A more common industry term for stockbroker is registered representative, because a stockbroker acts a sales representative for the broker-dealer firm that hires them, and because they are registered at both the state and federal level. Registered representatives who plan to work with clients in Idaho must become licensed through the Idaho Department of Finance, Securities Bureau.
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Stockbrokers are registered through the Financial Industry Regulatory Authority (FINRA) Central Registration Depository (CRD). Registered representatives are allowed to engage clients once this registration process is complete and accepted by the state of Idaho.
Step 1. Get Your Education
- Most broker-dealer firms expect candidates for employment to have a college degree. Some industry-specific degree options include:
- BA-Consumer and Family Financial Services
- BS-Business Administration- Finance
- Business ethics
- Business law
- Business communications
- Quantitative applications in business
- Behavior of organizations, persons and groups
- Accounting, in particular courses in financial accounting and managerial accounting
Step 2: Take the Required Exams to Become a Licensed Stockbroker in Idaho
- In order to take the required exams you must become sponsored by an Idaho-registered broker-dealer firm.
- Your broker-dealer will assist you in completing the Form U-4, Uniform Application for Securities Registration or Transfer exam application, and then file it through the Central Registration Depository (CRD).
- FINRA charges an $85 registration fee. Usually, broker-dealer firms pay any registration fees on behalf of their representatives.
- Idaho requires that registered representatives pass the Series 63 or 66 (explained below), plus one of the other general securities exams. Speak to your broker-dealer about which general exam they prefer.
- Test fees are required to participate in the exams, and in general, most firms favor the Series 7. The exam fees are $265 for the Series 7, $96 for the Series 63, and $128 for the Series 66.
- FINRA also requires that you provide a copy of your fingerprints, which may be provided by your broker-dealer, or else 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 Idaho is $50, which is paid by your broker-dealer to the Idaho Securities Bureau through the CRD.
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 lend insight into how your firm operates, as well as teach you the basics of securities sales and related eithics.
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 Idaho securities licenses must be renewed automatically each year. Idaho charges a $50 renewal fee, which is generally paid by your broker-dealer on your behalf. Renewal fees are submitted to the state of Idaho through the Web-CRD (Central Registration Depository).
- Continuing Education Requirements
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
This 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 training session every three years thereafter. Your broker-dealer will alert you as to when you are expected to complete the training.
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
Registered representatives are required to complete Firm Element training on an annual basis. Your broker-dealer will implement its own continuing education program that incorporates product information and industry trends that are most likely to affect your firm. The firm Element topics are decided by FINRA and generally include:
- 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
You are required to keep you broker-dealer aware of anything that could trigger a change to your Form U-4. Inform your firm’s compliance department so that FINRA will be alerted of any changes that include:
- Address updates
- Customer complaints
- Civil judgments against you
- Criminal disclosure
- Pending or completed disciplinary actions
- Financial judgments against you
Clients and regulators can review the information on your Form U-4 by using FINRA’s BrokerCheck.