Stockbrokers are also referred to as registered representatives, because they function as securities salespeople for the broker-dealers that employ them. In Ohio, individuals who plan to become stockbrokers and offer securities to clients must be registered with The Ohio Division of Securities.
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Before becoming registered in Ohio, a broker-dealer firm registered in the state must sponsor you. Once you are sponsored, your broker-dealer firm will assist you with registering with the Financial Industry Regulatory Authority (FINRA) Central Registration Depository (CRD). Once a registered representative becomes effectively licensed by the state of Ohio, they are able to solicit clients for securities sales.
Step 1. Get Your Education
- Ohio does not have educational requirements for registered representatives, but most broker-dealers will only consider applicants that have a bachelor’s degree. In addition, many registered representatives will pursue professional designations throughout their career, which often require a four-year degree.
Registered representatives will often pursue the following degrees:
- BA-Consumer and Family Financial Services
- BS-Business Administration- Finance
- Business law
- Business communications
- Business ethics
- Behavior of organizations, persons and groups
- Quantitative applications in business
- Accounting, in particular courses in financial accounting and managerial accounting
Step 2: Take the Required Exams
- You will be allowed to register for the necessary exams after you have found a broker-dealer to sponsor you. To find a sponsor, apply for positions online or through a local job board, contact a broker-dealer that you find interesting, or network with those in your professional and social circles.
- Seek assistance from your broker-dealer’s compliance department in order to complete the Form U-4, Uniform Application for Securities Registration or Transfer. Once complete, your broker-dealer firm will file the Form U-4 through the Central Registration Depository (CRD).
- Information that is required on the U4 includes your personal data, past employment, education, and any criminal background.
- An $85 fee is required through FINRA, which should be covered by your employing broker-dealer firm.
- The test fee for the Series 7 exam is $265. Ohio requires registered representatives to hold the Series 7 license.
- 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, where you can be fingerprinted for a small cost. 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 Ohio is $60, which is paid to the Ohio Division of Securities through the CRD by your broker-dealer.
Step 3: Get Your On-The-Job Training
Your broker-dealer firm will provide you with on-the-job training as you begin your career. It is likely that you will job shadow a fellow employee. This will give you insight into how your firm operates, as well as the fundamentals of securities sales. You broker-dealer may have you attend a sales training module, either internally or with an outside vendor.
The on-the-job training you receive will demonstrate how to solicit clients and effectively provide them with securities advice on products, like:
- Variable contracts
- Options on stocks
- Mutual funds
- Government securities
- Corporate, municipal and treasury bonds
- Corporate equity and debt securities
- Open-end and closed-end investment company shares
- Corporate, municipal and treasury bonds
- 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
In Ohio, your securities license must be renewed annually. Licenses are not renewed automatically in Ohio. Your broker-dealer will renew you license for you and pay the $60 renewal fee to the Ohio Division of Securities through the CRD.
- 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
The Regulatory Element training program must be completed within 120 days of your second annual registration (in the beginning of your third year). You will need to complete a Regulatory Element every three years thereafter.
Series 7 licensed registered representatives participate in the S101 General Program. As part of the Regulatory Element S101 covers:
- New and Secondary Offering & Corporate Finance
- Communicating with the Public
- Client/Product Suitability
- Handling Customer Accounts/Trade and Settlement Practices
- The Firm Element
Each year your broker-dealer firm will perform an internal evaluation based on the firm’s internal assessments of areas in need of focus. You are required to complete Firm Element training once a year. The Firm Element will cover relevant product and industry related training as identified by your broker-dealer. Firm Element training generally addresses the following areas:
- Sales practices and suitability standards
- Regulatory requirements related to products, services, and strategies
- Investment features and associated risk factors
- The Regulatory Element
- Updating your Form U-4
You are required to keep your broker-dealer aware of anything that could trigger a change to your Form U-4. Inform your firm’s compliance department so that FINRA will be alerted of any changes. Your Form U-4 can be affected by changes related to:
- Address updates
- Customer complaints
- Civil judgments against you
- Criminal disclosure
- Pending or completed disciplinary actions
- Financial judgments against you
Clients and regulators can review the information on your Form U-4 by using FINRA’s BrokerCheck.