 79, Investment Banking Representative Exam
    • Series 82, Private Securities Offerings Representative Exam
    • Series 86/87, Research Analyst Exams
    • Series 99, Operations Professional Exam

     

    FINRA also issues a category of “principal-level” licenses required for certain higher-level professions, such as a compliance officer or someone who supervises option sales. FINRA’s principal-level licenses include:

    • Series 4, Registered Options Principal Exam
    • Series 9/10, General Securities Sales Supervisor Exams
    • Series 14, Compliance Officer Exam
    • Series 16, Supervisory Analysts Exam
    • Series 23, General Securities Principal Exam – Sales Supervisor Module
    • Series 24, General Securities Principal Exam
    • Series 26, Investment Company and Variable Contracts Products Principal Exam
    • Series 27, Financial and Operations Principal Exam
    • Series 28, Introducing Broker-Dealer Financial and Operations Principal Exam
    • Series 39, Direct Participation Programs Principal Exam

     

    How To Get a FINRA License

    The exact details can vary a bit, depending on the specific license, but the main steps to get a FINRA license are similar for each type. They include:

    1. Pass the Securities Industry Essentials exam.
    2. Secure a FINRA-affiliated sponsorship.
    3. Register for the FINRA license exam.
    4. Study for the FINRA license exam.
    5. Take and pass the FINRA license exam.

     

    Step 1: Pass the Securities Industry Essentials Exam

    The Securities Industry Essentials (SIE) Exam covers the basics of the securities industry, and passing it is a prerequisite to getting a FINRA license. Your passing score will remain valid for four years.

     

    Step 2: Secure a FINRA-Affiliated Sponsorship

    In order to obtain a FINRA license, you must secure sponsorship from a FINRA-registered company or organization. Typically, this will be your employer. The sponsorship process involves submitting a completed Form U4, and then providing some additional personal and professional information.

     

    Step 3: Register for the FINRA License Exam

    You have 120 days after submitting Form U4 to take the FINRA exam. It’s a good idea to reserve your desired exam date as soon as possible to ensure it’s available.

    Schedule your exam via the Prometric website or call (800) 578-6273. Have your FINRA ID number, phone number, and name of the exam ready.

     

    Step 4: Study for the FINRA License Exam

    FINRA exams cover a lot of information and can prove challenging. As such, we strongly recommend creating a study plan to ensure you’re prepared to pass the exam. This can include enrolling in a study course or just buying study guides to use on your own.

     

    Step 5: Take and Pass the FINRA License Exam

    FINRA license exams are administered at a testing center. You’ll have an allotted amount of time to complete the exam, which varies depending on the specific exam. When you finish, you’ll immediately be notified on the computer screen if you passed or failed. If you fail, you’ll generally need to wait about 30 days before you can retake the exam.

     

    Types of NASAA Licenses

    There are three main NASAA licenses related to state-specific securities laws. While NASAA regulates these licenses, FINRA administers the licensing exams. They include:

    • Series 63, Uniform Securities Agent State Law Exam – Specific to the securities laws of each state, passing this exam authorizes someone to use a Series 6 license to sell securities (except in Colorado, Florida, Louisiana, Maryland, Ohio, the District of Columbia, and Puerto Rico, where it’s not required).
    • Series 65, Uniform Investment Adviser Law Exam – This state-specific securities license allows individuals to market and sell securities as well as give financial advice related to securities. But, having a Series 6 or Series 7 license also is required.
    • Series 66, Uniform Combined State Law Exam – By passing this exam, someone can earn the most comprehensive state-specific license that’ll allow them to act as a financial advisor and transaction coordinator for securities-based products. But, having a Series 7 license also is required.

     

    How to Get a NASAA License

    Unlike FINRA licenses, NASAA licenses don’t require you to have sponsorship from a FINRA-registered company or organization before taking the exam. But, while NASAA regulates these licenses, FINRA administers the exams.

    Follow these four steps to get a NASAA license:

    1. Register for the NASAA license exam.
    2. Schedule the NASAA license exam.
    3. Study for the NASAA license exam.
    4. Take and pass the NASAA license exam.

     

    Step 1: Register for the NASAA License Exam

    If you’re employed and sponsored by a FINRA member firm for a NASAA license exam, the firm must file Form U4.

    If you aren’t sponsored by a FINRA member, you can go to the FINRA Exam Enrollment page and register for your NASAA license exam.

     

    Step 2: Schedule the NASAA License Exam

    After registering, you have 120 days to take the exam. Schedule your exam via the Prometric website or call (800) 578-6273. Have your FINRA ID number, phone number, and name of the exam ready.

     

    Step 3: Study for the NASAA License Exam

    NASAA exams cover a lot of information and can prove challenging. As such, we strongly recommend creating a study plan to ensure you’re prepared to pass the exam. This can include enrolling in a study course or just buying study guides to use on your own.

     

    Step 4: Take and Pass the NASAA License Exam

    NASAA license exams are administered at a testing center. You’ll have an allotted amount of time to complete the exam, which varies depending on the specific exam. If you fail the exam, you must wait 30 days before you may try again. If you don’t pass on the second attempt, you’ll face another 30-day waiting period. If you fail a third time, you’ll have to wait 180 days until you’re eligible to take it again.

     

    Types of Securities Licenses FAQ

    What are FINRA licenses?

    A FINRA license is a type of securities license that allows someone to market and sell certain types of investments. It’s required for a number of professions, including investment advisers, stockbrokers, and some life insurance professionals.

     

    What is a FINRA Series 7 license?

    A FINRA Series 7 license authorizes someone to market and sell a wider range of securities-based products, including corporate stocks and bonds, mutual funds, exchange-traded funds (ETFs), and options on mortgage-backed securities.

     

    What is the difference between a Series 6 and Series 7 license?

    Series 6 license is geared toward life insurance professionals, authorizing them to sell certain types of insurance policies, mutual funds, and variable annuities. A Series 7 license authorizes someone to sell those products as well as others, such as corporate stocks and bonds, mutual funds, ETFs, and options on mortgage-backed securities.

     

    What is a Series 63 license used for?

    Series 63 license is used in combination with a Series 6 or Series 7 license. It’s required in order to sell insurance policies tied to investments or other securities.

     

    Do you need a Series 63 license if you have a Series 7 license?

    Yes. You need a Series 63 license if you have a Series 7 license — except in Colorado, Florida, Louisiana, Maryland, Ohio, the District of Columbia, and Puerto Rico.




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