Stockbrokers, otherwise known as registered representatives, serve as securities sales agents for the broker-dealer firms that employ them. Stockbrokers who intend on soliciting clients in Connecticut are required to become licensed by the Connecticut Department of Banking, Securities and Business Investments Division.
To become licensed, you must first secure sponsorship with a broker-dealer firm licensed to sell securities in Connecticut. Your firm’s compliance department will assist you in registering with the Financial Industry Regulatory Authority (FINRA). Once your FINRA registration is accepted and you have passed the necessary exams, you will be legally allowed sell securities to clients in Connecticut.
Step 1. Get Your Education
Many broker-dealer firms will require a four-year degree as a requirement for employment. Most often, stockbrokers will pursue degrees in the following areas:
- Business Administration
- Consumer and Family Financial Services
Focus on taking business and finance courses first to build a foundation, as well as sales and marketing courses to sharpen sales skills. Registered representatives can benefit from the following courses:
- Financial accounting and managerial accounting
- Business law
- Business ethics
- Business communications
- Quantitative applications in business
- Behavior of organizations, persons and groups
Step 2: Take the Required Exams
- A broker-dealer registered in Connecticut must sponsor you before you can take the required securities exams. Apply for open stock broker positions or proactively contact a firm of interest.
- Complete the Form U-4, Uniform Application for Securities Registration or Transfer. Your broker-dealer’s compliance department can assist you with completing the application. When complete, your firm will submit your Form U-4 through the Financial Industry Regulatory Authority’s (FINRA’s) Central Registration Depository (CRD).
- Form U-4 discloses your criminal background history among other information
- FINRA charges an $85 registration fee
- Test fees, which are generally paid by your firm, are $40 for the Series 6, $245 for the Series 7, and $147 for the Series 63
- You must also submit a fingerprint card. FINRA charges $30.25 to process the fingerprint card.
- Connecticut charges a fee of $125 to register as a registered representative
- The Series 6, Investment Company Products/Variable Contracts Limited Representative Qualifications Examination, or the Series 7, General Securities Representative Examination is required. Speak to your broker-dealer to find out which test they prefer based on the products you’ll be working with.
- The Series 63, Uniform Securities Agent State Law Examination is required in Connecticut.
- You will have 120 days after your registration becomes active to schedule the exams through a Prometric or Pearson testing facility. There are five Pearson and Prometric testing centers throughout Connecticut.
- Prepare for the securities exams. Your broker-dealer should provide you with resources to help you study. Arrive at the test center an hour before your exam is scheduled.
- You will receive your score immediately after you complete the exam. You will become a licensed stockbroker in Connecticut if you achieve a passing score on both exams.
Step 3: Get Your On-The-Job Training
Your broker-dealer will provide you with on-the-job training. In order to learn about the financial industry, you may job-shadow a co-worker or participate in group training. On-the-job training will teach you about your company’s investment philosophy and give you a foundation of securities product knowledge and sales skills.
Your on-the-job training will likely cover the following security products:
- Variable contracts
- Mutual funds
- Corporate, municipal and treasury bonds
- Corporate equity and debt securities
- Government securities
- Open-end and closed-end investment company shares
- Direct participation programs like non-publicly traded real estate investment trusts or oil and gas leases
- Options on stocks
Step 4: Ongoing Requirements for License Renewal and Continuing Education
- Annual License Renewal and Fees
Your securities license in Connecticut needs to be renewed by December 31st each year. There is a $125 fee in Connecticut to renew your securities licenses, which is generally paid for by your firm.
- Continuing Education Requirements
The Securities Industry Continuing Education Program requires that all registered representatives participate in mandatory continuing education elements. The continuing education requirements are consist of two components:
- The Regulatory Element
You are responsible for completing the Regulatory Element training program beginning in your third year as a registered representative (within 120 days of your second annual registration). Your broker-dealer will inform you of when your Regulatory Requirement is due. The Regulatory Element is frequently updated due to changing trends and compliance issues within the financial industry and must be completed once every three years during your career.If you have the Series 7 license, you are required to complete the S101 General Program as the Regulatory Element. The S101 addresses a broad area of material, including ethical, regulatory, compliance, and sales-practice standards. S101 is made up of four modules:
- Handling Customer Accounts/Trade and Settlement Practices
- New and Secondary Offering & Corporate Finance
- Communicating with the Public
- Client/Product Suitability
- The Firm Element
Each year your broker-dealer firm completes an annual internal evaluation, which will determine the relevant product and industry related training it will focus on. The Firm Element training is annual. 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
Changes that may affect your Form U-4 must be disclosed to your broker-dealer’s compliance department. Your registration information will be updated and FINRA will be alerted of the changes. Changes that apply include:
- Address updates
- Criminal disclosure
- Civil judgments against you
- Changes to name or marital status
- Customer complaints
- Financial judgments against you
- Pending or completed disciplinary actions
The status of your registration is available to the public through FINRA’s BrokerCheck.