Securities Industry Essentials (SIE) Exam

Written by CFI Team

What is the SIE Exam?

The Securities & Industry Essentials Exam is an introductory-level exam offered by FINRA that was introduced in 2018. The exam is catered to candidates who are interested in demonstrating basic industry knowledge of the securities business to prospective employers.

Key Highlights

The Securities Industry Essentials (SIE) Examination is an introductory level exam offered by FINRA that assesses basic securities industry information for anyone who is looking to work in the U.S. securities industry.
The subjects test a candidate’s knowledge of capital markets, understanding market and risks, understanding trading customer accounts, the regulatory framework, and prohibited activities in America.
Passing the SIE Exam doesn’t guarantee employment in the industry and prospective candidates will also need to take qualification exams in order to be registered to work in the industry.

Security Industry Essentials (SIE) Exam Overview

The SIE Exam is intended to help prepare students for a career in the securities industry by testing them on fundamental knowledge of the capital markets industry to ensure specific levels of competence and understanding. Topics that are covered in the introductory level exam include:

Industry terminology;
Different types of securities and their risks;
The structure of the securities industry market;
Regulatory agencies and their functions; and
Prohibited practices.

The SIE Exam is open to anyone 18 or over. The cost in 2024 is US$80 and you do not need to be a U.S. Citizen to take the exam. Candidates are also not required to be affiliated with a firm to take the SIE Exam nor have any previous industry experience, and results are valid for four years.

Passing the SIE exam alone does not qualify an individual to work in the securities business or be registered with a FINRA member firm. Prospective securities industry professionals must also pass subsequent qualification exams appropriate for the type of business (or businesses) that the individual will be engaged in.

What Does the SIE Exam Consist Of?

The SIE Exam consists of 75 multiple choice questions covering the fundamental concepts of the following four sections:

Knowledge of Capital Markets (12 questions)
Understanding Products and Their Risks (33 questions)
Understanding Trading, Customer Accounts, and Prohibited Activities (23 questions)
Overview of the Regulatory Framework (7 questions)

Test takers are given one hour and 45 minutes to complete the online exam.

A practice SIE test is available here, and further details on the tested concepts are available on this FINRA exam page.

What is FINRA?

SIE Exam - FINRA

FINRA is an American not-for-profit organization dedicated to protecting investors and safeguarding market integrity. FINRA, or the Financial Industry Regulatory Authority, is a government-authorized entity that regulates any brokerage firm doing business with the public in the United States.

FINRA, overseen by the SEC and authorized by the United States Congress, is responsible for writing rules, ensuring and enforcing compliance with FINRA rules and federal securities laws, registering and examining broker-dealer personnel, providing them with education and training, and informing the investing public.

Additionally, FINRA is the industry watchdog, providing surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also manages the Securities Insurance Examination and all other examinations taken by individuals who are looking to work in the securities industry.

Changes in FINRA’s Exam Structure

The FINRA test structure changed significantly with the introduction of the SIE. Now, candidates can take the SIE Exam and then take a Series 6, Series 7, or other “top off” exam appropriate to their prospective job function or industry.

The new exam was also designed not only to eliminate some of the repetition in other exams, such as the Representative-level Series 6, 7, 22, and 57 tests but also to make the process more streamlined by moving general securities knowledge from the top-off exams into the SIE Exam.

Impact of SIE Exam Changes

If you have completed any qualification exam, such as Series 6 and Series 7, you will most likely not need to take the SIE. Also, if you want to add an additional registration, you will also generally not need to take the SIE, only the job function-specific top-off exam. For example, if you are already a registered Series 7 holder and you want to also do investment banking, you need only take the Series 79 qualification exam.

Top Off Exams

In addition to the SIE, in order to become a registered representative at a FINRA member firm, applicants will still need to take a revised Series 6, Series 7, or other top-off qualification exam appropriate to their prospective job functions.

The complete list of qualifications, or top-off, exams are listed here.

Who Needs to Take the Securities Industry Essentials Exam?

Anyone who is interested in a career in the securities industry should take the SIE. There is no requirement for previous work experience or any association with a FINRA member firm to take the SIE, so even students who want to prove they are knowledgeable with basic securities industry information to prospective employers may take the SIE, provided they are 18 years old or older.

What Do I Need to Know Before Taking the SIE Exam?

Concepts and foundations tested for the SIE Exam are based upon the following U.S. federal laws and regulations:

The Securities Act of 1933;
The Securities Exchange Act of 1934;
The Investment Company Act of 1940; and
The Investment Adviser Act of 1940.

FINRA does not provide study materials except for the outline, but there are a number of third-party vendors that offer materials and/or training courses.

What are the SIE Exam Requirements?

The SIE Exam is open to any candidate 18 years old or older. The cost in 2024 is US$80 and you do not need to be a U.S. Citizen to take the exam.

You do not need to be working for or interning at a FINRA member institution to take the SIE Exam. Prospective candidates interested in securities markets also do not need a minimum education level or any previous industry experience.

Enrollment Options

Once enrolled in the SIE Exam, you will have a 120-day window in which the exam must be taken. Candidates can schedule an appointment with Prometric to take their exam at a local test center or delivered online with a remote proctor, provided they have the proper equipment.

What is the Passing Score for the SIE Exam and is There a Waiting Period if I Fail?

The minimum passing score for the SIE Exam is 70%. You must wait at least 30 days for the first and the second failed attempts and 180 days for the third and above.

Series 7 Exam and the SIE Exam

To become a registered representative, you must pass both the SIE Exam and the Series 7. The order in which you pass the exams does not matter as long as you pass both exams.

What are the Benefits of Taking the SIE Exam?

While passing the SIE Exam doesn’t necessarily guarantee you a job in the securities industry, it does provide some advantages in distinguishing yourself from others looking for jobs or internships in the industry.

Additional Resources

Thank you for reading CFI’s guide to the Securities Industry Essentials SIE Exam. To keep advancing your career, the additional CFI resources below will be useful: