What is the Series 7 Exam?

By Published On: August 13, 20212.2 min read

The General Securities Representative exam, otherwise known as The Series 7 exam, is administered by The Financial Industry Regulatory Authority (FINRA). The examination comprises 125 multiple choice questions, and candidates have 225 minutes to complete them. The pass mark is 72%, and all examinees must be sponsored by a FINRA member firm.

The Series 7 examines candidates on the four major job functions of a general securities representative. These are intended to assess the candidate in their knowledge and ability to execute each of these four functions:

  1. Seeks Business for the Broker-Dealer from Customers and Potential Customers
  2. Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives
  3. Provides Customers with Information about Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records
  4. Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions

Since 2018, the Securities Industry Essentials (SIE) examination is a co-requisite of the Series 7, and a passing grade in both is required to earn the General Securities registration. The SEC provides additional information on how to prepare for the exam.

What Does it Mean to Pass the Series 7 Exam?

Those who pass the Series 7 are able to sell all securities products, including corporate securities, municipal fund securities, options, direct participation programs, investment company products and variable contracts.

FINRA defines those activities and products as the following:

  • Public offerings and/or private placements of corporate securities (stocks and bonds)
  • Rights
  • Warrants
  • Mutual funds
  • Money market funds
  • Unit investment trusts (UITs)
  • Exchange-traded funds (ETFs)
  • Real estate investment trusts (REITs)
  • Options on mortgage-backed securities
  • Government securities
  • Repos and certificates of accrual on government securities
  • Direct participation programs
  • Venture capital
  • Sale of municipal securities
  • Hedge funds

What Does the Series 7 Qualification Mean in Commercial Real Estate?

The Series 7 qualifies a financial professional to purchase and/ or sell security products, such as Real Estate Investment Trusts (REITs) and Commercial Mortgage-Backed Securities (CMBS), both of which pertain to commercial real estate.

What are REITs?

Real Estate Investment Trusts (REITs) are publicly traded companies allowing investors to purchase shares in real estate portfolios. In this way, an individual can easily invest in the commercial real estate market, and own shares across the sector, which includes businesses that own and manage, or develop, commercial and residential real estate.

What are CMBS?

Commercial Mortgage-Backed Securities (CMBS) are fixed income investment products backed by mortgages solely on commercial real estate. CMBS are in the form of bonds, and the underlying loans (which act as collateral) are generally housed within trusts. These trusts are highly diversified with regard to their loan amounts, terms and the nature of the properties.

What is the Series 7 Exam?

By Published On: August 13, 20212.2 min read

The General Securities Representative exam, otherwise known as The Series 7 exam, is administered by The Financial Industry Regulatory Authority (FINRA). The examination comprises 125 multiple choice questions, and candidates have 225 minutes to complete them. The pass mark is 72%, and all examinees must be sponsored by a FINRA member firm.

The Series 7 examines candidates on the four major job functions of a general securities representative. These are intended to assess the candidate in their knowledge and ability to execute each of these four functions:

  1. Seeks Business for the Broker-Dealer from Customers and Potential Customers
  2. Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives
  3. Provides Customers with Information about Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records
  4. Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions

Since 2018, the Securities Industry Essentials (SIE) examination is a co-requisite of the Series 7, and a passing grade in both is required to earn the General Securities registration. The SEC provides additional information on how to prepare for the exam.

What Does it Mean to Pass the Series 7 Exam?

Those who pass the Series 7 are able to sell all securities products, including corporate securities, municipal fund securities, options, direct participation programs, investment company products and variable contracts.

FINRA defines those activities and products as the following:

  • Public offerings and/or private placements of corporate securities (stocks and bonds)
  • Rights
  • Warrants
  • Mutual funds
  • Money market funds
  • Unit investment trusts (UITs)
  • Exchange-traded funds (ETFs)
  • Real estate investment trusts (REITs)
  • Options on mortgage-backed securities
  • Government securities
  • Repos and certificates of accrual on government securities
  • Direct participation programs
  • Venture capital
  • Sale of municipal securities
  • Hedge funds

What Does the Series 7 Qualification Mean in Commercial Real Estate?

The Series 7 qualifies a financial professional to purchase and/ or sell security products, such as Real Estate Investment Trusts (REITs) and Commercial Mortgage-Backed Securities (CMBS), both of which pertain to commercial real estate.

What are REITs?

Real Estate Investment Trusts (REITs) are publicly traded companies allowing investors to purchase shares in real estate portfolios. In this way, an individual can easily invest in the commercial real estate market, and own shares across the sector, which includes businesses that own and manage, or develop, commercial and residential real estate.

What are CMBS?

Commercial Mortgage-Backed Securities (CMBS) are fixed income investment products backed by mortgages solely on commercial real estate. CMBS are in the form of bonds, and the underlying loans (which act as collateral) are generally housed within trusts. These trusts are highly diversified with regard to their loan amounts, terms and the nature of the properties.