Stockbrokers are also known as securities sales agents or registered representatives because they operate in a sales capacity for the broker-dealer firms for which they work. Registered representatives who solicit clients in New Mexico need to become licensed by the New Mexico Regulation & Licensing Department, Securities Division.
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To become licensed, you must find sponsorship from a broker-dealer firm. 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 in New Mexico.
Step 1. Get Your Education
- Most broker-dealer firms will require that candidates for employment have a college degree. In addition, a bachelor’s degree is often required if you wish to pursue professional designations during your career.
Degrees that are most likely to benefit stockbrokers are:
- BS-Business Administration- Finance
- BA-Consumer and Family Financial Services
- Business ethics
- Business law
- Business communications
- Quantitative applications in business
- Behavior of organizations, persons and groups
- Financial accounting and managerial accounting
Step 2: Take the Required Exams
- A broker-dealer registered in New Mexico must sponsor you before will be allowed to complete the required securities exams. Apply for open registered representative positions by researching open jobs or by contacting a firm directly.
- Fill out the applications for the required tests. This is done by completing the Form U-4, Uniform Application for Securities Registration or Transfer. Your sponsoring broker-dealer will help you complete and submit the form through FINRA’s Central Registration Depository (CRD).
- The Form U-4 application includes personal and broker-dealer specific information, including your past residences and criminal history
- FINRA maintains a registration fee of $85. Your broker-dealer will most likely pay this fee on your behalf.
- New Mexico requires that registered representatives pass either the Series 63 or Series 66 (explained below). Before taking either the S63 or S66, you will need to pass a general securities test like the Series 7, so speak to your broker-dealer regarding which test is best for you to take. The test fees that are required to participate in the exams 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. Your broker-dealer may have the capacity to fingerprint you. If not, visit your local police station or sheriff’s office. To process the fingerprint card, FINRA charges your broker-dealer $30.25.
- Registration fees will be paid to FINRA when your Form U-4 is submitted.
- The registration fee in New Mexico is $50, which is paid to the New Mexico Securities Division through the CRD by your broker-dealer.
- There are several Pearson and Prometric testing centers throughout New Mexico.
- 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.
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.
The on-the-job training that you receive should prepare you to solicit clients and instruct you as how to give prudent advice for a number of different financial vehicles. The securities instruments you’ll likely learn about include:
- Variable contracts
- Options on stocks
- Corporate equity and debt securities
- Mutual funds
- Government securities
- Corporate, municipal and treasury bonds
- Direct participation programs like non-publicly traded real estate investment trusts or oil and gas leases
- Open-end and closed-end investment company shares
Step 4: Ongoing Requirements for License Renewal and Continuing Education
- Annual License Renewal and Fees
Your New Mexico securities license is automatically renewed annually. New Mexico charges a $50 renewal fee, which is generally paid by your broker-dealer on your behalf. Renewal fees are submitted to the New Mexico Securities Division through the Web-CRD (Central Registration Depository).
- Continuing Education Requirements
The 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. You will need to complete a Regulatory Element every three years thereafter.
If you have the Series 7 license, you are required to complete the S101 General Program as the Regulatory Element. The content in this program is frequently updated to reflect industry changes. 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
You are required to complete Firm Element training each year. Your broker-dealer implements its own Firm Element program based on requirements from FINRA and the current topics your broker-dealer deems appropriate. Each year, FINRA assesses the relevant topics which usually address the following:
- Investment features and associated risk factors
- Sales practices and suitability standards
- Regulatory requirements related to products, services, and strategies
- The Regulatory Element
- Updating your Form U-4
Changes that occur affecting your Form U-4 must be disclosed to your broker-dealer’s compliance department. Your registration information will be updated and FINRA will be alerted of the changes. Changes that apply include:
- Address updates
- Criminal disclosure
- Civil judgments against you
- Changes to name or marital status
- Customer complaints
- Financial judgments against you
- Pending or completed disciplinary actions
Clients and regulators can review the information on your Form U-4 by using FINRA’s BrokerCheck.