Series 7 study guide
Series 7 · Work through your exam, one topic at a time.
The Series 7 - formally the General Securities Representative Qualification Examination (GS) - measures whether an entry-level registered representative possesses the knowledge needed to perform the critical functions of the job. It covers sales of corporate securities, municipal securities, investment company securities, variable annuities, direct participation programs, options and government securities, and passing it qualifies a representative for a broad product set ranging from stocks and bonds to mutual funds, ETFs, REITs, UITs, government securities and hedge funds. The Series 7 study guide has 4 sections and about 1,785 words.
01Seeking Business: Prospecting and Communications with the Public
A rep builds business through cold calls, seminars, mailings, email, social media and referrals, and nearly every one of those is a communication with the public under FINRA Rule 2210. The rule sorts communications by audience: correspondence (written or electronic messages to 25 or fewer retail investors in any 30-day period), retail communications (more than 25 retail investors in 30 days), and institutional communications .
356 words, about 2 min02Opening Accounts: Financial Profile, Objectives and Suitability
Account opening begins with identity: the Customer Identification Program (Patriot Act) requires name, date of birth, address and an identification number, verified within a reasonable time. Then comes the substance - FINRA Rule 2090 (know your customer) and Rule 2111 (suitability), plus Reg BI's care obligation for retail customers.
368 words, about 2 min03Provides Customers with Information about Investments, Makes Recommendations, Transfers Assets and Maintains Appropriate Records
Before recommending, a rep must know what the investment pays, what can go wrong, and what it costs. For equities: earnings, P/E versus peers, dividends, share classes.
700 words, about 4 min04Handling Instructions, Executing and Confirming Transactions
Orders arrive as market, limit, stop, or stop-limit, with time-in-force qualifiers (day, GTC, IOC, FOK) and size qualifiers (AON). Positioning is the trap: buy limits below the market, sell limits above it; buy stops above the market, sell stops below it.
361 words, about 2 min