Stockbrokers, who are referred to in the Tennessee Securities Act of 1980 as broker-dealer agents, are investment experts who operate as sales representatives for their employing broker-dealer firms. Broker-dealer agents who wish to build a client base in Tennessee must become licensed by the Tennessee Department of Commerce and Insurance, Securities Division.
Step 1. Get Your Education
- While the Tennessee Securities Division does not require you to have a college-level education prior to being considered for licensure, it is likely that broker-dealer firms considering you for exam sponsorship and employment will expect a bachelor’s degree.
The following degrees can benefit you greatly in your pursuit of a career in securities sales:
- 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
- Before you can take the required exams, a broker-dealer firm currently registered in Tennessee must sponsor you. To become sponsored, apply for open broker-dealer agent positions by getting in touch with firms that interest you. Consider all your options, including smaller independent local or regional firms.
- The compliance team of your sponsoring firm will help you complete applications for the required exams, as well as applications required for licensure through the Tennessee Department of Commerce and Insurance, Securities Division.
You are required to submit a copy of your fingerprints for the requisite federal background check. You broker-dealer may be able to fingerprint you. If not, contact your local police station or sheriff’s office.
If you are sponsored by a FINRA-member firm, you’ll complete the Form U-4, Uniform Application for Securities Registration or Transfer, which will be your application for both the required exams and for licensure. It will then be submitted on your behalf through the Central Registration Depository (CRD) along with these fees billed to your sponsoring firm’s CRD User Account:
- $85 fee associated with submitting your registration to FINRA
- Exam fees, which are $265 for the Series 7, $96 for the Series 63, and $128 for the Series 66
- To process the background check, FINRA charges $30.25
- Tennessee Securities Department registration fee of $50
If you are sponsored by a non-FINRA member firm, you’ll apply for the exams using Form U-10 Uniform Examination Request for non-FINRA Members, and your firm’s compliance team will submit it through the Central Registration Depository (CRD). Since form U-10 serves only as an application for the required exams, you’ll still need to have your firm’s compliance team submit Form U-4, a filing fee of $50 (with check payable to the Tennessee Department of Commerce & Insurance), and proof of passing the Series 63 or Series 66, and a general securities exam through the CRD. If your sponsoring firm does not have CRD access, these materials should be mailed to:
Tennessee Department of Commerce & Insurance
Securities Division, Broker-Dealer Section
Suite 680, 500 James Robertson Parkway
Nashville, TN 37243-0583
- When your application has been approved, you are allowed to register for and schedule the Series 7, General Securities Representative Examination, or any other securities exam required by your sponsoring firm.
You will also register for and schedule the Series 63, Uniform Securities Agent State Law Examination OR the Series 66, Uniform Combined State Law Examination. Speak to your firm about which they would prefer you take.
You will have 120 days from the time your application is approved to schedule the exams. Schedule with the exam facilitator directly, choosing from these Tennessee test locations.
- You broker-dealer is likely to have resources that can help you prepare. Take full advantage of any study materials provided by your sponsor. Arrive an hour before your scheduled exam and be sure to have your ID with you.
- You will be notified of your score immediately after you complete the exam. You will be officially licensed as a broker-dealer agent in Tennessee once you have achieved a passing score on all required exams.
Step 3: Get Your On-The-Job Training
You will learn how your firm operates and gain a deeper understanding of securities sales, client assessment and investment suitability through on-the-job training. You are likely to participate in group sessions, as well as sit with a senior broker-dealer agent during sales calls to develop a deeper understanding of sales protocols and investment strategies that will help you be successful in your new role as broker-dealer agent.
Your training will likely expand on the securities you studied in preparation for the Series 7 exam:
- 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
- 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 Tennessee securities licenses expires on December 31st each year, but will be renewed automatically if you haven’t submitted documentation showing that you’ve left the profession. Tennessee’s $50 renewal fee is paid to the Tennessee Securities Division electronically through the Web-CRD (Central Registration Depository). If your employer is a Non-FINRA member firm without access to the CRD, they will make a check payable to the Tennessee Department of Commerce & Insurance.
Continuing Education Requirements
You are responsible for completing continuing education as outlined by the Securities Industry Continuing Education Program at certain points during your career. Continuing education, which consists of two training elements, was created to insure broker-dealer agents stay current on industry trends.
- The Regulatory Element
Beginning in your third year (within 120 days of your second annual registration), the Regulatory Element training program must be completed. Your broker-dealer will keep you updated as to when the Regulatory Element is due, which occurs every three years after the initial training.
The S101 General Program serves as the Regulatory Element for broker-dealer agents that hold the Series 7 license. The S101 is made up of four modules:
- Client/Product Suitability
- Communicating with the Public
- Handling Customer Accounts/Trade and Settlement Practices
- New and Secondary Offering & Corporate Finance
- The Firm Element
Each year, FINRA assesses what topics are most relevant to the financial industry and those who work within it. This assessment serves as an outline for your broker-dealer, who will implements its own Firm Element program each year based on FINRA’s recommendations and the topics it deems appropriate to its business. The Firm Element usually addresses:
- Regulatory requirements related to products, services, and strategies
- Investment features and associated risk factors
- Sales practices and suitability standards
Updating your Form U-4
Talk to the compliance department of your employing firm right away in the event that any of the following occur, as these events will require your Form U-4 to be updated:
- Address updates
- Changes to name or marital status
- Customer complaints
- Pending or completed disciplinary actions
- Financial judgments against you
- Civil judgments against you
- Criminal disclosure
The investing public can access your U-4 registration through FINRA’s BrokerCheck or by visiting the Tennessee Department of Commerce and Insurance, Securities Division, so it is vitally important you keep this information up to date.