Stockbrokers, otherwise known as registered representatives, serve as sales agents for the broker-dealer firms that employ them. Those who intend to solicit clients in Arkansas must become registered with the Arkansas Securities Department and the Securities and Exchange Commission (SEC). This step-by-step guide will describe this process in detail.
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Step 1. Get Your Education
- The Arkansas Securities Department does not maintain specific educational requirements for registering, but most broker-dealers will only consider you as a job candidate if you hold a college degree.
Most stockbrokers hold MBAs or four year degrees in one of these areas:
- Business Administration
- Consumer and Family Financial Services
- Business communications
- Business law
- Business ethics
- Quantitative applications in business
- Behavior of organizations, persons and groups
- Accounting, in particular courses in financial accounting and managerial accounting
Step 2: Take the Series 7 Exam to Earn your Securities Representative License
- Submit registration. If sponsored by a FINRA-member firm, complete the Form U-4, Uniform Application for Securities Registration or Transfer with help from your broker-dealer’s compliance department. If sponsored by a non FINRA-member firm, complete Form U-10 Uniform Examination request for non-FINRA Members.
Your firm will then file your completed application form and pay all fees through the Central Registration Depository (CRD):
- FINRA requires an $85 initial registration fee, which should be covered by your employing broker-dealer firm
- Arkansas requires registered representatives to hold the Series 7 and the Series 63 licenses
- The Series 7 exam fee is $265 and the Series 63 is $96
- Provide fingerprints. Your broker-dealer may be able to facilitate fingerprinting, or you can visit your local police station or sheriff’s office. To process the fingerprint card, FINRA charges your broker-dealer $30.25.
- The registration fee in Arkansas is $75
- You are eligible to attempt the Series 7 General Securities Representative Examination once your broker-dealer has received approval of your registration.
- You must also pass the Series 63 Uniform Securities Agent State Law Examination in the state of Arkansas, which focuses on the specifics of state securities.
- Schedule the exam(s) through one of the Prometric or Pearson exam locations in Arkansas within 120 days of your registration being approved. You are not allowed to take multiple exams concurrently, so you must schedule the Series 7 and the Series 63 on different days.
- Prepare for your exams by utilizing resources that your sponsoring broker-dealer provides you. Arrive an hour before your scheduled time.
- You will be shown your score immediately after finishing each exam. Upon passing the Series 7 and Series 63 exams, you will be considered a registered representative in Arkansas.
Step 3: Get Your On-The-Job Training
Your broker-dealer will provide you with on-the-job training. You may job-shadow a co-worker in order to learn about the financial industry, your company, and the basics of securities sales. You will also be required to participate in orientation group training sessions.
In addition to learning about sales protocols, your on-the-job training will likely cover the following security products:
- Options on stocks
- Mutual funds
- Variable contracts
- Government securities
- Corporate equity and debt securities
- Corporate, municipal and treasury bonds
- Open-end and closed-end investment company shares
- Direct participation programs like non-publicly traded real estate investment trusts or oil and gas leases
Step 4: Ongoing Requirements for License Renewal and Continuing Education
- Annual License Renewal and Fees
Your securities license in Arkansas is automatically renewed annually. Arkansas charges a $75 renewal fee, which is generally paid by your broker-dealer on your behalf. Renewal fees are submitted to the Arkansas Securities Department through the Web-CRD (Central Registration Depository).
- Continuing Education Requirements
The Securities Industry Continuing Education Program requires that all registered representatives participate in mandatory continuing education elements. The continuing education requirements consist of two components:
- The Regulatory Element
At the beginning of your third year as a registered representative (within 120 days of your second annual registration), you are responsible for completing the Regulatory Element training program. Your broker-dealer will inform you of when your regulatory requirement is due. After completing the first Regulatory Element, you must complete one every three years during your career. Due to changing trends and compliance issues within the financial industry, the Regulatory Element is frequently updated.
Series 7 licensed registered representatives complete the S101 General Program as the Regulatory Element. The S101 addresses the issues of ethics, sales-practices, and regulatory and compliance standards. The S101 cover these four areas:
- Client/Product Suitability
- New and Secondary Offering & Corporate Finance
- Communicating with the Public
- Handling Customer Accounts/Trade and Settlement Practices
- The Firm Element
Each year your broker-dealer firm performs an internal evaluation, which will determine the relevant product and industry related topics it will focus its annual in-house training on. The Firm Element addresses the following areas:
- Investment features and associated risk factors
- Regulatory requirements related to products, services, and strategies
- Sales practices and suitability standards
- The Regulatory Element
- Updating your Form U-4
As a registered representative you are responsible for informing your firm’s compliance department promptly of any changes affecting your Form U-4. This includes:
- Address updates
- Changes to name or marital status
- Civil judgments against you
- Financial judgments against you
- Customer complaints
- Pending or completed disciplinary actions
- Criminal disclosure
Potential clients and industry regulators can view the status of your registration through FINRA’s BrokerCheck.