Before it was retired in 2018, the Series 62 license was one of the most common certifications among financial professionals, allowing them to become registered representatives authorized to trade corporate equities and debt securities. Read on to learn what you need to do if you previously passed the Series 62 exam and what to expect from the updated, replacement exam, known as the Securities Industry Essentials test.
What Was the Series 62 Exam?
The Series 62 exam was administered by the Financial Industry Regulatory Authority (FINRA), a government-authorized nonprofit that oversees U.S. broker-dealers. The four core topic areas that were tested for in the Series 62 exam included:
- Types and characteristics of securities and investments: The first section of the exam covered equity securities; asset-backed securities; corporate debt securities; U.S. government and agency securities; investment companies; and derivatives and structured products.
- The market for corporate securities: The second portion focused on topics related to the Securities Exchange Act of 1934, which governs the secondary market; issuing and trading corporate securities; and FINRA conduct rules.
- Evaluation of securities and investments: The third section of the Series 62 exam tested subjects including investment planning and investor suitability; the economy; securities analysis; and tax consequences of securities transactions.
- Handling customer accounts and securities-industry regulations: The final section covered the Securities Investor Protection Act; extensions of credit in the securities industry; client accounts; transactions in accounts; account documentation; customer delivery and payment; general regulations of brokers and dealers; and FINRA regulations.
How the Series 62 Exam Stacks Up to the SIE Exam
Those still holding a current Series 62 license are certified as Corporate Securities Representatives, which means they’re authorized to trade everything from corporate bonds and equities to preferred stocks and some asset-backed securities.
For their part, clients can be confident that a Series 62 license holder has demonstrated advanced knowledge of security analysis and characteristics, corporate equity and bond markets, and industry regulations and handling customer accounts.
The Securities Industry Essentials (SIE) exam streamlines several previous Series exams into one general test. Unlike the Series 62 exam, SIE test-takers do not have to work for or be sponsored by a FINRA member firm. However, sponsorship is required to take one of several “top-off” exams targeted to more specific fields within finance, like the Series 6 (Investment Company Representative) and the Series 7 (General Securities Representative).
Since no sponsorship is needed for the SIE, candidates have a generous four years during which a passing test score will be valid. The goal for most who have passed the SIE is to find employment in that timeframe, then have their new employer sponsor a top-off exam.
When the SIE and its corresponding top-off exams debuted on October 1, 2018, other low-volume tests were retired, including the Series 62.
The SIE is considered an introductory-level exam. Candidates have one hour and 45 minutes to answer 85 questions. Like the previous Series 62 exam, the new SIE test has four sections, including:
- Knowledge of capital markets
- Understanding products and their risks
- Understanding trading, customer accounts, and prohibited activities
- Overview of regulatory framework
Series 62 License vs. Series 7 License
The Series 62 exam was often compared to the still-available Series 7 exam. Both licenses allow their holders to trade a wide range of securities.
A Series 7 license is required for all stockbrokers and is considered an entry-level exam. Officially called the General Securities Registered Representative Exam (GSRE), the Series 7 tests knowledge of sales of corporate securities, municipal securities, investment company securities, variable annuities, direct participation programs, options and government securities.
Candidates must have already passed the SIE before taking the Series 7 exam — one of FINRA’s “top-off” tests — for which they need sponsorship by a FINRA member firm.
The Bottom Line
The Series 62 license allowed for the trade of all stocks and bonds, warrants, rights, REITS, mortgage-backed securities, money markets and closed-end investment companies. If you’ve already taken and passed the exam, and your license is current, there is nothing further you need to do. On the other hand, if you’re just starting in the financial services field, you will have to pass the SIE first, though you can do so independent of working for a FINRA member firm.
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