Finra has unveiled details of its new, simplified securities industry “essentials” exam.

The entry-level SIE exam is part of a major overhaul of the licensing system, which turns the current licensing regime into a two-tier examination program. The SIE exam will cover basic industry knowledge, followed by “top-off” representative-level exams relevant to day-to-day activities for specific licenses such as the Series 7.

The new system goes into effect October 1, 2018. The SEC approved the change last July.

In a filing last week with the SEC, Finra detailed the outline of the SIE exam.

The SIE is limited to basic products, industry structure and regulations. Material covering job functions, which makes up much of the current exams, is removed.

 Products and risks constitute 44 percent of the SIE test; trading, customer accounts and prohibited activities makes up 31 percent of the questions; and capital markets (16 percent) and the regulatory framework  (9 percent) make up the rest.

The new SIE has 75 questions and takes one hour and 45 minutes to complete. By contrast, the existing Series 7 has 250 questions and takes six hours. The proposed cost of the new exam is $60 compared to $305 for the Series 7.

With the new system, Finra wants to eliminate duplicative testing of general securities knowledge when individuals take multiple tests.

Notably, those taking the SIE exam will not need to be associated with a broker-dealer. That change is designed to bring more new entrants into the industry. Affiliation with a B-D and a top-off exam will be needed to get a license and engage in the securities business.