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The Financial Industry Regulatory Authority (FINRA) polices the securities industry and intends to prevent brokers from taking advantage of investors. The government agency writes and enforces rules that govern thousands of securities sellers. The agency also regulates several stock markets and exchanges.
To get a FINRA license, a person must score at least a 70 percent on a test. FINRA offers a range of tests for different subjects related to the financial industry. For example, to become a stockbroker and sell securities, you must pass the Series 7. FINRA has tests for those who want to supervise the sale of securities and another for a general securities principal, which is a step above a supervisor.
To take a FINRA test, a company that belongs to the organization must sponsor you. The examinations can last anywhere from 1.5 hours to five hours.
Some tests require prerequisites. For example, FINRA requires that people taking the Series 66 for selling securities and advising people on investments also pass the Series 7 before they officially register as a licensee. Most tests simply require that you be associated with a FINRA member company.
FINRA licensee candidates must undergo an extensive background check that includes a search of criminal records and driving history. The check also verifies a candidate's college degrees and work history, as well as confirms the validity of his Social Security number. Candidates must get fingerprinted. Financial firms must ensure that its advisers won't steal from or cheat customers. FINRA publishes brokers' background information online so that prospective customers can research the person they are considering choosing to handle their money.
FINRA will deny a license if a candidate has lied to an organization that regulates itself, such as the federal Securities and Exchange Commission (SEC), has committed a felony in the past 10 years or has been barred by the SEC, among other reasons.
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