F1 Seeking Business
24%of exam
F2 Opening Accounts
16%of exam
F3 Recommendations + Records
50%of exam
F4 Processing Transactions
10%of exam
Quick Facts
- Exam
- Series 6
- Registration
- IR
- Scored
- 50 questions
- Pretest
- 5 unscored
- Time
- 90 minutes
- Pass
- 70
- Fee
- $100 in 2026
- Corequisite
- SIE
- Eligibility
- Member-firm sponsorship
Retail vs Correspondence
Retail
- More than 25
- Thirty-day window
- Generally principal preapproval
Correspondence
- 25 or fewer
- Thirty-day window
- Risk-based supervision
Audience count controls category
Communication Types
- Correspondence
- 25 or fewer retail recipients
- Retail communication
- More than 25 retail recipients
- Counting window
- Any 30 calendar days
- Institutional communication
- Only institutional investors
- Retail approval
- Generally principal preapproval
- Correspondence review
- Risk-based supervision
- Institutional review
- Written supervisory procedures
- Internal communication
- Not institutional communication
Selling Materials
- Final prospectus
- Statutory sale disclosure
- Preliminary prospectus
- Incomplete final offering terms
- Summary prospectus
- Condensed fund disclosure
- Generic advertising
- No specific security
- Fund rankings
- Rule 2212 conditions
- Bond volatility rating
- Rule 2213 conditions
- Variable contract material
- Rule 2211 standards
- Fair and balanced
- Benefits paired with risks
- Promissory claim
- Never permitted
- Material omission
- Makes communication misleading
Conduct Limits
- Business-gift ceiling
- $300 each recipient yearly
- Effective date
- March 30, 2026
- Rule scope
- Business-related employee gifts
- Retail customer gifts
- Rule 3220 does not apply
- Personal gifts
- Rule exception may apply
- De minimis items
- Rule exception may apply
- Aggregation
- Same recipient annual total
- Records
- Preserve gift details
Customer Profile
Assets, aims, access, attitude, and age
Assets: capacityAims: objectivesAccess: liquidityAttitude: riskAge: horizon
JTWROS vs TIC
JTWROS
- Equal undivided interests
- Survivor receives share
- Avoids probate transfer
TIC
- Interests may differ
- Estate receives share
- Probate may apply
Survivor vs estate
Account Gate
- Identity unverified→Stop account opening
- Profile incomplete→Gather essential facts
- Retail recommendation→Apply Reg BI
- Short time horizon→Check liquidity
- High concentration→Consider diversification
- Discretion requested→Obtain written authority
- Suspicious activity→Escalate internally
- Order discrepancy→Notify supervisor
- Written complaint→Record and escalate
Account Ownership
- Individual
- One owner
- JTWROS
- Survivor receives ownership
- TIC
- Estate receives decedent share
- Community property
- State marital ownership
- Custodial
- Irrevocable minor gift
- Trust
- Trustee follows document
- Corporate
- Resolution names authority
- Partnership
- Agreement controls authority
Customer Onboarding
- CIP
- Verify customer identity
- KYC
- Know essential customer facts
- Regulation S-P
- Privacy and safeguards
- Power of attorney
- Documents third-party authority
- Discretionary account
- Written customer authority
- Suspicious activity
- Escalate internally
- Age
- Life-stage constraint
- Income
- Cash-flow capacity
- Net worth
- Financial capacity
- Tax status
- After-tax consequence
- Time horizon
- Holding-period need
- Liquidity need
- Cash-access requirement
- Risk tolerance
- Loss comfort
- Investment objective
- Desired outcome
Function Weights
Seek 24 | Open 16 | Recommend 50 | Process 10
F1: 12 itemsF2: 8 itemsF3: 25 itemsF4: 5 items
Series 6 vs Series 7
Series 6
- Limited product scope
- Closed-end IPO only
- No stocks or options
Series 7
- Broader securities scope
- Closed-end secondary allowed
- Stocks and options allowed
Packaged products vs broad authority
Series 6 Product Scope
