About the Securities Industry Essentials Exam
What are the topics covered on the SIE Exam?
The SIE exam, which is an introductory level exam, consisting of 75 questions and is broken down into four parts. These topics include:
- Knowledge of Capital Markets
- Understanding Products and Their Risks
- Understanding Trading, Customer Accounts, and Prohibited Activities
- Overview of Regulatory Framework
See below for more detailed breakdown or visit FINRA.
Regulatory Entities, Agencies and Market Participants
- The Securities and Exchange Commission (SEC)
- Self-regulatory Organizations (SROs)
- Other Regulators and Agencies
- Market Participants and their Roles
- Types of Markets
- Economic Factors
- The Federal Reserve Board's Impact on Business Activity and Market Stability
- Business Economic Factors
- International Economic Factors
- Offerings
Understanding Products and Their Risks
- Equity Securities
- Debt Instruments
- Options
- Packaged Products
- Municipal Fund Securities
- Direct Participation Programs (DPPs)
- Real Estate Investment Trusts (REITs)
- Hedge Funds
- Exchange-traded Products (ETPs)
- Definition and Identification of Risks
- Strategies for Mitigating Risk
Understanding Trading, Customer Accounts and Prohibited Activities
- Trading, Settlement and Corporate Actions
- Orders and Strategies
- Investment Returns
- Trade Settlement
- Corporate Actions
- Account Types and Characteristics
- Customer Account Registrations
- Anti-money Laundering (AML)
- Books and Records and Privacy Requirements
- Communications with the Public and General Suitability Requirements
- Market Munipulation
- Insider Trading
- Other Prohibited Activities
- Financial Exploitation of Seniors
- Activities of Unregistered Persons
- Falsifying or Withholding Documents
- Prohibited Activities related to maintenance of books and records (e.g. falsifying records and improper maintenance/retention of records)
Overview of Regulatory Framework
- Registration and Continuing Education
- Employee Conduct
- Reportable Events
About the Series 6 Rep Level Exam
What are the topics covered on the Series 6 Rep Level exam?
The Series 6 Rep Level exam is broken down into four parts (by job function). These topics include:
- Regulatory fundamentals and business development
- Ability to evaluate customers' financial information, identify investment objectives, provide information and make suitable recommendations
- Ability to open, maintain, transfer and close accounts, and retain appropriate records
- Ability to obtain, verify and confirm customer purchase and sale instructions
See below for more detailed breakdown or visit FINRA.
Regulatory fundamentals and business development
- General industry regulations, including SEC, SRO, and state requirements
- Registration, qualification, continuing education, and termination of employment of associated
persons
- Permitted activities for registered and non-registered associated persons
- Required approvals and content standards of public communications: retail communications,
institutional communications, correspondence, research reports, telephone solicitations
- Definition of regulated investment company by the Internal Revenue Code
- “Conduit” or “pipeline” theory, required distribution of income and realized capital gains
- “Do-not-call” lists and other telemarketing requirements
- Content and delivery of prospectuses, Statement of Additional Information
(SAI), and other offering documents
- Networking arrangements
- Regulations related to marketing/prospecting
- Initial privacy disclosures to customers (e.g., definitions, privacy and opt-out
notices, disclosurelimitations, exceptions)
- Definitions of retail communications, institutional communications and
correspondence, including categorization of public appearances, seminars and
related sales literature and advertising
- Regulations regarding communications with the public
- Producers and General Rules of Agency
- Standards and approval of communications
Evaluate customers’ financial information, identify investment objectives, provide information on investment products, and make suitable recommendations
- Essential facts regarding customers and customer relationships
- Financial and personal profile of a customer (e.g., age, other investments, financial situation and
needs, tax status, investment objectives, investment experience, investment time horizon, liquidity
needs, risk tolerance)
- Reasonable-basis suitability, customer-specific suitability and quantitative suitability
