Here are some frequently asked questions about the Securities Industry Essentials exam. Click on any of the questions to get more information.
The Securities Industry Essentials (SIE) exam is an introductory-level FINRA exam designed to test candidates’ knowledge of basic securities industry information, such as investment products, regulatory agencies, and prohibited activities. The SIE is a co-requisite requirement for qualification (“top-off”) exams, meaning securities industry professionals must pass the SIE along with a qualification exam in order to conduct securities business.
The exam consists of 75 questions that must be answered in one hour and 45 minutes.
There are four main topics (or “functions”) that the SIE examines. Below is a list of these topics and their respective number of questions, which add up to a total of 75 questions:
• Knowledge of Capital Markets – 12 questions
• Understanding Products and Their Risks – 33 questions
• Understanding Trading, Customer Accounts, and Prohibited Activities – 23 questions
• Overview of the Regulatory Framework – 7 questions
Candidates need to score a 70% or above in order to pass the exam.
The cost to register for the exam is $60.
No, the exam does not require sponsorship by a FINRA member firm.
Anyone 18 years of age and older can sit for the SIE exam—there are no educational or sponsorship requirements.
Individuals who registered as representatives prior to October 1, 2018, and maintained those registrations on or after that date, were considered to have already passed the exam and subsequently received a credit.
There are many benefits to taking the SIE exam. One major such benefit is that it can increase the chances of being noticed by a potential employer, as it proves your competency of necessary skills and information and demonstrates your ability to pass a challenging exam. College students or recent graduates considering a securities career, or professionals evaluating a career change, are examples of individuals who might benefit from taking the SIE exam.
It’s important to remember that passing the SIE exam does not automatically result in a securities license; as described earlier, the SIE is a co-requisite requirement for a qualification exam. Both are necessary for registration with FINRA. Thus, you will need to pass the SIE exam in order to be licensed, but there are additional registration requirements. After passing the exam, you will have a 4-year time window to take and pass the necessary qualification exam.
The SIE exam can be challenging. It tests your knowledge and comprehension of multiple topics regarding capital markets, securities products, industry regulations, and many more. About a quarter of first-time SIE exam takers do not pass the exam.
As of August 2021, the overall pass rate for the exam was 82%. For first-time exam takers, the pass rate was 74%.
Advice on how much dedicated study time is needed for the SIE differs among sources. Some recommend studying for as little as 20 hours, while others recommend as many as 150 hours. In reality, study times depend heavily on an individual’s focus, work history, and retention of the information they are studying. Someone who has just graduated with a finance degree, for example, may require less study time than someone brand new to the industry.
Try not to hit a certain number of study hours; rather, give yourself ample time before the exam to begin studying and then continue to study until you are comfortable with and highly confident in the information.
Those who know what to expect from the exam and who have thoroughly studied the proper materials have a higher chance of passing. Practice exams and study books are some of the most valuable tools prospective test takers can utilize to ensure their success. Good study habits, such as sticking to a consistent study routine, may also increase your chances of passing.
Some expert sources recommend immersing yourself in current industry trends by:
• Subscribing to financial news providers
• Reading online discussions
• Watching YouTube videos
• Engaging with both online and in-person sources
To register for the SIE exam visit the enrollment page of FINRA’s website.
Be sure to arrive 30 minutes early and have a government-issued ID, with a current photo and signature, on hand. Staff may also ask for the email address you used to register for your appointment. All personal items will be placed in a locker before taking the exam. The testing center will provide the necessary materials—a four-function calculator, scratch paper, a pen—and have tissues and noise-cancelling headphones available if needed.
Exam takers are immediately notified of their pass/fail status and will also be provided a printed copy of their results by the testing center. This results report contains important performance feedback on failed exams to help candidates improve.
Like all FINRA exams, you may retake the SIE exam 30 days after both your first and second attempts. If you fail three or more times in a row, you are then required to wait 180 days before another attempt.
Qualification exams, also referred to as “top-off” exams, are required along with the SIE exam to obtain FINRA registration and licensing. The qualification exams test knowledge on the specific types of business the candidate plans to participate in.
There are 8 different qualification exams for which the SIE is a co-requisite requirement:
• Series 6 – Investment Company Representative (IR)
• Series 7 – General Securities Representative (GS)
• Series 22 – DPP Representative (DR)
• Series 57 – Securities Trader (TD)
• Series 79 – Investment Banking Representative (IB)
• Series 82 – Private Securities Offerings Representative (PR)
• Series 86 and 87 – Research Analyst (RS)
• Series 99 – Operations Professional (OS)
Unlike the SIE exam, candidates must be associated with—sponsored by—a FINRA member firm in order to take a qualification exam.
Though sometimes mistaken for one another, the SIE and Series 7 are in fact separate and distinct FINRA examinations. Prior to the release of the SIE exam in 2018, the Series 7 (General Securities Representative) exam contained 250 multiple-choice questions with a time limit of 6 hours. In an effort to reduce redundancies across the qualification exams, FINRA structured the SIE exam to cover basic securities industry information and, as a result, the qualification exams were shortened and later nicknamed “top-off” exams.
The Series 7, for example, now only contains 125 multiple-choice questions which are more tailored to the day-to-day responsibilities of a general securities representative. It would be considered more difficult than the SIE exam.