Securities Industry Essentials Exam 2023-2024 For Dummies with Online Practice

Steven M. Rice

• Publisher: For Dummies
• Year: 2022
• ISBN:
  9781119886877
• Edition: 3
• Topic: Aides à l'étude
• Subtopic: Guides d'étude

Knock out the SIE on your first try

Securities Industry Essentials Exam 2023-2024 For Dummies is this year's definitive study guide for prospective securities industry professionals—that means you! FINRA administers this notoriously difficult exam as a prerequisite to the Series 7 and other series level exams, so you'll need to know your stuff in order to get where you're going. Securities professionals are in high demand, and this study guide can help you become one of them. You'll have access to two complete practice tests, plus two more online!

With this trusted Dummies guide, you have everything you need to get a high score on the SIE. Hundreds of practice questions help you internalize the must-know info, and we explain the content in a way you can easily grasp. You'll go into your securities exam feeling, well, secure!

• Review all the content tested on the Security Industry Professionals exam
• Get prepared with two in-book practice tests and two more online tests
• Launch your dream career in the growing field of securities, commodities, and financial services
• Take an in-depth look at how the SIE exam is structured and how you can improve your score

Let employers see how well you know your stuff—this friendly study guide is your ticket to passing the SIE.

Part 1

Getting Started with the SIE Exam

IN THIS PART …

Review the computerized exam format and the procedures for registering to take the SIE exam.

Select the right study course and materials to prepare yourself for exam day.

Understand how to organize your study time efficiently and effectively — even when your time is limited.

Examine test-taking tips to maximize your chances of selecting the correct answer choices.

Discover what to expect on test day (because the only surprises that day should involve the triumphant return of your social life).

Chapter 1

Introducing the SIE (Securities Industry Essentials) Exam

IN THIS CHAPTER

Introducing the SIE

Taking a look at companion tests

Registering to take the exam

Uncovering topics tested on the SIE exam

Mastering the computerized exam format

Congratulations on your interest in becoming a financial professional! But before you can lose yourself in the energy of the office, the eager voices of your clients, and the warm glow of success, you have to face the SIE as well as one of the top-off (qualification) exams such as the Series 7 or Series 6. In this chapter, I give you an overview of the SIE exam, including its purpose, structure, format, scoring, and some helpful tips to guide you through the registration procedure.

The first four chapters go over things like what the exam is, how to study for it, how to take the test, and so on. If you feel that you have a handle on those things, feel free to jump to Chapter 5 to get right into the meat and potatoes of what you need to learn.

What Is the SIE Exam, Anyway?

Initially, the information in the SIE (Securities Industry Essentials) exam was included in books that covered the Series 6, Series 7, Series 22, and so on. The Financial Industry Regulatory Authority (FINRA) had the idea to strip similar information from these exams and create the SIE exam. What I’ve found is that besides stripping the information from these other exams, unfortunately for you and other exam-takers, FINRA added a lot more information. What this means is that you’ll have to study a lot of information to answer 75 randomized questions.

The SIE is an introductory-level exam designed to test your basic knowledge of the securities industry and is open to anyone age 18 or older. Fortunately, association with a securities firm isn’t required; individuals may take the SIE exam before or after being hired by a firm. You need to know certain terminology used in the securities industry, different securities products, how the market is structured, how the market functions, different regulatory agencies and their purposes, as well as regulated and prohibited practices.

Because unsponsored individuals are allowed to take the exam, you can take a step toward becoming a securities professional prior to being hired. (Although you can take the SIE exam and one of the corequisite exams in any order, most people take the SIE first.)

The exam’s purpose is to protect the investing public by ensuring that the individuals who sell or give information about securities have mastered the skills and general knowledge that competent practicing representatives need to have.

The SIE exam itself is a computer-based exam given by Prometric (www.prometric.com/finra) at test centers throughout the United States or in your desired location (see the “So you want to take the test at your location” sidebar later in this chapter). The 75-question exam, administered by FINRA, is 105 minutes in duration. A score of 70 percent or better gets candidates a passing grade and puts big smiles on their faces. After you pass the SIE, the results remain valid for four years from the date you pass. The passing rate for those taking the SIE exam for the first time is around 74 percent. If you include those who have taken the exam more than once, it’s closer to 82 percent.

The sections later in this chapter explain the setup of the SIE exam and give a rundown of how to register for the exam. If you have other questions, call the FINRA support team at [phone] or visit www.finra.org/industry/qualification-exams.

Profiling the SIE Exam-Taker

The SIE exam is a corequisite exam for people who want to become investment company reps, general securities reps, direct participation program (DPP) reps, securities traders, investment banking reps, private securities offerings reps, research analysts, or operations professionals.

The purpose of the SIE exam was to strip the information that was similar in all the aforementioned exams to make it easier for people to add licenses to their résumés. So to become a securities professional, you need to pass the SIE exam, one of the exams listed in the next section, and typically the North American Securities Administrators Association (NASAA) Series 63 or 66 exam.

People who have a long and sordid history of embezzlement, forgery, and fraud are generally disqualified and precluded from taking the exam. Candidates must disclose any criminal records, and the FINRA reviews applications on a case-by-case basis.

One’s Not Enough: Tackling the CoRequisite Exams

The SIE exam is just your starting point. To become an industry professional, you have to take one of the top-off exams and, in most cases, the Series 63 or Series 66 state exam. As far as which top-off exam(s) you’ll have to take, the answer depends on the job you want and/or are hired to do. After you pass the SIE exam, the financial institution that hires you will tell you which exams you need to take and will help you schedule them.

In addition to taking the SIE exam and one of the top-off or corequisite exams listed in the following sections, you’ll likely have to take either the NASAA Series 63 exam or the NASAA Series 66 exam. These exams go into state securities laws as opposed to federal securities laws, which are the focus of exams like the SIE. The difference between the Series 63 and Series 66 is that the Series 66 allows holders to become investment advisers as well. Your employer will let you know which exam it wants you to take. More and more broker-dealers want their agents to take the Series 66. Don’t worry too much; neither of these exams are the beasts that some of the other listed exams are.

Series 6: Investment Company and Variable Products Representative Exam

Series 6 is the license required by most banks and insurance companies. This license allows the holder to sell products such as mutual funds, variable annuities, and variable life insurance (along with having an insurance license). To see the complete outline of what’s covered, go to www.finra.org/sites/default/files/Series_6_Content_Outline.pdf.

Series 7: General Securities Representative Exam

Series 7 is the license exam that most people will be taking. This license is required by most broker-dealers. The Series 7 allows you to sell equity securities, mutual funds, bonds, direct participation programs, options, and so on. To see the complete outline of what’s covered, go to www.finra.org/sites/default/files/Series_7_Content_Outline.pdf.

As a side note, if you’re taking the Series 7 exam after taking the SIE, I’ve also written Series 7 Exam 2022-2023 For Dummies, 5th Edition (John Wiley & Sons, Inc.), which is laid out in the same logical way as this book for ease of studying.

Series 22: DPP Representative Exam

If you’re planning to focus your career on selling direct participation programs (DPPs), the Series 22 exam is the one for you. This license allows you to solicit and sell limited partnership interest in DPPs such as real estate, oil and gas, and equipment leasing. To see the complete outline of what’s covered, go to www.finra.org/sites/default/files/Series_22_Content_Outline.pdf.

Series 57: Securities Trader Exam

The Series 57 license allows holders to ex...