A new licensing and exam system will begin October 1, 2018, Finra said in a regulatory notice Thursday.
 
Under the new plan, Finra will create a two-tier examination system and allow more flexibility in obtaining and maintaining licenses.
 
The first tier of the new exam program is a “securities industry essentials” (SIE) exam, an entry-level test covering general industry knowledge of basic products, industry structure and regulations.
 
“Top-off” representative-level exams relevant to day-to-day activities would then be required for specific securities and principal licenses. These new license-specific tests will be about half the length of current versions.
 
“The restructured program eliminates duplicative testing of general securities knowledge on the representative-level qualification examinations by moving such content into the SIE,” Finra said in the notice.
 
Individuals taking the SIE exam will not need to be associated with a broker-dealer, but they will need an affiliation with a B-D and a full license to engage in the securities business.
 
Finra will also be providing more flexibility to obtain and keep a license even when an individual doesn’t perform the specific role covered by the registration.
 
These additional changes are designed to bring more new entrants into the industry and help firms develop existing talent.
 
Individuals who are registered as of Oct. 1, 2018 will not have to take the new tests, and will be considered to have passed the SIE if they seek other licenses after that date.
 
Individuals whose licenses terminated between October 1, 2014 and September 30, 2018 will also be given credit for having passed the SIE, provided they re-register within four years from the date of their last registration. But they will have to re-qualify with the appropriate representative-level exam.
 
Representative-level and principal-level registrations continue to be subject to a two-year lapse of registration period, Finra said, while the SIE is subject to a four-year expiration period.
 
The SEC approved the new licensing and exam system last July.