Securities Industry Essentials (SIE) Exam: Restructuring, Qualifications, Benefits

A new option for people looking for a job in the securities industry

Reviewed by Somer Anderson
Fact checked by Suzanne Kvilhaug

The qualification tests for several occupations in the financial services industry, formerly known as the Series exams, have been streamlined into one initial exam called the Securities Industry Essentials (SIE) Exam. Passing this exam qualifies you to pursue a career in the financial services industry.

In 2018, the Financial Industry Regulatory Authority (FINRA) streamlined its testing structure by consolidating the fundamental knowledge shared across several of the Series exams into the SIE. Candidates can then take an additional top-off qualification exam for the specific field they hope to enter. Let’s take a look at what this exam entails, including what you need to qualify.

Key Takeaways

• The SIE dramatically altered the structure of the various existing qualification exams.
• You do not need to be affiliated with a FINRA member firm in order to take the SIE.
• If you already passed one of the FINRA exams and are registered as a representative you do not need to take the SIE.

Changes in Securities Industries Essentials (SIE) Exam Qualifications

The SIE had a major structural impact on the qualification exams. The SIE replaces portions of every previous exam, including the Series 6, Series 7, Series 22, Series 55/56 (replaced by Series 57), Series 79, Series 82, Series 86/87, and Series 99 exams. These tests were shrunken, becoming qualification exams that focus on the specialized knowledge needed for each particular qualification.

Top-off exams are offered for the following representative categories:

• Investment Company Representative (IR) – Series 6
• General Securities Representative (GS) – Series 7
• DPP Representative (DR) – Series 22
• Securities Trader (TD) – Series 57
• Investment Banking Representative (IB) – Series 79
• Private Securities Offerings Representative (PR) – Series 82
• Research Analyst (RS) – Series 86 & 87
• Operations Professional (OS) – Series 99

Membership Changes

This was an effort to remove some of the duplicated information in the tests, but it also opened the door to a much more important change to the process of qualification, which is no longer having to be associated with a FINRA member firm to take the SIE.

Under the former FINRA rules, you generally needed to be employed or otherwise sponsored by a FINRA member to take the exams. The SIE removes this requirement, although you still have to be associated with a FINRA member firm to take the top-off exams. This means that an individual can choose to start on the path towards a FINRA qualification on their own.

Does Passing Guarantee a Job?

Successfully taking the SIE doesn’t guarantee anyone a successful break into the financial industry, but it is safe to say that passing it before looking for a job may give you an edge as a prospective employer only needs to sponsor the top-off exam to get you qualified for a particular role.

FINRA supported the idea that recent graduates and people looking to get into the industry should take the SIE on their own. They’ve made it more attractive by extending the validity of the SIE to four years, giving a generous window for passing participants to then find a firm to sponsor the top-off exams. FINRA member firms can see who passed the exam via the Central Registration Depository (CRD).

Note

FINRA offers different exams for people who want to be financial professionals. You can find a full list of qualification exams on the agency’s website.

Securities Industries Essentials (SIE) Exam and Top Off-Exams as Replacements

In their original Securities and Exchange Commission filings, FINRA targeted the fall of 2016 to early 2017 for a rollout of their highest volume exams. This proved to be a bit optimistic.

There were several shifts in the scheduling, one resulting from the requests of member firms and industry associations for more time to set their processes according to the new structure. The SIE and top-off exam rollout took place on Oct. 1, 2018, and was accompanied by the retirement of multiple low-volume exams, such as the Series 42 and Series 62 exams.

March 2018 was originally targeted for the implementation of the SIE and top-offs for Series 6, 7, and 79. Oct. 1, 2018, became the date for a complete overhaul rather than a phased-in approach.

Adding to some of the confusion was part of the attempt to modernize; the Series 55 was replaced by the Series 57, although it still appeared in the original notice for the SIE updates. That update was simply a standard part of FINRA reviewing and tweaking curriculum, rather than part of an overhaul of any core knowledge.

Structure of the Securities Industry Essentials (SIE) Exam

The SIE exam structure is largely based on the general knowledge components of the exams it replaced that portion for. The sections and question count are as follows:

One important point to note is that there are 85 questions, 10 of which are randomly distributed pre-test questions. These do not count toward the exam score. Candidates have an hour and forty-five minutes to complete the entire exam. A full outline of the SIE content is available on FINRA’s website.

Benefits of the Securities Industry Essentials (SIE) Exam

Passing the SIE exam can provide different benefits to your career:

• Job Hunting: Passing the exam will make you a more appealing job candidate and help you to stand out in interviews.
• Career: The SIE allows you to register as a representative in the financial securities industry.
• Knowledge: Studying for and passing the SIE ensures that you have a base knowledge of the securities industry as you begin your work.
• Specialize: Taking additional qualifications exams allows you to specialize in ways that help you meet clients’ complex financial needs.

Impact of SIE Exam Changes

If you already passed one of the FINRA exams and are currently registered as a representative, you are considered to have passed the SIE already. If you passed one of the exams and are not currently registered, you may need to take the SIE depending on how many years elapse between now and your next registration. And, of course, if you passed the exam but your registration has lapsed, you will need to take the SIE and the new top-off for that qualification before being reregistered.

This is pretty much the same as it has always been, except you would be taking two exams instead of one. In fact, the exams are designed to take the same total time as the previous versions. For example, the SIE and Series 7 top-off exam take the same amount of time as the previous Series 7 exam.

For member firms, the cost of the top-off exams is less than the previous exams because the content was shifted to the SIE. So, if an individual has passed the SIE prior to joining a firm, it is a good indication that this person already has the basic aptitude and wherewithal to pass a top-off exam. The cost of getting that individual registered is reduced because they paid out-of-pocket for the SIE, which will likely help make a candidate more attractive to a firm.

What Is the SIE Exam for?

The Securities Industry Essentials (SIE) Exam is designed to assess your knowledge of the securities industry. It ensures that people entering the industry are qualified and knowledgeable for the work they are doing. It streamlines the previous initial qualification exams into a single test, supplemented by “top-off” qualification exams.

What Does Passing the SIE Do for You?

If you want to be registered to work in a securities business, you must pass the SIE and the appropriate qualification exam for the type of securities work you’ll be doing. If you already took one of the old exams and your license lapsed—assuming two years have passed since you were last registered—you have to retake the Series 7. You need to retake the SIE only if four years have elapsed since you last passed it or were last registered.

Is the SIE Harder Than the Series 7?

The overall content covered over the two tests—the SIE and the Series 7 top-off exam—will be nearly identical to the previous Series 7.

How Often Do People Fail the SIE?

FINRA does not share the SIE pass rates. However, various test prep companies state that around 26-27% of candidates fail the exam on the first try. If you fail and want to retake the exam, the wait time is 30 days for the first and second attempts, then six months if you fail the third attempt.

The Bottom Line

If you were already sponsored to take one of the qualification exams, go for it. These changes won’t impact you at all. If you expect to be sponsored in the future, the overall content you need to master won’t change even though you have to do it in two chunks. If, however, you are not currently sponsored or in the industry, the SIE will open the door for you to start down the path of a financial career without having to associate with a member firm first. This change gives you a choice you didn’t have before.