Definition: Series 63 is a securities license that grants individuals the authorization to sell securities within a specific state jurisdiction. Administered by the North American Securities Administrators Association (NASAA), the Series 63 license, also known as the Uniform Securities Agent State Law Examination, is a requirement for professionals engaged in the sale of certain financial products and services.
Overview: The Series 63 exam is designed to test an individual’s knowledge and understanding of the state securities laws and regulations. It complements other securities licenses, such as the Series 7, which is required for individuals involved in the sale of securities at the national level. While the Series 7 mostly covers federal securities laws, the Series 63 focuses on regulations at the state level.
Purpose: The primary purpose of the Series 63 license is to ensure that financial professionals are well-versed in the specific regulations of the state(s) in which they operate. It aims to protect investors by ensuring that individuals engaging in the sale of securities within a state possess the necessary knowledge required to conduct their business ethically and in compliance with applicable regulations.
Eligibility: To be eligible to take the Series 63 exam, one must be sponsored by a financial firm or a self-regulatory organization (SRO) that is a member of FINRA (Financial Industry Regulatory Authority) or the MSRB (Municipal Securities Rulemaking Board). There are no educational prerequisites or experience requirements to take the exam. However, passing the Series 6 or Series 7 exams is often a prerequisite for individuals seeking to acquire the Series 63 license.
Exam Content: The Series 63 exam consists of 60 multiple-choice questions, and test-takers are granted 75 minutes to complete the exam. The questions cover a wide range of topics related to state securities regulations, including registration of securities, broker-dealer and agent regulations, antifraud provisions, securities exempt from registration, ethical practices, and disciplinary actions.
Passing Score: The passing score for the Series 63 exam is 72%, which means test-takers must correctly answer at least 43 out of the 60 questions. The exam is computer-based, and results are provided immediately upon completion. If an individual does not achieve a passing score, they are typically allowed to retake the exam after a waiting period determined by the applicable regulatory authority.
Career Opportunities: Obtaining the Series 63 license can open up various career opportunities within the financial services industry. Professionals holding this license often work as securities agents, investment adviser representatives, financial consultants, or in other roles involving the sale of securities at the state level. The license allows individuals to legally offer investment advice and conduct transactions involving financial products, such as mutual funds and variable annuities, to clients within the state jurisdiction.
Renewal and Continuing Education: The Series 63 license is typically valid for a period of two to three years, depending on the state. To maintain an active license, individuals must fulfill the renewal requirements set by their state’s regulatory authority. These requirements may include completing continuing education courses on topics related to securities laws and regulations.
Conclusion: The Series 63 license is an essential credential for professionals involved in the sale of securities within a specific state jurisdiction. It demonstrates a comprehensive understanding of state securities laws and regulations, ensuring the ethical conduct of financial professionals and the protection of investors. Obtaining this license broadens career prospects and enables individuals to legally engage in securities transactions and provide investment advice to clients within their state.