Obtaining a financial license in the USA is essential for professionals who plan to sell securities or offer financial advice. Various types of licenses exist, largely depending on the industry in which a professional intends to operate.
If you plan to start a business in the USA, follow the guide below offered by our specialists in USA company formation for a better understanding of the financial licenses in the USA and their specific requirements.
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Who issues financial licenses in the USA?
The Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) are the primary organizations that administer most license examinations in the USA. FINRA oversees licensing and requirements, while NASAA focuses on protecting consumers seeking investment or securities advice. Before opening a company in the USA, it is important to understand the roles of both organizations in relation to obtaining a financial license in the USA.
Find support from our company formation specialists in the USA in order to get more information about which authority is suitable for your kind of business.
Who needs to obtain a financial license in the USA?
Several roles within the commodities, securities, and broader financial sectors require one or more financial licenses in the USA. Generally, anyone involved in selling securities must possess a license issued by FINRA. The most common occupations that require a financial license include:
- stock brokers;
- investment advisors;
- financial advisors;
- investment bankers;
- insurance agents;
- financial analysts;
- equity traders;
- retail broker-dealers;
- commodity trading advisers;
- financial services sales agents;
- securities sales representatives.
If you are looking to set up a company in the USA as one of the professionals above, our company formation specialists can offer efficient assistance in this process. Furthermore, our experts provide a wide range of services regarding business all over the country, such as starting a company in Delaware, for example.
Types of financial licenses in the USA
Whether you aim to open a brokerage company in the USA or work as an independent adviser or broker-dealer, obtaining a financial license in the USA is essential. Below you can find some of the most important licenses:
- Series 7: The General Securities Representative exam is a prerequisite certification needed before advancing to higher FINRA exams. Passing this qualifies entry-level candidates for the Series 7 license, allowing them to sell various securities, including municipal funds, corporate bonds, and stocks.
- Series 24: The General Securities Principal exam leads to a Series 24 license, enabling professionals to oversee their firm’s investment banking and securities operations.
- Series 55: The Equity Trader Limited Representative test earns a Series 55 license, suited for those trading equity securities unofficially (over-the-counter). This license is also required for trading activities.
- Series 63: The Uniform Securities Agent State Law exam leads to a Series 63 license, essential for financial professionals wanting to act as securities brokers. Many states mandate this license for certain financial roles.
- Series 65: The Uniform Investment Adviser State Law test grants a Series 65 license, necessary for those looking to be investment advisers, money managers, or professionals managing commission-free funds.
Before setting up a company in the USA, it is important to understand if your profession needs to obtain any kind of the licenses mentioned above in order to activate in the field. Get support and more information from our company formation specialists to make these procedures more efficient and even start a company anywhere in the USA, including opening an LLC company in Delaware.
Requirements to obtain a financial license in the USA
While the specific requirements may vary depending on the type of license, the general process for obtaining a financial license in the USA involves the following steps:
- Pass the Securities Industry Essentials (SIE) Exam: this exam tests your foundational knowledge of the securities industry, covering topics such as: securities products, industry terminology, market structure, and prohibited practices.
- Find a sponsoring FINRA firm or SRO: to take certain exams and qualify for a FINRA license, you need to be sponsored by a FINRA member firm or a self-regulatory organization (SRO).
- Select the right exam for your career path or company in the USA: depending on your career goals, you’ll need to choose the appropriate qualifying exam.
- Register and schedule the exam: after selecting the exam, you must register and schedule your testing date.
- Study for the exam: preparation is key, and it is recommended that you study the relevant material for at least 80 hours.
Obtaining a financial license and then opening a branch in the USA in your field might seem difficult at first, but the process can be very easy and efficient with the assistance of our professionals in company formation in the USA.
Statistics on financial licenses in the USA
As official data from FINRA mentions, financial security in the USA is growing, with some impressive numbers to present:
- In 2023, there were 628,392 registered representatives in FINRA. There was a 7% growth compared to 2022 when there were 620,882 registered representatives in total.
- In 2023, there were 3,298 securities firms registered.
- In 2023, there were 148,718 branch offices opened in the USA.
If you are looking for more information and support regarding obtaining a financial license in the USA, do not hesitate to contact us.