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What are the Types of Securities Licenses

Representatives of the securities are people who sell securities for their clients, sell insurance policies tied to investments, and provide advice on how individuals should invest their money. All securities professionals, whether they work as freelancers or for broker-dealer companies, need to obtain a securities license depending on the type of securities they sell, the financial transactions they conduct, and the financial and investment advice they offer. Securities professionals such as brokers and investment advisers have to pass a qualifying examination for securities licenses from the securities regulator of their respective states. Because these professionals provide securities, commodities, and financial services, they need to be registered under the relevant regulating bodies and must have the pertinent license for their professions.

To understand securities professionals better, we will discuss here the types of securities licenses applicable to them.

Types of Securities Licenses

Series 6

The Series 6 license is administered by the Financial Industry Regulatory Authority (FINRA) and is also known as the limited-investment securities license. You’ll need this license if you want to sell mutual funds, variable annuities, indexed life insurance, and other “packaged” investment products. While this license applies to any securities professional, it is more geared towards insurance professionals. Most life insurance products are grouped with securities, which necessitates a Series 6 licensing for all insurance sales professionals throughout the United States if they want to sell such types of policies.

Series 26

The series 26 license is also known as the Investment Company and Variable Contracts Products Principal license. It is connected to the Series 6 license if you are a securities agent who works as a principal for a broker-dealer company. The keyword here is principal, which is someone who hires, trains, and supervises other agents. A principal can also sell close-ended funds, variable products, and mutual funds.

Series 7

The Series 7 license is a license that is specifically tailored for stockbrokers. The license is administered by FINRA and is also known as the general securities (GS) representative license. Having this license allows you to sell virtually any type of individual security, such as bonds, stocks, options, and other individual fixed-income investments. It also allows you to sell all forms of packaged products except for products that require a life insurance license to sell. The license gives a boost to the securities you can sell, except for commodities futures, real estate, and life insurance, which a Series 7 licensee cannot sell.

Series 24

Like Series 26, the Series 24 license is needed if you take on the role of a principal for stockbrokers and Series 7-licensed representatives. Aside from training and supervising the representatives, you are also authorized to cover areas on corporate securities, customer accounts, and real estate investment trusts.

Series 3

The Series 3 license allows you to sell commodity futures contracts. Commodity futures contracts are highly risky, and agents who hold the Series 3 license specialize in commodities and often do not sell other types of investment opportunities.

Series 31

The Series 31 license is an optional license that brokers may take if they want to sell managed futures or supervise such activities. It also provides certification if you want to receive trailing commissions on commodity pools, commodity limited partnerships, or managed accounts, as advised by the Commodity Trading Advisors (CTA).

Series 63

The Series 63 is also known as the Uniform Securities Agent license and is administered by the North American Securities Administrators Association (NASAA). If you have a Series 6 or Series 7 license, you also need a Series 63 license as it is required by each state for you to be authorized to conduct business within the state. Whether you are a stockbroker or a securities agent who wants to sell mutual funds, most states will require you to have this license and follow state securities rules and regulations that prohibit dishonest and unethical practices concerning trust funds. However, Series 63 is not required in the District of Columbia, Maryland, Florida, Ohio, Louisiana, Colorado, and Puerto Rico.

Series 65

The Series 65 license is another NASAA-administered license primarily for financial planners or advisors who provide their services on an hourly fee basis rather than commission-based. Also, stockbrokers and other financial representatives that deal with managed-money accounts need a Series 65 license.

Series 66

The Series 66 is a certification developed by NASAA to further qualify individuals as investment advisors or securities agents. Since the Series 66 exam is a combination of Series 63 and 65 exams, you can choose to have this license instead of earning Series 63 and Series 65 licenses separately.

Types of Securities Licenses

There are different types of securities licenses you need to have depending on the scope of your responsibilities as a securities professional. The different states also have varying requirements regarding securities licenses, and you need to know them to properly conduct transactions. With the proper licenses, you can conduct businesses with confidence, and your clients will trust you with their investments.

 

 

South Florida Caribbean News

The SFLCN.com Team provides news and information for the Caribbean-American community in South Florida and beyond.

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