Stockbrokers, more commonly referred to within the industry as registered representatives or securities sales persons, operate as sales representatives for the broker-dealer firms that employ them. The New York Office of the Attorney General Investor Protection Bureau licenses stockbrokers who actively engage clients within the state.
Here you’ll find detailed step-by-step instructions on how to become a stockbroker in New York by securing the necessary license and becoming registered with a self-regulatory authority recognized by the Securities and Exchange Commission (SEC). This guide details the process for registered reps of both Financial Industry Regulatory Authority (FINRA)-member and Non-FINRA member broker-dealer firms.
Step 1. Get Your Education
While the New York Investor Protection Bureau has not set specific education requirements for registered representatives, many broker-dealer firms will only consider applicants who hold a four-year degree. Elective professional designations you may choose to pursue during your career will usually require a bachelor’s degree as well.
Registered representatives commonly hold one of the following degrees:
- BA-Consumer and Family Financial Services
- BS-Business Administration- Finance
While getting your degree, it is important to focus on taking the right courses. Your coursework will prepare you in understanding how the securities and investment markets function. Concentrate your efforts on sales and finance courses toward the end of tenure. Helpful courses for aspiring stockbrokers:
- Business law
- Accounting, in particular courses in financial accounting and managerial accounting
- Behavior of organizations, persons and groups
- Business ethics
- Business communications
- Quantitative applications in business
Step 2: Take the Required Exams
- You do not need to be sponsored by a broker-dealer in order to be able to take the required exam for licensure in New York (Series 63 or 66). In order to take the Series 7, which, is required by all FINRA member broker-dealer firms, you’ll need to have a broker-dealer firm sponsor you. Research open positions for registered representatives and apply, or contact a firm that you feel would be a good fit.
- Register to take the required exams.
For registered reps of Non-FINRA member firms:
- Complete either Form M-2 or hardcopy Form U-4 for a new registered representative ($150 fee each year for first four years)
- Send form M-2 and fees paid by attorney’s check, certified check, bank check, or money order to New York Office of the Attorney General:Registration Section, New York State Department of Law
120 Broadway, 23rd Floor
New York, New York 10271
- Contact FINRA at (212) 858-4000 for exam application
For registered reps of FINRA member firms:
Fill out the test application form. Your sponsoring firm can assist you with completing the Form U-4, Uniform Application for Securities Registration or Transfer. Your broker-dealer will file your complete Form U-4 through the Central Registration Depository (CRD).
- The application consists of a questionnaire detailing your personal information, education, work experience, and any criminal history
- A registration fee of $85 payable to FINRA is required. This fee is generally paid for by the firm employing you.
- Test fees of $245 for the Series 7 and $147 for the Series 63 (explained below) will be additional. New York requires registered representatives are required to take the Series 63 or the Series 66. The Series 7 is not required by the state, but is required by FINRA and therefore will be required by all FINRA member broker-dealer firms.
- Fingerprints are also required for FINRA registrations 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. FINRA charges $30.25 to process the fingerprint card.
- Your sponsoring broker-dealer firm will pay the fees electronically when they file your completed U-4.
- The initial registration fee in New York is $70, which will be paid by your sponsoring broker-dealer through the CRD.
- Your registration for taking the Series 7, General Securities Representative Examination is effective after your sponsoring firm has filed and received approval of your application. The Series 7 is taken by sponsored reps, but is not a requirement for becoming licensed in the state of New York.
- The Series 63 or Series 66 exam is required when working with clients in New York. The broker-dealer firm that you work for will most likely require you to take the Series 63, Uniform Securities Agent State Law Examination. New York also allows the Series 66, Uniform Combined State Law Examination, but this is less common than the Series 63. Both exams cover State securities regulations as described in the Uniform Securities Act.
- You must schedule the exam(s) within 120 days of registration, which is done online through the specified testing facilitator (Prometric or Pearson) when you’ve selected one of the New York locations.
- Examinations are held at either Prometric or Pearson Professional testing centers, which have various sites located throughout New York.
- Exams must be scheduled for different days, as they cannot be taken in succession on the same day.
- Be sure to prepare for the exam by studying beforehand. Arrive at least an hour before the scheduled exam time at your chosen testing center on examination day.
- You become licensed as a registered representative in New York after achieving a passing score on the required exam(s). You will be informed of your score immediately upon completing the exam(s).
Step 3: Get Your On-The-Job Training
You will continue to receive on-the-job sales and product knowledge training through your broker-dealer firm after passing the exams.
Sales training will demonstrate how to legally solicit clients and how to advise them in regards to buying and selling a variety of investments products, including:
- Options on stocks
- Variable contracts
- Mutual funds
- Corporate equity and debt securities
- Corporate, municipal and treasury bonds
- Government 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 securities license must be renewed annually. Renewals are done through the Web-CRD (Central Registration Depository). In New York, stockbrokers have their licenses automatically renewed on the anniversary date of their initial registration. The renewal fee in New York is $37, which may be covered by your broker-dealer firm and paid through the Web-CRD.
- Continuing Education Requirements
Registered representatives are required to fulfill continuing education requirements as part of the Securities Industry Continuing Education Program. This is comprised of two categories:
- The Regulatory Element
As required by FINRA, one Regulatory Element training program must be completed as you begin your third year in practice. This must be done within 120 days of your second annual registration. You will need to complete one continuing education program once every three years thereafter. The Regulatory Element is frequently updated to be relevant to current regulatory compliance issues and industry trends. The compliance department within your firm will let you know when and how to participate.The Regulatory Element training program that applies to Series 7 licensed registered representatives is known as the S101 General Program. The S101 consists of four modules:
- Communicating with the Public
- New and Secondary Offering & Corporate Finance
- Handling Customer Accounts/Trade and Settlement Practices
- Client/Product Suitability
- The Firm Element
Registered representatives participate in Firm Element training each year. This will involve product related training that the firm has determined is needed after performing their annual internal evaluation. This most often consists of training related to:
- Sales practices and suitability standards
- Investment features and associated risk factors
- Regulatory requirements related to products, services, and strategies
- The Regulatory Element
- Updating your Form U-4
Updating your Form U-4 for FINRA member brokers
As a registered representative you are responsible for informing your firm’s compliance department promptly of any changes affecting your Form U-4. This includes:
- Address updates
- Criminal disclosure
- Civil judgments against you
- Financial judgments against you
- Customer complaints
- Pending or completed disciplinary actions
- Updates for Non-FINRA member firms
Form M-4 is used to amend registered representative information and should be used for the following:
- Re-employment after cancellation ($150 fee)
- NASD transfer ($60 fee)
- Amendments to address, name, employment, or disciplinary action ($30)
- All fees paid by attorney’s check, certified check, bank check, or money order made payable to New York Office of the Attorney General and sent to Registration Section, New York State Department of Law
120 Broadway, 23rd Floor
New York, New York 10271
Clients and regulators will be able to review details on your education and credentials through FINRA’s BrokerCheck.