Series 63

What It Is:

The Series 63 (formally known as the Uniform Securities Agent State Law Exam) primarily covers a specific state's laws and ethical standards. Some states require brokers to obtain this license before soliciting clients and taking orders.

How It Works/Example:

To obtain a Series 63 license, the applicant must pass the Series 63 exam. The National American Securities Administrators Association (NASAA) administers the test.

The exam consists of 65 multiple-choice questions and is 75-minutes long. Candidates must score at least 70% on the test to pass. Candidates can retake the exam after a prescribed waiting period.

In many states, a broker cannot legally advise clients, solicit transactions, and execute transactions for clients until he or she has passed the Series 63 exam and obtained the corresponding license.

Why It Matters:

black;">The Series 63 exam is an important step in ensuring that brokers are aware of state-level securities laws and the ethical standards expected of them. As such, this requirement benefits investors by requiring some level of uniform knowledge base among brokers.