Significance

• A stockbroker must take and pass the General Securities Registered Representative Examination. This is called the Series 7 Exam. Many states also require the Uniform Securities Agents State Law Examination.
  
  

Considerations

• If a stockbroker does not work as a stockbroker during a two-year time period, the license becomes inactive and the broker must retake the Series 7 exam and other exams. A stockbroker cannot conduct business with an expired license.
  
  

Continuing Education

• Every three years, Series 7 representatives (stockbrokers) must take and complete a continuing education course at a testing center. Failure to do so can result in a license suspension until the broker completes the course.
  
  

Effects

• If a stockbroker's license is suspended, it has a dramatic impact on his business, clients and paycheck. He cannot legally service clients, offer advice, enter trades and/or maintain customer accounts.
  
  

Warning

• Some firms may permanently dismiss or temporarily suspend an employee (stockbroker) with a suspended license. A license can also be suspended due to pending customer complaints, improper practices, investigations or or other legal matters.
  
  

Expert Insight

• FINRA, the Financial Industry Regulatory Authority, oversees close to 4,750 brokerage firms. Its website allows individuals to find a broker by name; verify if a broker is licensed and current; and review any complaints.