- Reasonable-basis suitability, customer-specific suitability and quantitative suitability
- Investment strategies and recommendations to hold
- Investment profiles and strategies
- Types of investment returns (e.g., dividends, capital gains, return of capital)
- Securities markets (e.g. exchange markets, over-the-counter (OTC)/negotiated market, new issue market (e.g., primary offering, role of investment banker))
- Fair dealings with customers and appropriate business conduct (e.g., application, definition, sales charges, withhold orders, refund of sales charges, dealer concessions, member compensation, execution of portfolio transactions, breakpoint sales)
- FINRA's cash and non-cash compensation regulations (e.g., gifts and business entertainment limits)
- Insider trading and prohibited activities (e.g., churning, front running, switching, commingling, unauthorized trading, guarantees against losses, selling away)
- Capitalization, pricing, secondary market trading, and redeemability
- Types of underlying securities
- Other investment types, including but not limited to: Exchange Traded Funds (ETFs) and hedge funds
- Variable annuities, deferred variable annuities and variable life (fees and charges, premiums, riders, investment options, death benefits and payout options)
- Tax considerations
- Definitions, characteristics, and concepts of products, types of accounts, and plans
- Price and yield terms (e.g., bid, ask, NAV, premium, par)
- Tax treatment, contributions, accumulation, withdrawals, account ownership, beneficiaries,
benefits, required minimum distributions (RMD), and rollovers and transfers
- Retirement and tax advantaged plans
- Open-end investment company
- Mutual fund
- Variable annuity and variable life insurance
- Unit Investment Trust (UIT)
- Closed-end fund
- Investment risk factors (e.g., call, capital, credit, currency, inflationary, interest rate, liquidity,
market (systematic, non-systematic), social and political, pre-payment, reinvestment, timing)
- Concept of risk/reward and the effects of diversification
- Types of investment strategies
- Sources of market and investment information (e.g., news outlets, internet, rating agencies,
research reports) and economic factors (e.g., inflation, deflation, monetary policy, economic policy)
- The role of the Federal Reserve Board
- Changing interest rates and the effect on money supply, fiscal policy, federal taxation and spending
- International economic factors (e.g., currency exchange rates, balance of trade, gross domestic
product (GDP))
Open, maintain, close, and transfer accounts and retain appropriate account records
- Account registration types (e.g., individual, JTWROS, UGMA)
- Distribution elections (e.g., cash, reinvestment)
- Customer screening (e.g., Customer Identification Program (CIP), determining whether a customer
is an associated person of another broker-dealer)
- Account authorizations and legal documents (e.g., power of attorney, authorized account user,
discretionary accounts, Transfer on Death (TOD), beneficiary forms)
- Recordkeeping (e.g., retention of customer and firm-related records)
- Customer account record maintenance (e.g., update personal information, holding of customer
mail, sending required SEC Rule 17a-3 notifications)
- Transferring customer accounts between broker-dealers (e.g., Automated Customer Account
Transfer Service (ACATS))
- Account registration changes and internal transfers (e.g., TOD, divorce)
- Delivery of annual reports and notices of corporate actions (e.g., proxy statements)
- Anti-Money Laundering (AML) compliance procedures, program, and reporting (e.g., Bank Secrecy
Act (BSA), Office of Foreign Asset Control (OFAC) Specially Designated Nationals (SDN) list,
Currency Transactions Reports (CTRs), Customer Identification Program (CIP), Suspicious Activity
Reports (SARs))
- Circumstances for notifying FinCEN or refusing or restricting activity in an account and/or closing
accounts
Obtain, verify, and confirm customer purchase and sale instructions
- Cash accounts (e.g., prompt payment for securities purchased, extension of time, frozen accounts)
- Market terms (e.g., trade date, settlement date, ex-dividend date)
- Trade execution activities (e.g., market timing, late trading, prompt payment for securities
purchased, extension of time, frozen accounts, prohibition on arranging loans for others)
- Information required on an order ticket
- Sharing of referral fees and commissions
- Confirmations and account statements
- Customer complaint procedures
- Arbitration procedures
- Investigations and sanctions
