15.2 Agent Registration
Key Takeaways
Agents represent broker-dealers in securities transactions.
Clerical staff and issuer reps in exempt transactions are not agents.
SIE requires no sponsor; Series 7 or 6 require BD sponsorship.
Agent registration is valid only while associated with a registered BD.
Supervisors must be registered principals (Series 24, 26, or 27).
Agent Registration Requirements
Agents are individuals who represent broker-dealers or issuers in securities transactions. Understanding agent registration requirements is essential for the Series 65 exam.
Definition of Agent
An agent is any individual (other than a broker-dealer itself) who represents a broker-dealer or issuer in:
- Effecting purchases or sales of securities
- Attempting to effect purchases or sales of securities
| Key Points | Details |
|---|---|
| Must Be Individual | Agents are natural persons, not firms |
| Representative Relationship | Acts on behalf of BD or issuer |
| Transaction-Related | Involved in effecting or attempting securities transactions |
| Also Called | Registered Representative, stockbroker |
Who Is NOT an Agent
Exclusions from Agent Definition
| Exclusion | Conditions |
|---|---|
| Clerical/Administrative Staff | No securities sales activities |
| Issuer Representatives (Exempt Transactions) | Certain transactions don't require registration |
| Non-Compensated Officers/Directors | Not compensated for selling securities |
| Persons in Non-Sales Roles | Operations, compliance (non-customer facing) |
Issuer Transactions NOT Requiring Agent Registration
Representatives of issuers are NOT agents when effecting:
| Transaction Type | Details |
|---|---|
| Employee Benefit Plans | Sales to employees under qualified plans |
| Isolated Non-Issuer Transactions | Occasional, not part of regular business |
| Institutional Transactions | Sales to banks, insurance companies, etc. |
| Existing Security Holder Transactions | Stock dividends, rights offerings |
State Registration Requirements
Registration Process
| Step | Details |
|---|---|
| 1. Association | Must be associated with registered broker-dealer |
| 2. Form U4 | File through Central Registration Depository (CRD) |
| 3. Examinations | Pass required qualifying exams |
| 4. Background Check | Fingerprinting, criminal/regulatory history |
| 5. State Fees | Pay applicable registration fees |
| 6. Approval | Await state processing |
Form U4 Contents
| Category | Information Required |
|---|---|
| Personal | Name, SSN, DOB, addresses (5 years) |
| Employment | History for past 10 years |
| Education | Schools, degrees, certifications |
| Disclosures | Criminal, regulatory, civil, financial, termination |
| Fingerprints | Required in most states |
Qualification Examinations
Securities Industry Essentials (SIE)
| Requirement | Details |
|---|---|
| Sponsor | No sponsor required—anyone 18+ can take |
| Questions | 80 questions (75 scored, 5 pretest) |
| Time | 105 minutes |
| Passing Score | 70 (a scaled score) |
| Cost | $100 |
| Validity | 4 years from passing |
Series 7 (General Securities Representative)
| Requirement | Details |
|---|---|
| Corequisite | SIE (pass both, in either order) |
| Sponsor | Requires broker-dealer sponsorship |
| Questions | 130 questions (125 scored, 5 pretest) |
| Time | 225 minutes (3 hours 45 minutes) |
| Passing Score | 72 (a scaled score) |
| Scope | Broadest representative license—most securities |
Series 6 (Investment Company/Variable Contracts)
| Requirement | Details |
|---|---|
| Corequisite | SIE (pass both, in either order) |
| Sponsor | Requires broker-dealer sponsorship |
| Questions | 50 scored questions |
| Time | 90 minutes |
| Passing Score | 70 (a scaled score) |
| Scope | Limited—mutual funds, variable annuities, variable life |
State Law Exams
| Exam | Purpose |
|---|---|
| Series 63 | Uniform Securities Agent State Law |
| Series 65 | Investment Adviser Representative |
| Series 66 | Combined 63 + 65 content (SIE and Series 7 are corequisites) |
Common Registration Combinations
| Role | Exams Required |
|---|---|
| General Securities Rep | SIE + Series 7 + Series 63 |
| Investment Company Rep | SIE + Series 6 + Series 63 |
| Investment Adviser Rep (only) | Series 65 |
| Dual (Rep + IAR) | SIE + Series 7 + Series 66 |
On the Exam: The SIE can be taken without sponsorship and remains valid for 4 years. The Series 7 and Series 6 require broker-dealer sponsorship via Form U4.
Registration Maintenance
Effective Registration
| Principle | Details |
|---|---|
| BD Association Required | Registration only valid while associated with registered BD |
| Termination | Registration terminates when association ends |
| Transfer | Can transfer to new BD via Form U4 |
| Re-Registration | Must re-register with new firm |
Continuing Education (FINRA)
| Element | Requirement |
|---|---|
| Regulatory Element | Annual computer-based training |
| Firm Element | Firm-specific annual training |
| Non-Compliance | Status becomes "CE Inactive" |
| Inactive Status | Cannot engage in securities activities |
Supervision Requirements
Broker-Dealer Obligations
| Requirement | Details |
|---|---|
| Written Supervisory Procedures | Document supervision framework |
| Designated Supervisors | Principals responsible for oversight |
| Transaction Review | Monitor trading activity |
| Communication Review | Review correspondence, emails, social media |
| Training | Ongoing compliance education |
| Red Flag Response | Investigate and address issues |
Principal Registration
Supervisors must be registered as principals:
| Principal Type | Exam Required |
|---|---|
| General Securities Principal | Series 24 |
| Financial/Operations Principal | Series 27 |
| Investment Company Principal | Series 26 |
Key Takeaways
- Agents are individuals representing BDs in securities transactions
- Clerical staff and issuer reps in exempt transactions are not agents
- SIE requires no sponsor; Series 7/6 require BD sponsorship
- Agent registration is only valid while associated with a registered BD
- Supervisors must be registered principals (Series 24, 26, or 27)
The Securities Industry Essentials (SIE) exam:
Requires broker-dealer sponsorship to take
Can be taken by anyone 18 or older without firm sponsorship
Is only available to investment advisers
Must be taken after the Series 7
An agent's state registration:
Continues indefinitely once obtained
Is only valid while associated with a registered broker-dealer
Transfers automatically to any new employer
Expires after 4 years regardless of employment
The Series 7 exam allows a registered representative to:
Only sell mutual funds and variable annuities
Sell virtually all types of securities products
Provide investment advice as an IAR
Supervise other registered representatives
Sections you finish are checked off in the contents.