Stockbrokers are also known as broker-dealer agents or registered representatives. In order to become a stockbroker in Indiana, you must be registered with the Indiana Securities Bureau, the Securities and Exchange Commission (SEC), and at least one self-regulatory organization (SRO) recognized by the SEC.
Follow this step-by-step guide for a full explanation of the examination, sponsorship, and registration requirements for becoming a stockbroker in Indiana.
Step 1. Get Your Education
- Acquire a four-year college degree. Although not a requirement for registration, the U.S. Bureau of Labor Statistics reports that most registered representatives possess a bachelor’s degree, and most brokerage firms will only consider you as a candidate for sponsorship if you have a relevant educational background.
Some of the degrees most sought after by stockbrokers include:
- BA-Financial Services
- BS-Business Administration
- BS- Economics/Accounting/Finance
- Advance mathematics
- Statistics and decision modeling
- Economics and financial markets
- Financial planning
- Corporate accounting and finance
- Strategy management
Step 2: Take the Series 7 Exam to Earn your Securities Representative License
- Submit the appropriate application. If your sponsoring firm is a member of FINRA, complete the Uniform Application for Securities Registration or Transfer, also called form U-4. If your sponsoring firm is a member of an SRO other than FINRA, you’ll complete Form U-10 Uniform Examination request for non-FINRA Members.
Your sponsoring firm will then submit the application through the Central Registration Depository (CRD) along with Indiana registration fee of $25, all applicable SRO registration fees ($85 for FINRA), Series 7 Exam fee of $265 (Series 63 and Series 66 exam fees are $96 and $128 respectively), and a fingerprint card for the compulsory FBI background check.
- Upon approval of your application, you are registered to take the required exams.
Your broker-dealer firm will likely require you to take the General Securities Representative Examination, commonly known as the Series 7, which qualifies you as a general securities broker-dealer agent. More limited licenses include the Series 6 for mutual funds and variable contracts, Series 62 for corporate securities, and Series 22 for direct participation programs.
The Indiana Securities Bureau will also require you to take either the Series 63 (Uniform Securities Agent State Law Examination) or Series 66 (Uniform Combined State Law Examination) and obtain a passing score (72% or 75% respectively).
- You have 120 days after registration to take the exam.
- The Series 63/66 exam needs to be scheduled on a different day than the Series 7/6/22/62.
Schedule the exams at a Prometric or Pearson exam facilitator site of your choosing.
- Prepare for the exams. Your sponsoring firm will help you with exam preparation by guiding you to the right resources. Arrive an hour before your scheduled exam time.
- You are shown the results for these exams immediately after finishing.
You become a licensed broker dealer agent in Indiana (general or restricted) after passing the right combination of exams as outlined above.
Step 3: Get Your On-The-Job Training
Your employing broker-dealer firm will provide training either in-house or through a third party training facilitator. Expect to job shadow a senior registered rep and listen in on their sales calls to learn about the best approaches to recommending investments and how best to aligning clients with suitable securities. As a BD agent, the products that you deal with will likely include:
- Stocks and stock options
- Treasury and corporate bonds
- Government and corporate securities
- Variable contracts
- Mutual funds
- Open-end and closed-end investment company shares
Step 4: Ongoing Requirements for License Renewal and Continuing Education
- Annual License Renewal and Fees
Your employer will renew your broker-dealer agent license through the CRD system. The Indiana Securities Division charges a renewal fee of $25.
- Continuing Education Requirements
All broker-dealer agents need to comply with the two-part Securities Industry Continuing Education Program:
- The Regulatory Element
After your second license renewal, you will attend a prescribed computer based Regulatory Element training session. After initial Regulatory Element training, you’ll be required to take it again once every 3 years. FINRA and other self-regulatory authorities developed this element in conjunction with the Continuing Education Council.
- The Firm Element
In addition to the regulatory element, firms also develop their own in-house continuing education programs referred to as the Firm Element, based on FINRA’s Firm Element Advisory. This element covers product knowledge, services, and sales practices in the context of current and emerging regulations.
- The Regulatory Element
- Updating your Form U-4
You are required to update the information on your U-4 within 30 days of it changing. You are required to notify the compliance supervisor or manager at your firm within 30 days of changes to, or the occurrence of, the following:
- New physical address
- Unfavorable financial, criminal or civil judgments disclosure
- Customer complaints or disciplinary actions against you (pending or otherwise)
Due to the sensitive nature of working in securities sales, FINRA maintains an online BrokerCheck system that displays relevant information from your Form U-4 This can be accessed by regulators, as well as your current and potential clients.