A stockbroker, otherwise known as a registered representative, functions as a securities sales agent for the broker-dealer firm that they work for. Registered representatives who intend on soliciting clients in Hawaii must become licensed by the Hawaii Department of Commerce & Consumer Affairs, Securities Compliance Branch.
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To become licensed in Hawaii, you must find sponsorship from a broker-dealer firm licensed to operate within the state. Your firm’s compliance department will assist you in registering with the Financial Industry Regulatory Authority (FINRA). Once your FINRA registration is accepted, you will be allowed to participate in the purchase and sale of securities on the behalf of Hawaii’s residents.
Step 1. Get Your Education
- Broker-dealer firms seek candidates for employment who have earned a college degree. In addition, a bachelor’s degree is often required if you wish to pursue professional designations during your career.
Degrees beneficial to stockbrokers are:
- BA-Consumer and Family Financial Services
- BS-Business Administration- Finance
- Business law
- Business communications
- Behavior of organizations, persons and groups
- Financial and managerial accounting
- Business ethics
- Quantitative applications in business
Step 2: Take the Required Exams
- Before you can apply for and take the required securities exams, you must seek sponsorship from a broker-dealer registered in Hawaii. Becoming employed by a sponsoring firm requires researching open positions, so get in contact with your personal and professional network or look on local job boards for registered representative openings.
- Seek assistance from your broker-dealer’s compliance department when completing the Form U-4, Uniform Application for Securities Registration or Transfer. Once complete, your broker-dealer firm will file the Form U-4 through the Financial Industry Regulatory Authority (FINRA) Central Registration Depository (CRD).
- The application covers your personal information criminal background history
- FINRA charges an $85 registration fee. Sponsoring firms pay registration fees on behalf of their representatives
- Exam fees are $265 for the Series 7 and $96 for the Series 63
- You must also submit a fingerprint card. If your broker-dealer cannot administer fingerprints, a local police station or sheriff’s office can assist you for a nominal fee. FINRA charges of $30.25 as a fingerprint card-processing fee
- Hawaii charges a fee of $50 to register registered representatives
- There are three testing centers in Honolulu
- You are not allowed to take multiple exams in the same day. Be sure to schedule the Series 7 and the Series 63 within the required time period.
Step 3: Get Your On-The-Job Training
You will receive on-the-job training through your broker-dealer as you begin your career. This may involve job shadowing a fellow employee or participating in group sessions in order to learn the basics of securities sales.
The training you receive while working will allow you to effectively engage clients and match their needs with suitable securities. The financial products you will most likely cover in training include:
- Variable contracts
- Options on stocks
- Mutual funds
- Corporate, municipal and treasury bonds
- Government securities
- 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 Hawaii is automatically renewed each year. The renewal fee of $50 will be paid by your broker-dealer to the state of Hawaii through the Web-CRD.
- Continuing Education Requirements
The Securities Industry Continuing Education Program outlines continuing education requirements. The Continuing Education Program consists of the Regulatory Element and the Firm Element.
- The Regulatory Element
You must complete the Regulatory Element training program in your third year in business, specifically within 120 days of your second annual registration. You are required to complete a Regulatory Element Every third year following that. In accordance with changing trends and compliance issues, the Regulatory Element is frequently updated.
The S101 General Program is the Regulatory Element that applies to registered representatives holding the Series 7 license. This Regulatory Element covers a significant amount of material including compliance, regulatory, ethical, and sales-practice standards. The four modules that make up the S101 are:
- Client/Product Suitability
- Handling Customer Accounts/Trade and Settlement Practices
- Communicating with the Public
- New and Secondary Offering & Corporate Finance
- The Firm Element
Each year your broker-dealer firm will complete an internal evaluation based on FINRA-identified criteria. You are required to complete Firm Element training once a year. It covers relevant product and industry related training as it relates to your broker-dealer. Firm Element training will likely touch upon the following issues:
- Regulatory requirements related to products, services, and strategies
- Sales practices and suitability standards
- Investment features and associated risk factors
- 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 view this information.