What is Series 63?
A securities test and license known as the Series 63 allows its bearer to request orders for any security in a given state. The candidate must pass a test and know about fiduciary duties and ethical behavior to be granted a Series 63 license.
Understanding Series 63
The North American Securities Administrators Association (NASAA) developed the Series 63 test, and as of December 2018 it had updated its questions to reflect recent changes to the tax code. In January 2019, the tax code 2018 was gradually phased out in question types.
In most states in the union, prospective registered representatives must pass Series 63, formerly known as the Uniform Securities Agent State Law Examination. Nevertheless, it is unnecessary and optional in Colorado, the District of Columbia, Florida, Louisiana, Maryland, Ohio, or Puerto Rico.
The test was created to prepare applicants for positions in a state’s securities business and to offer investment products, including unit investment trusts, variable annuities, and mutual funds. The fundamentals of state securities laws are covered in the test. State-specific securities laws, sometimes known as “blue-sky laws,” were created to control the selling of securities.
Conditions for the Format of the Series 63 Exam
The Financial Industry Regulatory Authority (FINRA) administers the Series 63 test. The test consists of sixty multiple-choice questions. Of the 60 questions, or 72%, 43 are required for passing. The applicant has been given 75 minutes to finish the test. The test will cost $135 as of March 2020.
The North American Securities Administrators Association (NASAA) created the test in collaboration with members of the securities industry. The NASAA Statement of Policy and Model Rules and the Uniform Securities Act 1956 must be familiar to test takers. After finishing Form U-10, there are no requirements to take the Series 63 exam, which is an entry-level test.
Exam Subjects
Principles of state securities laws and rules against dishonest or unethical behavior are covered in the Series 63 test. Roughly half of the inquiries deal with rules, 10% with administrative guidelines, 20% with consumer correspondence, and 25% with morality and corporate responsibilities.
Exam subjects include fiduciary duty with client money and securities and registering different individuals and securities. See the test specifications published by NASA for further information.
The Series 7 and Series 6 licensing tests, but not the 63, may be taken only after passing the Securities Industry Essentials Exam (SIE). Broker-dealers need to get the Series 7 or Series 6 license and the Series 63 license to sell securities.
Conclusion
- In addition to passing a test, applicants for the Series 63 license must be knowledgeable about fiduciary duties and ethical behavior.
- All prospective registered representatives must pass the test, including state securities legislation and restrictions against dishonest or unethical actions in most U.S. states.
- The District of Columbia, Puerto Rico, Colorado, Florida, Louisiana, Maryland, and Ohio do not need Series 63.
