SEC approves plan to streamline competency exams for securities professionals

The U.S. Securities and Exchange Commission (SEC) has approved the Financial Industry Regulatory Authority’s proposed rule to streamline competency exams and expand opportunities for securities professionals seeking to enter or re-enter the industry.

Under the new structure, all new job applicants will be required to pass a general knowledge examination, the Securities Industry Essentials (SIE), and a revised qualification examination — such as the General Securities Representative (Series 7) examination – which is appropriate to their job function.

The rule will take effect Oct. 1, 2018.

“This is an important change built upon the need to streamline the examination process and eliminate redundancies in qualification and registration requirements,” FINRA President and CEO Robert Cook said. “The new structure brings greater consistency and uniformity to the process for entering and returning to the brokerage industry.”

The new SIE will test fundamental securities-related knowledge, including knowledge of basic products, the structure and function of the securities industry, the regulatory agencies and their functions, and regulated and prohibited practices. The SIE will be available to everyone, including those individuals not associated with member firms.

The revised qualification examinations will test knowledge relevant to day-to-day activities, responsibilities and job functions.

The restructured program eliminates duplicative testing of general securities knowledge and eliminates several registration categories that have become outdated or have limited utility.