Stockbrokers serve as securities sales representatives for broker-dealer firms. Licensing responsibilities for securities sales professionals in Montana lie with the Montana Commissioner of Securities and Insurance, Securities Department. This detailed, step-by-step guide will explain the examination and registration process you’ll need to follow to become a stockbroker in Montana.
Step 1. Get Your Education
- A college education is not mandatory for stockbrokers, but it will likely be very helpful as you look to secure broker-dealer firm sponsorship for the required exams. Broker-dealer firms prefer a professional with a strong educational background.
Degrees commonly held by stockbrokers include:
- BS-Business Administration or Finance
- BA-Consumer and Family Financial Services
- Business communications
- Accounting, such as specialized courses in managerial and financial accounting
- Business law
- Business ethics
- Behavior of organizations, persons and groups
- Quantitative applications in business
Step 2: Take the Required Exams
- Contact broker-dealer firms in your community to request sponsorship for the Series 7 Exam. If a firm feels that you have the potential to excel as a stockbroker, they will sponsor your exam, and upon passing you may be offered a full time position.
- Complete the exam and registration application.
For registered reps of Non-FINRA member firms:
Submit Form U-10, the Uniform Examination request for non-FINRA Members through the Central Registration Depository (CRD). This serves as the exam application only. After passing the exam, you’ll need to register with the Montana Commissioner of Securities and Insurance, Securities Department by submitting a printed Form U-4 along with a $50 fee to:
Montana State Auditor’s Office
840 Helena Avenue
Helena, MT 59601
For registered reps of FINRA member firms:
All firm employees are required to have a basic understanding of the Form U-4 Uniform Application for Securities Registration or Transfer requirements. Your sponsor’s compliance department will assist you in fulfilling the initial Form U-4 requirements.
This department is also responsible for sending the form electronically through the Central Registration Depository (CRD).
Fingerprints are required for FINRA registration and can be obtained for a nominal fee at a local police station or sheriff’s office. Some firms may be able to take your fingerprints free of charge.
Your sponsoring broker-dealer firm will pay fees electronically when they file your completed U-4:
- Initial Montana $50 registration fee
- FINRA charges $30.25 to process the fingerprint card
- Test fees of $265 for the Series 7 and $96 for the Series 63 (explained below)
- FINRA registration fee of $85
When your application is approved, you may register for the required exams:
- Contact one of the Pearson or Prometric exam locations in Montana to schedule the necessary exams. You must have completed the proper registration requirements prior to attempting the scheduling process. Exams should be scheduled within 120 days after registration.
- Obtain the proper study materials from your sponsoring firm and allow yourself plenty of time to prepare for the exam.
- Your score will appear on the monitor when the exam is complete. When a passing score is recorded, you’ll be licensed as a securities sales professional in Montana.
Step 3: Get Your On-The-Job Training
Your on the job training will ensure proficiency and promote a positive working environment by training you on sales protocols and investment strategies that support the firm’s investment philosophy. Expect group training sessions if you’re part of a new hire group. Your training will likely give you an opportunity to sit in on sales calls as you job shadow experienced securities sales reps within the firm. Product knowledge training will expand on the material covered in the Series 7 Exam and help you to become more proficient in the following areas:
- Mutual funds
- Options on stocks
- Government securities
- Direct participation programs like non-publicly traded real estate investment trusts or oil and gas leases
- Open-end and closed-end investment company shares
- Corporate equity and debt securities
- Variable contracts
- Corporate, municipal and treasury bonds
Step 4: Ongoing Requirements for License Renewal and Continuing Education
The Montana Commissioner of Securities and Insurance, Securities Department requires that all securities licenses be renewed on an annual basis, no later than December 31st each year. Your renewal will typically take place on the yearly anniversary of your initial registration date. This involves an annual registration fee of $50 that will be distributed to the Montana Securities Department. Your firm will pay the annual registration fee from their Central Registration Depository general account.
Continuing Education Requirements
Continuing education requirements are structured by the Securities Industry Continuing Education Program. Continuing education is broken down into two Elements:
- The Regulatory Element
This training requirement must be satisfied at the beginning of your 3rd year. Subsequently, Regulatory Element training is required at least once every three years.
Modules are part of the S101 General Program and meet the Series 7 training requirements for registered stockbrokers:
- Controlling Customer Accounts/Settlement and Trade practices
- Communication with the public
- Client/Product Suitability
- The Firm Element
Companies will conduct a yearly internal evaluation, the results of which will determine the areas of focus for the annual Firm Element training. Though influenced by the results of the findings that come from internal evaluations, this training is always delivered in accordance with FINRA and NASAA requirements to cover the following areas:
- Investment features
- Associated risk factors
- Sales practices
- Suitability standards
- Regulatory requirements related to products, services, and strategies
Updating your Form U-4
Notify your firm’s compliance department within 30 days of the following:
- Financial judgments filed against you
- Customer complaints
- Civil judgments filed against you
- Criminal background disclosure
- Pending or completed disciplinary actions
- Address updates
FINRA’s BrokerCheck database serves as a valuable tool for checking the background of all stockbrokers in the nation. Be sure to keep your personal information on Form U-4 up-to-date so that potential clients have access to current information.