The Securities and Exchange Commission has approved a Financial Industry Regulatory Authority proposal that makes major changes in the securities licensing and exam system.
On Friday, the SEC approved the plan to create a two-tier examination system, allow more flexibility in obtaining and maintaining licenses and phase out a number of outdated exams and licenses.
The update will create a “securities industry essentials” (SIE) exam, which is an entry-level test covering industry basics. “Top-off” exams would then be required for specific securities and principal licenses.
Individuals taking the SIE exam would not need to be associated with a broker-dealer. However, to engage in the securities business, an affiliation with a B-D and a full license will be needed.
Finra is also expanding the use of “permissive” registrations, which allow people to obtain and keep a license even when they don’t perform the specific role covered by the registration.