Securities licensing information
The securities industry is one that is regulated and requires licensing for certain jobs. While not every job on Wall Street requires a license, many of the positions do have a licensing requirement.
There are many different licenses offered but it's most important to know that an individual cannot apply for a license like they would a driver's license. In fact, you must first be employed by a securities firm that is a member of the NASD (National Association of Securities Dealers), be employed in a job that requires a license, and qualify for testing to obtain that license.
The registration application requires information about the individual's prior employment and disciplinary history. The NASD prescribes two levels of qualification and registration:
- Registered representatives, generally sales personnel
- Principals, generally officers of the firm and other management personnel involved in the day-to-day operation of the firm's investment banking or securities business.
As part of the registration process, securities professionals must pass an examination administered by the NASD to demonstrate competence in the areas in which they will work. These mandatory qualification examinations cover a broad range of subjects on the markets, as well as the securities industry and its regulatory structure, ensuring a minimum level of understanding and expertise. The areas in which candidates are tested include federal securities laws; Securities and Exchange Commission and NASD rules and regulations; securities products; the operation and interrelation of financial markets; economic theory and kinds of risk; corporate financing, accounting, and balance sheet analysis; portfolio theory and analysis; fair sales practices, including solicitation and presentation; types of customer accounts; and tax treatment of various investments.
The NASD also administers examinations for the securities industry regulators and the states to individuals seeking registration with securities firms.
For further information about licensing requirements, please visit: http://www.nasd.com/RegistrationQualifications/index.htm
Continuing Education
On February 8, 1995 the Securities and Exchange Commission (SEC) approved rules that established a formal, two-part, industry wide Continuing Education Program. The program became effective July 1, 1995, and is comprised of two components: Regulatory Element and Firm Element.
The Regulatory Element requires registered persons to complete a computer-based training program, which includes topics related to sales practices, customer communications, compliance, ethics, and other subjects pertinent to conducting a securities business.
The Firm Element requires the firms to provide ongoing training, tailored specifically to the products and services they provide. Such training must be reviewed and updated at least annually, and must also focus on supervisory training needs. Compliance with Regulatory Element and Firm Element requirements is evaluated as part of the on-site examinations that are conducted by SROs (self-regulatory organizations). For further information about continuing education in the securities industry, please visit: http://www.securitiescep.com
If you are an established securities industry professional and are interested in learning more about your continuing education requirements, please visit your firm's training or compliance department to determine the continuing education you are required to obtain.