The Series 66, officially titled the Uniform Combined State Law Examination, is a key certification exam for individuals who aim to work as investment adviser representatives and securities salespeople. Administered by the Financial Industry Regulatory Authority (FINRA) and designed by the North American Securities Administrators Association (NASAA), the Series 66 combines elements from the Series 63 (Uniform Securities Agent State Law Examination) and Series 65 (Uniform Investment Adviser Law Examination) to provide a comprehensive assessment of state-level financial regulations.
Key Objectives of Series 66
- Regulatory Compliance: Understanding and adhering to state and federal securities laws and regulations.
- Ethics and Professional Conduct: Ensuring ethical practices and professional conduct in financial advising and securities sales.
- Investment Strategies: Assessing investment strategies and planning for clients’ financial goals.
- Client Facilitation: Effective communication and facilitation of client transactions.
Exam Structure
Eligibility and Requirements
Candidates must:
- Have sponsorship from a FINRA member firm
- Typically also hold the Series 7 (General Securities Representative Exam) when registering for Series 66
Exam Format
- Number of Questions: 100 multiple-choice questions
- Passing Score: 73% (Correctly answer at least 73 out of 100 questions)
- Time Allotted: 150 minutes
Content Breakdown
The Series 66 exam covers four main areas:
- Economic Factors and Business Information: Principles of economics, financial statements, and types of business organizations.
- Investment Vehicle Characteristics: Different types of investments including stocks, bonds, mutual funds, derivatives, and alternative investments.
- Client Investment Recommendations and Strategies: Investment recommendations and strategies tailored to clients’ needs and objectives.
- Laws, Regulations, and Guidelines Including Prohibition on Unethical Business Practices: Federal and state securities acts, anti-fraud provisions, and ethical behavior.
Historical Context
Development
The Series 66 was introduced to streamline the examination process for financial professionals by combining the state law content of Series 63 and the investment adviser regulations of Series 65. This consolidation ensures that professionals are proficient in both securities sales and investment advisory placements under state regulations.
Evolution
Over time, the Series 66 has adapted to reflect changes in state laws and regulatory updates, with frequent revisions to keep the content contemporary and relevant.
Practical Applications
Use in Industry
- Investment Adviser Representatives (IARs)
- Financial Advisors in brokerage firms
- Dual-registered representatives who need to comply with both state and federal securities requirements
Comparative Analysis
Series 66 vs. Series 65
- Series 65 focuses exclusively on state-specific investment adviser laws.
- Series 66 includes both state investment adviser and financial securities regulations, typically requiring concurrent Series 7 licensure.
Series 66 vs. Series 63
- Series 63 addresses state laws applicable to securities agents.
- Series 66 combines Series 63 and Series 65 content, offering a broader certification encompassing both securities agents and investment advisor representatives.
Related Terms
- FINRA: Financial Industry Regulatory Authority, a non-governmental organization regulating member brokerage firms.
- NASAA: North American Securities Administrators Association, responsible for overseeing state-level securities regulations.
- Series 7: General Securities Representative Exam, a prerequisite for Series 66.
FAQs
Is the Series 66 exam difficult?
Can I take the Series 66 without Series 7?
How often is the Series 66 updated?
References
- NASAA. (Year). Uniform Combined State Law Examination (Series 66). [online resource]
- FINRA. (Year). Series 66 Exam Content Outline. [online resource]
- Investopedia. (Year). Series 66 Exam: License to Advise Investors. [online article]
Summary
The Series 66 exam serves as a comprehensive evaluation for professionals seeking to operate as investment adviser representatives or securities salespeople under state regulations. By combining elements from the Series 63 and Series 65 exams, the Series 66 ensures that candidates are well-versed in both the legal and practical aspects of financial advisory and securities transactions. Preparedness and understanding of the relevant content areas, alongside fulfilling the necessary prerequisites, are key to successfully passing the Series 66 and advancing in the financial industry.
