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What Is the Series 57 License?


A Series 57 license allows brokers to trade equities and convertible debt securities in the U.S. To obtain one, you must pass the Series 57 exam. This test covers topics like equity trading concepts and regulations around the financial services industry. It’s administered by the Financial Industry Regulatory Authority (FINRA). It can be an important certification for financial advisors looking to boost their capabilities and earnings.

What Is the Series 57 License?

The Series 57 license permits brokers to engage in Nasdaq, New York Stock Exchange (NYSE), over-the-counter (OTC) and proprietary trading. A person generally holds a Series 57 license for a broker-dealer firm in the U.S. to employ him or her. In fact, these companies must register with FINRA.

FINRA also administers the exam you’re required to pass in order to get your Series 57 license. The exam is structured as a multiple-choice test designed to assess your ability to engage competently in your day-to-day tasks as an entry-level equity trader.

Prior to 2016, the Series 57 exam existed as the Series 55 exam. However, FINRA changed the exam to reflect high-frequency trading best practices. The organization also aimed to tighten regulations and protect investors by placing stricter standards on equity traders.

Series 57 Exam Prerequisites and Requirements

Before taking the Series 57 exam, you must pass the Securities Industry Essentials (SIE) exam. In addition, you have to be employed by a firm that’s a member of FINRA. However, if you passed the Series 55 or Series 56 before the update that went into effect in January 2016, you don’t have to take the Series 57 test. Instead, you’d be grandfathered in.

Series 57 Exam Structure

You take the Series 57 exam on a computer, but you’re not allowed to access any reference material during the test. You are provided with writing material and a basic calculator, though. Here are the basics for the Series 57 Exam:

  • Questions: 50
  • Duration: 105 minutes
  • Passing Score: 70%

You should answer every question as there is no penalty for guessing. The breakdown of content areas is as follows:

  • Trading Activities: 82% (41 Questions)
  • Trade Reporting, Record Keeping, Clearance and Settlement: 18% (9 questions)

How to Pass the Series 57 Exam

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Because the Series 57 test is fairly new, there are not many study materials out there. Nonetheless, you should get your hands on some. Your firm may provide these to you. Or you can search online. Some programs combine textbooks with video and interactive content.

Below, we list some tips to guide you in your studies

  • Read the entire book
  • Take practice exams and answer practice questions
  • Review the answers you got wrong
  • Reflect on the chapters you found most difficult
  • Study for several hours
  • Don’t cram, but understand all concepts detailed in the study material
  • Take extensive notes

In addition, several equity traders who passed the exam say the questions are designed to trick you, so it’s important to understand what the material really means. Some questions also deviate from equity trading best practices. For example, some questions cover topics like retirement and margin accounts. However, ultimately the right way to pass the exam will depend on your own strengths and weaknesses.

Series 57 Exam Day

Aim to arrive at the testing center at least 30 minutes before the scheduled start time. This will provide you with ample time to complete the entire registration process successfully. In addition, you’re not allowed to bring any reference material. According to FINRA, you’re also not allowed to bring personal items such as the following.

  • Watches
  • Large Jewelry
  • Phones
  • Books
  • Briefcases
  • Backpacks

However, you will be provided with a four-function calculator, a dry-erase board and dry-erase pens. You may need these, as some questions require the use of charts, graphs and tables. If you arrive more than 30 minutes late to the exam site, you won’t be allowed to take it that day.

Can I Take the Series 57 Exam Twice?

Generally, FINRA allows you to retake the Series 57 exam 30 days after you first took it. But if you have failed the test at least three times in a row, you must wait at least 180 days before retaking it.If you’re employed by a FINRA member firm, your company must request the exam on your behalf through Web CRD.

After Taking the Series 57 Exam

Since the test is administered via computer, you’ll get your test results briefly after completing and submitting your test. If you pass, you’ll be notified but won’t get additional details about your exam, but you also won’t need those details since you’ll be ready to receive your Series 57 license.

Test-takers who fail receive a detailed report. You should refer to this in order to figure out what topics and sections you should spend more time studying before you take the exam another time. It’s important to make sure you look at your study practices the first time if you need to re-take the exam so that you are actively making the right changes to see yourself succeed next time.

The Bottom Line 

series 57

You need your Series 57 license to trade equities as a broker. To obtain it, you have to take a rigorous exam designed to assess your ability to complete common tasks required of entry-level brokers. It would also cover the latest regulations you must abide by. The test-makers want the test to be tricky, so careful studying is key. You can find some study materials online but ultimately the right way to prepare will depend on your own strengths and weaknesses.

Tips on Taking the Series 57 Exam

  • If you’d like some professional help understanding how money management works then you may want to seek the advice of a professional financial advisor. If you don’t have a financial advisor, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Try to study as many hours as you can, but don’t cram. Try to understand what the concepts around the study material really mean and how you’d apply it in practice. You should apply similar study habits to those you employed when taking the Series 7 exam.

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