If you’re reading this blog, then you’ve probably already taken a securities licensing exam or two. So, it’s on to the Series 63 — the final exam between you and the launch of your new career.
Perhaps you’ve spoken to industry veterans about this exam, and they said, “it’s easy” or “you’ll breeze through it.” But before you take the Series 63 for granted, you should know a few things about it, so you prepare efficiently and pass comfortably.
How Is the Series 63 Different from Other Securities Exams?
The Series 63, 65, and 66 exams belong to the North American Securities Administrators Association (NASAA). The other exams, like the Series 6, 7, and 79, are FINRA exams. Although administered through the Prometric Center by FINRA with the other qualification exams, the Series 63 differs substantially.
The language of the questions on the Series 63 contains more legalese, and different phrases are used to describe critical roles and concepts. For example, you won’t see the term “registered representative” in the Series 63. Instead, a representative of a broker-dealer is called an “agent.” You’ll also need to understand legal exemptions and exceptions that differ slightly by each situation.
Here are several key facts about the Series 63 exam and the topics it covers.
Series 63 Key Facts
|Time Allowed to Complete the Exam||1 hour and 15 minutes|
|Number of Scored Questions||60 (plus 5 experimental, unscored questions)|
|Passing Score||72% (43 of 60 questions correct)|
|Prerequisite||None. Exam can be taken before other qualification exams.|
|Topic||# of Questions||Percent of the Test|
|Regulation of Persons (broker-dealers, agents, investment advisers, and investment adviser representatives||24||40%|
|Regulation of Securities and Issuers||3||5%|
|Remedies and Administrative Provisions||6||10%|
|Communication with Customers and Prospects||12||20%|
|Ethical Practices and Obligations||15||25%|
How Long Does It Take to Study for the Series 63 Exam?
The Series 63 is a relatively short exam, requiring considerably less study time than other licensing tests.
In fact, the study manual can be read cover to cover in just one to two days. Many candidates find they can complete all study tasks and be prepared to test in an average of 20–30 hours.
How Hard Is the Series 63 Exam?
The Series 63 can be challenging because of the short timeframe you have to complete it. The allotted time is 75 minutes, leaving you just over a minute to answer each of the exam’s 60 questions.
The questions also tend to be lengthy, with tricky wording. For example, some questions include double negatives. It’s not uncommon to see wording that begins with “All of the following are not true EXCEPT” or questions that offer “multiple multiples” (i.e., the questions that include choices such as I and II are true; II, III, and IV are true, etc.).
These types of questions are confusing by nature. Therefore, candidates often get them wrong simply because they fail to understand what’s being asked even though they know the material. The best way to get comfortable with the wording and terminology is to study thoroughly and complete plenty of practice questions.
Helpful Tips and Examples for the Series 63 Exam
- Recognize whether questions are asking about state or federal regulations. For instance, you need to know that NASAA is state-level, while the Act of 1933, Act of 1934, and Investment Advisers Act of 1940 are all federal laws. Keep in mind, the laws with years in their names are federal regulations.
- Remember that bigger numbers apply at the federal level. For example, federal recordkeeping requirements are longer, and fines are larger than at the state level.
- Read carefully to determine whether questions are asking about a firm or an individual. Exceptions and numerical requirements within the law differ for firms and individuals. Therefore, consider if the question is referencing an entity or a representative of the entity.
- A number of questions focus on whether an individual must be registered to complete a type of transaction. Know that someone who represents a broker-dealer must always be registered, even if that person sells exempt securities or participates in exempt transactions.
- While the material may mention obscure types of securities, you won’t need to know how to define them or what features they offer investors. Instead, focus on whether they are considered securities under the USA. For example, you should know that an endowment plan is not a security, but you don’t need to define what it is.
Learn more about how to pass the Series 63 exam here.