FINRA New Competency Exams

On Mar. 8, FINRA proposed rules to streamline competency exams.

  • New securities industry essentials exam expands entry opportunities for the industry.
  • Facilitate opportunities for professionals seeking to enter or re-enter finance sector.
  • Opportunity to show fundamental knowledge of requirements, before joining a firm.
  • Provides firms a larger pool of qualified candidate who have shown aptitude in area.
  • Creates a general knowledge examination and a specialized knowledge examination.
  • Removed Pre-Qualification
  • FINRA rules had required individuals who work for FINRA-firm to pass specific exams.
  • Individuals had to be associated with FINRA-firm, to be eligible to take an exam test.
  • In 2016, FINRA had more than 90,000 representative-level exam candidates at firms.
  • Ended duplicative testing, and barriers to demonstrate and maintain a qualification.
  • Persons Without Experience
  • Revisions facilitate access for individuals without prior securities industry experience.
  • To take FINRA general knowledge exam, called the securities industry essential (SIE).
  • May include investor, recent college graduate or professional seeking a second career.
  • Individual must also pass second more specialized exam, and be associated with firm.
  • Specific Requirements
  • Representative-level registrants will take the SIE, and then choose specialized exams.
  • The model will eliminate duplicative testing of general securities knowledge in exams.
  • Individuals who do not work for FINRA-firm, and members of the public, may take SIE.
  • Give individuals the flexibility, to demonstrate their knowledge of securities industry,
    and its regulatory requirements before joining FINRA-regulated firm, as was required.
  • Transfers to Affiliates
  • Person transferring to group affiliate, may get waiver for credentials to be reinstated.
  • If return to industry in a 7-year period and meet the requirements of waiver program.
  • No need to re-take qualification exams, if complete continuing ed, no adverse events.
  • Currently, if an individual is registered and transfers to affiliate for two or more years,
    the individual’s qualification expires and they must re-take an exam to be re-qualified.
  • Effectiveness
  • Comment period is open for 21 days following pending publication in federal register.

Regulators FINRA
Entity Types B/D
Reference FINRA-2017-007, PR, 3/8/2017
Functions Compliance; Exams; Legal; Operations; Registration; Training; HR
Countries United States of America
Products Fund Mgt; Securities
Regions Am
Rule Type Proposed
Rule Date 3/8/2017
Effective Date 3/29/2017
Rule Id 31380
Linked to N/A
Report Issue 3/15/2017
Report Section US Investment

Last substantive update on 03/08/2017