The Series 63 license, also called the Uniform Securities Agent State Law Examination, allows the holder to buy and sell any kind of security in a particular state. Securities include:
– Mutual funds
– Variable annuity contracts
Why a Series 63 license is needed
If you want to become a registered representative, a stockbroker or a financial advisor who can buy and sell stocks and bonds for clients, you will need a Series 63 license. You will also need either a:
- Series 6 license, or Investment Company Products/Variable Contracts Limited Representative, or
- Series 7 license, a General Securities Representative.
Most people take the exams for both licenses at the same time. You cannot sell securities without both. The Series 6 and 7 exams cover the rules, regulations and practices of selling securities that are common across the country. The Series 63 license covers the principles of securities regulation at the state level.
A Series 6 license allows the holder to solicit sales of variable annuity contracts and mutual funds, unit investment trusts (UIT) but not individual stocks. A Series 7 license allows the holder to solicit sales of stocks, bonds, call and put options and real estate investment trusts (REIT).
The Series 63 license, is issued by FINRA, the Financial Industry Regulatory Authority, formerly known as NASD, or the National Association of Securities Dealers.
How to get a Series 63 license
To get a Series 63 license, you need to pass an exam that is designed to show that you understand state securities acts, rules and regulations, and the fiduciary responsibilities and ethics associated with selling securities. The exam consists of 65 questions. 60 of them are scored, but you won’t know which ones are scored and which are test questions being evaluated for inclusion in future tests. 43 questions must be answered correctly to receive a passing score. The time allotted for the test is an hour and fifteen minutes.
What you need to know to take the test
There are no specific educational requirements to take the Series 63 exam, so you don’t need a college degree in a specific area. You should have an understanding of finance and economics. There are many study guides and online courses available to help you study for the Series 63.
The material that is covered on the exam includes:
- Uniform securities law
- How securities and brokers are registered
- Definitions and common terms related to securities
- The Securities and Exchange Commission and its functions
- The specific laws concerning the trading of securities in your state.
Maintaining a Series 63 license
There are no specific continuing education requirements for maintaining a Series 63 license. There are, however, continuing education requirements for a Series 6 or Series 7 license, which anyone who has a Series 63 will also have.