A stockbroker, otherwise known as a registered representative, operates in a securities sales representative under the employ of a broker-dealer firm. Registered representatives who who solicit clients in New Jersey are licensed by the New Jersey Division of Public Affairs, Bureau of Securities.
To become a licensed registered representative in New Jersey you must register through the Financial Industry Regulatory Authority (FINRA)’s Central Registration Depository (CRD). When this registration is complete, you will be allowed to buy and sell securities on behalf of New Jersey residents.
Step 1. Get Your Education
- While New Jersey does not have established educational requirements for registered representatives, most broker-dealer firms will require a college degree as a requirement for employment.
A bachelor’s degree is also commonly required for registered representatives who choose to pursue professional designations. Stockbrokers can benefit from majors that 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 New Jersey
- In order to take the required exams you must become sponsored by a New Jersey-registered broker-dealer firm. To find a sponsor, apply for open positions you find online or reach out to a firm that interests you.
- Fill out the Form U-4, Uniform Application for Securities Registration or Transfer application. Your sponsoring broker-dealer will then submit it electronically through the Central Registration Depository (CRD).
- Your sponsoring firm will most likely cover the $85 registration fee required by FINRA.
- You must also submit a fingerprint card. If your broker-dealer cannot take your 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.
- The New Jersey Bureau of Securities charges a fee of $60 to register as a registered representative. Your broker-dealer will submit registration fees to the state through the Central Registration Depository (CRD).
- Once your broker-dealer firm has filed and received approval of your completed Form U-4 through the CRD, you may register for the Series 7, General Securities Representative Examination or another general securities exam as directed by your firm.
- You will have 120 days after your registration becoming active to schedule the exam. Prometric or Pearson will proctor and facilitate the securities exams. Schedule with the New Jersey test location nearest you.
- There are five Pearson and Prometric testing centers in New Jersey.
- You cannot schedule more than one securities exam in a day. Plan ahead so you can schedule the required exams within the required time period.
- The exam fee for the Series 7 is $265
- Make sure you are prepared for the securities exam. Many broker-dealer firms will offer in-house test preparation, or you could register for classes through a third-party vendor. Arrive at the test center an hour before your exam is schedule, as you will be required to check-in with the test facilitator.
- You score appears immediately after you complete the exam. You will become a licensed stockbroker in the state of New Jersey once you achieve a passing score.
Step 3: Get Your On-The-Job Training
Your first few weeks as a registered representative will most likely be spent attending in-house training sessions to teach you the basics of securities sales. Job-shadowing a colleague may be incorporated into your on-the-job sales and product knowledge training.
The training you receive while working will allow you to effectively engage clients and match their needs with suitable securities. The financial products detailed in training will likely include some or all of the following:
- 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 New Jersey securities license is automatically renewed annually. New Jersey charges a $60 renewal fee, which is generally paid by your broker-dealer on your behalf. Renewal fees are submitted to the New Jersey Securities Bureau through the Web-CRD (Central Registration Depository).
- Continuing Education Requirements
The Securities Industry Continuing Education Program outlines that registered representatives must complete 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 reaction to changing trends and compliance issues, the Regulatory Element is frequently updated.
Series 7 licensed registered representatives must complete the S101 General Program as the Regulatory Element requirement. The S101 generally addresses the following areas:
- Handling Customer Accounts/Trade and Settlement Practices
- Communicating with the Public
- Client/Product Suitability
- New and Secondary Offering & Corporate Finance
- The Firm Element
Each year your broker-dealer firm will perform an annual internal evaluation, which will determine the relevant product and industry related training it will focus on. You must complete the Firm Element training annually. The Firm Element addresses the following areas:
- Investment features and associated risk factors
- Regulatory requirements related to products, services, and strategies
- Sales practices and suitability standards
- The Regulatory Element
- Updating your Form U-4
You are required to inform your broker-dealer compliance administrator of changes that may affect your Form U-4 These include:
- Address updates
- Changes to name or marital status
- Customer complaints
- Pending or completed disciplinary actions
- Criminal disclosure
- Civil judgments against you
- Financial judgments against you
Clients and regulators can review the information on your Form U-4 by using FINRA’s BrokerCheck.