Series 63
Candlefocus EditorApplicants must pass the one-hour, 80-question exam with a score of at least 72 percent in order to obtain a Series 63 license. It consists of questions that cover a vast range of concepts and topics in the securities industry. According to FINRA (the Financial Industry Regulatory Authority), these include relevant ethical practices, as well as fiduciary obligations and prohibited activities related to the securities industry.
It is designed to check that applicants have obtained an understanding of the applicable state laws and regulations of investment securities, to maximize the security of investors and customers. This is an important test, as without passing the Series 63, a securities professional would not be able to perform any investments activities, due to the violations of state laws and regulations.
Even though it may vary across statelines, many states, such as Alabama, Arizona, California and Georgia, require the Series 63 to be passed in order to gain the relevant securities licenses. It’s the responsibility of the securities professional to check with the relevant departments of their state and make sure that the Series 63 is necessary for the licenses in the desired field.
Seven U.S. states, including Colorado, Florida, Louisiana, Maryland, Ohio, the District of Columbia and Puerto Rico, do not require applicants to obtain the Series 63 before obtaining licensure. Although, that does not mean that securities agents and investment advisor representatives from these states do not have to abide to all the same ethical practices and fiduciary obligations.
The Series 63 is an important step in helping to assure the importance of protecting clients and investors by regulating and monitoring the securities industry in each respective state. Having the appropriate securities license is vital to all types of securities transactions, so it's important to make sure you understand all the requirements related to the professional securities services you will be providing.
By studying the various practices of ethical conduct, prohibited activities, and state regulations that are associated with the Series 63, persons wishing to become investment advisors, securities representatives, or investment banker representatives in the many U.S. states that require this exam should be well prepared to pass it.