- Mutual funds
- Permitted
- Closed-end fund IPO
- Permitted initial offering
- Closed-end secondary
- Outside Series 6 scope
- Variable annuities
- Permitted variable contract
- Variable life
- Permitted variable contract
- UITs
- Permitted
- 529 plans
- Permitted municipal fund security
- LGIPs
- Permitted municipal fund security
- ABLE accounts
- Municipal fund security
- Individual stocks
- Outside Series 6 scope
- Corporate bonds
- Outside Series 6 scope
- Options
- Outside Series 6 scope
Fund Price Math
NAV + load = POP
Charge dollars: POP-NAVCharge percent: charge/POPForward price: next NAV
Open-End vs Closed-End
Open-end
- Continuously issued
- Redeemed at next NAV
- Forward priced
Closed-end
- Fixed share count
- Trades intraday
- Premium or discount
Redeemable vs exchange-traded
Fund Charge Picker
- Large current purchase→Check breakpoint
- Existing family holdings→Use ROA
- Planned future purchases→Consider LOI(13-month intent)
- Early share redemption→Check CDSC
- Calculate sales charge→POP minus NAV
- Order awaits pricing→Next computed NAV
- Fund family switch→Review taxes and loads
- Fixed periodic purchases→DCA(No guaranteed profit)
Fund Structure
- Open-end fund
- Continuously issues redeemable shares
- Closed-end fund
- Fixed shares trade intraday
- UIT
- Fixed unmanaged portfolio
- ETF
- Exchange-traded pooled shares
- Money market fund
- Short-term portfolio
- Interval fund
- Periodic limited repurchases
- Conduit treatment
- Distributions pass through taxation
- Diversification
- Reduces nonsystematic risk
AIR Direction
Actual beats AIR: payment rises
Actual = AIR: unchangedActual below: payment falls
Variable Contract Logic
- Need market-based accumulation→Separate account
- Need insurer guarantees→General account
- Nonqualified annuity withdrawal→LIFO taxation
- Nonqualified annuity payout→Exclusion ratio
- Return exceeds AIR→Payment rises
- Return trails AIR→Payment falls
- Contract exchange→Section 1035(Review new surrender period)
- Need early liquidity→Check surrender charge
- Tax-deferred account purchase→Justify added benefits
Fund Pricing
- NAV
- Assets minus liabilities per share
- POP
- NAV divided by load complement
- Sales charge dollars
- POP minus NAV
- Sales charge percent
- Charge divided by POP
- Forward pricing
- Next computed NAV
- Front-end load
- Paid at purchase
- CDSC
- Paid at redemption
- 12b-1 fee
- Asset-based distribution expense
- Breakpoint
- Larger purchase lowers load
- LOI
- Future purchases over 13 months
- ROA
- Existing holdings count
- Fund family exchange
- Usually taxable disposition
- Reinvested distribution
- Taxable; increases basis
- Dollar-cost averaging
- No profit guarantee
- Breakpoint sale
- Prohibited below-threshold recommendation
Account Risk
General guarantees; separate swings
General: insurer riskSeparate: owner risk
LOI vs ROA
LOI
- Future purchase intent
- 13-month window
- Escrow may apply
ROA
- Existing eligible holdings
- No future promise
- Current value counts
Future commitment vs accumulated value
Variable Contracts
- General account
- Insurer bears investment risk
- Separate account
- Owner bears investment risk
- Accumulation unit
- Pre-annuitization ownership unit
- Annuity unit
- Post-annuitization payment unit
- Annuitization
- Units fixed; values fluctuate
- AIR
- Variable payment benchmark
- Return above AIR
- Next payment rises
- Return below AIR
- Next payment falls
- Immediate annuity
- Payout begins soon
- Surrender charge
- Early exit charge
- M&E charge
- Insurance risk expense
- Living benefit
- Contract-owner guarantee
- Death benefit
- Beneficiary guarantee
- Section 1035
- Tax-deferred contract exchange
- Variable life
- Securities plus insurance product
General vs Separate Account
General
- Insurer owns assets
- Insurer bears risk
- Supports guarantees
