Stockbrokers sell securities as agents of broker-dealer firms, and are more commonly referred to in the finance industry as registered representatives or securities sales agents. This guide will provide you with specific instructions on how to become a stockbroker by taking the required exams and becoming registered with both the state of Delaware and the Securities and Exchange Commission (SEC).
Step 1. Get Your Education
Delaware does not maintain specific educational requirements for registered representatives, but most employers will only consider you as an applicant after earning a bachelor’s degree.
Registered representatives very often hold one of the following degrees:
- BA-Consumer and Family Financial Services
- BS-Business Administration- Finance
If you choose to pursue a degree in a business-related field, aim to take courses that will introduce the topics that are essential to their function within the financial industry:
- Business law
- Business communications
- Behavior of organizations, persons and groups
- Accounting, in particular courses in financial accounting and managerial accounting
- Business ethics
- Quantitative applications in business
Step 2: Take the Series 7 Exam to Earn your Securities Representative License
- Obtain sponsorship through a registered broker-dealer in Delaware. Sponsorship is required in order to take the Series 7 General Securities Representative Exam.
- Fill out the registration application. If your sponsor is a FINRA-member firm the U-4, Uniform Application for Securities Registration or Transfer will be used. Registration with the SEC and the Delaware Securities Division is processed upon approval of the exam application. This comprehensive registration application requires you to disclose information on your educational, as well as your residential and criminal history.
- Your sponsoring firm will most likely cover the $85 registration fee required by FINRA.
- Fees associated with required exams are $245 for the Series 7 and $147 for the Series 63.
- You will be required to provide your fingerprints, either through your broker-dealer free of charge, or for a small fee at a local police station or sheriff’s office. FINRA charges $30.25 for processing your fingerprint card.
- The Delaware Securities Division requires an initial registration fee of $65. Generally, your employing firm will pay this fee for you.
- Your sponsoring broker-dealer will help you with complete the required form and submit it electronically through the Central Registration Depository (CRD).
- You are allowed to register for the Series 7, General Securities Representative Examination once your broker-dealer has received approval of your registration registration.
- Delaware also requires that you pass the Series 63, Uniform Securities Agent State Law Examination, which focuses on the specifics of state securities.
- Within 120 days of your registration becoming active, go online to schedule the exams though a test location most convenient to you.
- Prepare thoroughly for the exams. Your broker-dealer may offer their own courses or sponsor classes through an independent firm. Arrive at least an hour before your scheduled exam.
- You will be notified of your score immediately upon completing the exam. After you achieve passing scores on both the Series 7 and Series 63 exams, you will be licensed as a registered representative in Delaware.
Step 3: Get Your On-The-Job Training
You will receive on-the-job training through your broker-dealer as you begin your career. You may job shadow a fellow employee or participate in group sessions. This will give you insight into how your firm operates, its investment philosophy, as well as teach you the basics of securities sales.
Your on-the-job training will likely cover the following security products:
- Options on stocks
- Variable contracts
- Mutual funds
- Government securities
- Corporate, municipal and treasury bonds
- Corporate equity and debt 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
Step 4: Ongoing Requirements for License Renewal and Continuing Education
- Annual License Renewal and Fees
Your securities license in Delaware is automatically renewed annually. Delaware charges a $65 renewal fee, which is generally paid by your broker-dealer on your behalf. Renewal fees are submitted to the Delaware Securities Division through the Web-CRD (Central Registration Depository).
- Annual License Renewal and Fees
- Continuing Education Requirements
The Securities Industry Continuing Education Program was put in place to be sure all registered representatives are current on regulatory issues. There are two elements that make up the continuing education program:
- The Regulatory Element
The Regulatory Element must be completed within 120 days of your second annual registration (in the beginning of your third year). You will need to complete a Regulatory Element every three years thereafter. You will be alerted by your broker-dealer as to when you are responsible to complete the training. Series 7 licensed registered representatives participate in the S101 General Program. The S101 is part of the Regulatory Element, which covers:
- New and Secondary Offering & Corporate Finance
- Communicating with the Public
- Client/Product Suitability
- Handling Customer Accounts/Trade and Settlement Practices
- The Firm Element
You are required to complete Firm Element training each year. Your broker-dealer implements its own Firm Element program based on requirements handed down from FINRA. Each year, FINRA assesses the most relevant topics within the following general areas:
- Regulatory requirements related to products, services, and strategies
- Investment features and associated risk factors
- 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:
- Criminal disclosure
- Address updates
- Customer complaints
- Pending or completed disciplinary actions
- Financial judgments against you
- Civil judgments against you
- Changes to name or marital status
FINRA’s BrokerCheck allows potential clients and regulatory professionals to publicly view your registration information.