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Series 57

Definition

The Series 57 is a financial exam that securities professionals must pass to become a Securities Trader. It is administered by the Financial Industry Regulatory Authority (FINRA) and covers areas like equity and debt instruments, options, investment strategies, and prohibitions. Upon passing the exam, an individual becomes qualified to trade directly with the public on Nasdaq and the OTC market.

Phonetic

The phonetics of the keyword Series 57 is: “ˈsɪəri:z ˈfɪftiː ˈsɛvən”

Key Takeaways

1. Industry Regulations: The Series 57 license is for traders who need to understand the most current regulations in the industry. It covers the Securities and Exchange Commission (SEC) rules and regulations, including the Financial Industry Regulatory Authority (FINRA) regulations.

2. Equity Trading: Obtaining the Series 57 license will mean that a trader is qualified and competent in the field of equity trading. It covers all major areas of equity trading including proprietary trading, market maker trading, fund management, and hedge fund trading.

3. Examination Requirements: To obtain the Series 57 license, one needs to pass the Series 57 exam which is administered by the Financial Industry Regulatory Authority (FINRA). The exam consists of 125 questions, and a score of 70% or more is required to pass.

Importance

The Series 57 license, also known as the Securities Trader Representative Exam, is a significant certification in the financial and business industries. This license is crucial because it authorizes professionals to trade in equity and convertible debt securities on Nasdaq and the New York Stock Exchange. Individuals who operate as equity traders, proprietary traders, and other similar roles typically pursue this certification. Having a Series 57 license not only ensures professionals meet the Financial Industry Regulatory Authority’s (FINRA) standards, but it also enhances their credibility and widens their career opportunities in trading and financial sectors.

Explanation

The Series 57, also known as the Securities Trader Representative Exam, is a critical certification for individuals who aspire to trade securities. The key purpose of the Series 57 exam is to measure the degree of knowledge and competence of an individual in the role of a securities trader. This includes understanding the responsibilities and duties of such a professional, including the execution of transactions, maintaining records, keeping track of financial obligations, and complying with regulations.

In terms of usage, the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) require individuals who wish to trade securities to pass the Series 57 exam to become licensed securities traders. Once the individual passes the exam, they are able to trade equity and convertible debt securities as a registered representative of a trading firm. As such, the Series 57 certification plays an important role in ensuring a basic level of competence and integrity within the world of securities trading.

Examples

1. Stockbrokers: Many stockbrokers need to take the Series 57 exam as part of their job requirements. This comprehensive test needs to be passed for them to work efficiently and legally in the securities industry. An example can be a finance graduate who gets recruited into a brokerage firm; they are likely to undertake this exam as a part of their training to be fully qualified for the job.

2. Proprietary Trading Firms: These firms trade stocks, bonds, options, commodities, and similar products. In such firms the proprietary traders are required to have passed the Series 57 exam in order to engage in short selling or traders who buy and sell financial instruments for the firm’s own profit.

3. Securities Industry Professionals: Individuals who are involved in the execution of equity and convertible debt securities transactions, whether they are buying, selling, or trading, require the Series 57 license. A real world example includes a broad range of securities industry professionals, like investment bankers, security traders, investment advisors etc., who need this license for many roles in their respective firms.

Frequently Asked Questions(FAQ)

What is Series 57?

The Series 57 exam, also known as the Securities Trader Representative Exam, involves the buying and selling of equity, convertible debt securities, and preferred stock for the purpose of resale.

Who needs to take the Series 57 Exam?

Traders who conduct business in equity and convertible debt securities need to take and pass the Series 57 exam to legally execute transactions on behalf of a trading firm.

What are the prerequisites for the Series 57?

Before being able to take the Series 57, one must first pass the Securities Industry Essentials (SIE) exam.

How can I register for the Series 57 test?

To register, one must be associated and sponsored by a member firm of FINRA or a Self-Regulatory Organization (SRO).

What is the structure of the Series 57 Exam?

The test is made up of 50 multiple-choice questions. The categories covered include equity trading, portfolio management, and risk management.

How is the Series 57 exam scored?

The exam is scored on a scale, with a score of 70 being the minimum required to pass.

Where can I study for the Series 57 Exam?

You can access study materials through the Financial Industry Regulatory Authority (FINRA) or through third-party providers.

How often can you take the Series 57 exam if you fail?

There is no limit to how many times you can retake the Series 57 exam. However, after failing twice, candidates must wait 30 days to retake, and after three or more fails, a 180-day wait period applies.

What is the validity period of the Series 57 license?

Once you pass the exam, your Series 57 license will remain valid as long as you are affiliated with a FINRA-member firm. If you leave the securities industry, your license will expire after two years.

What careers can I pursue after passing the Series 57 exam?

Successful candidates can pursue careers as securities traders, proprietary traders, or hedge fund managers.

Related Finance Terms

  • Securities Trader
  • FINRA (Financial Industry Regulatory Authority)
  • Equity Securities
  • Securities Trading Regulations
  • Options and Derivatives

Sources for More Information

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