Separate
- Segregated assets
- Owner bears risk
- Values fluctuate
Guarantee vs market exposure
Tax Quick Sort
- Nonqualified dividend
- Ordinary income rate
- Qualified dividend
- Preferential federal rate
- Capital gain distribution
- Long-term tax treatment
- Return of capital
- Reduces cost basis
- Reinvested distribution
- Still currently taxable
- Annuity accumulation
- Earnings tax deferred
- Nonqualified annuity withdrawal
- Gains first before annuitization
- Nonqualified annuity payout
- Exclusion ratio applies
- 529 qualified withdrawal
- Federal income-tax free
- 529 nonqualified earnings
- Tax plus possible penalty
- ABLE account
- Qualified disability expenses
- LGIP
- Government entity cash pool
Accumulation vs Annuitization
Accumulation
- Accumulation units
- Value builds
- Withdrawals remain possible
Annuitization
- Annuity units
- Income stream begins
- Payout option controls
Build value vs receive income
Risk + Records
- Systematic risk
- Cannot diversify away
- Nonsystematic risk
- Diversification can reduce
- Call risk
- Issuer redeems early
- Reinvestment risk
- Future rates may fall
- Liquidity risk
- Difficult timely sale
- Concentration risk
- Too much one exposure
- Beta
- Market sensitivity
- Alpha
- Risk-adjusted excess return
- Realized gain
- Position sold
- Unrealized gain
- Position remains held
- Confirmation
- Transaction details
- Account statement
- Periodic holdings and activity
Fixed vs Variable Annuity
Fixed
- General account
- Insurer bears risk
- Insurance product
Variable
- Separate account
- Owner bears risk
- Security and insurance
Guarantee vs investment performance
Arbitration vs Mediation
Arbitration
- Neutral decides
- Usually binding
- Award resolves dispute
Mediation
- Mediator facilitates
- Parties decide
- Settlement voluntary
Decision vs facilitated agreement
Orders + Resolution
- Order ticket
- Records transaction instructions
- Best execution
- Favorable reasonably available terms
- Trade date
- Order execution day
- T+1
- Standard next-business-day settlement
- Trade confirmation
- Sent transaction disclosure
- Cancel and rebill
- Correct documented error
- Erroneous report
- Notify supervisor promptly
- Written complaint
- Record and escalate
- Arbitration
- Binding dispute resolution
- Mediation
- Facilitated voluntary settlement
- Form U4 event
- Escalate reportable change
Common Traps
Scored vs visible
50 scored questions ≠ 55 questions displayed
SIE vs registration
SIE grants no authority ≠ Both exams plus registration
Closed-end scope
Initial offering permitted ≠ Secondary trading excluded
Value vs price
NAV is fund value ≠ POP is purchase price
Discount vs violation
Breakpoint saves customer ≠ Breakpoint sale harms customer
DCA vs guarantee
DCA averages purchase cost ≠ Profit never guaranteed
Deferral vs deduction
Nonqualified growth tax deferred ≠ Nonqualified contribution not deductible
Tax wrapper duplication
Retirement account already deferred ≠ Annuity needs added benefit
Error vs concealment
Errors require escalation ≠ Never alter records secretly
T+1 vs forward pricing
T+1 controls settlement ≠ Next NAV controls fund price
Old gift limit
$100 is obsolete ≠ $300 since March 30, 2026
Last Minute
- 1.Seeking business = 24%
- 2.Opening accounts = 16%
- 3.Recommendations and records = 50%
- 4.Processing transactions = 10%
- 5.50 scored; 5 unscored
- 6.Time allowed: 90 minutes
- 7.SIE plus sponsor required
- 8.$300 business-gift ceiling
- 9.Closed-end: initial offering only
- 10.NAV plus load equals POP
- 11.Forward price uses next NAV
- 12.LOI future; ROA existing
- 13.General guarantees; separate fluctuates
- 14.AIR beaten: payments rise
- 15.Reg BI governs retail recommendations
- 16.Standard settlement: T+1
- 17.Errors and complaints: escalate
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