Why Do You Need a Series 7 Certificate?
What It Is:Series 7 is a license that is required before investments can be distributed by an individual. People who pass the exam for a Series 7 license qualify to be an authorized agent of broker-dealers in the United States.How It Works/Example:To have a Series 7 license, the candidate must pass the Series 7 exam (also called the General Securities Representative Examination). That examination mainly covers the seven vital functions performed by registered representatives: seeking company for the broker/dealer, considering customer requirements and ambitions, informing clients, managing customer records and account records, detailing the securities markets and the facets that influence them, executing orders for clients, and checking client portfolios. The Financial Industry Regulatory Authority( FINRA) includes 250 multiple-choice questions and regulates the test.The Series 7 evaluation is six hours long. The candidate must answer at least 70% of the 250 questions correctly to pass.In general, an individual cannot officially advise clients, get transactions, or perform transactions for clients until he or she’s passed the Series 7 exam, obtained the corresponding license.Although a Series 7 license permits the holder to sell a broad selection of securities, it doesn’t enable the holder to sell commodities or futures (this requires a three license ).Why It Matters:The Series 7 exam is an important step in making sure brokers understand and have mastered a body of information about markets, expense tools, securities law, and moral behavior. As such, traders are gained by the existence of the Series 7 requirement by requiring some amount of a standard knowledge base among agents.
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