There are certain qualifications that you must seek before becoming a broker dealer. Broker dealers cannot simply gain experience and apply for jobs within the industry. Rather, they first need to pass a series of broker dealer exams, with different exams offering different abilities and qualifications.
One such exam is the series 82 exam. As with all other broker dealer exams, this can’t be attained without a broker dealer sponsorship. This is acquired through employment by a FINRA member securities firm. With that being said, let’s explore how to obtain series 82 sponsorship and what this particular license might entail.
What Should I Do to Register For a Series 82 Exam?
Firstly, you must become employed at an organization or firm capable of offering a series 82 sponsorship. It’s recommended that you research these organizations and firms ahead of time to make sure that they’ve offered such sponsorships in the past. You should also make your desires for a sponsorship clear in your cover letter and resume. Following your hiring, you’ll probably be subjected to a brief observation period, after which your employer may grant you a sponsorship.
Your sponsor will then file an application for a series 82 exam on your behalf. This will be done through FINRA’s Central Registration Depository. During this time, you will need to be fingerprinted and answer a number of questions covering your background.
What Should I Do to Prepare for the Exam?
Preparation for the series 82 exam is key. You should plan on studying for about 60 to 80 hours over a period covering four weeks. The more that you study, the more likely you will be to pass the exam; however, you should stretch out your studying over a reasonable period. The exam requires a score of 70% or above in order for you to pass and obtain your license. Keep in mind that your score will be rounded down to the lowest whole number. Therefore, you cannot count on a nearly-passing score in order to pass your exam.
You should expect the exam to be fairly lengthy, made up of 55 questions. A total of 50 questions will be scored, while five will be unscored. You will have 90 minutes to finish the exam. There are plenty of practice exams you can take, which will help you know what to expect.
What Can I Do After Taking the Exam?
After obtaining series 82 sponsorship and passing the exam, you will be qualified to obtain your license as a broker dealer. Once you have this license, you will be able to sell private placement offerings as part of a primary offering. You still will not be able to sell public offerings or municipal or government securities, but it will be easier for you to move up the ladder at your current place of employment or a new place of employment. Most jobs in the investment banking industry are depending on the level of your license.
If you would then like to sell securities issued by direct participation programs, or DPPs, you should follow up your series 82 exam with the series 22 exam.
What Do I Need to Take Before the Series 82 Exam?
Just as you should take the series 22 exam after you take the series 82 exam if you’d like to sell securities issued by DPPs, you must take a different exam before the series 82 exam. The Security Industries Essential exam, or SIE, is required first — unless you have passed other FINRA licensing exams like the series 7 or 79 exam prior to October 1, 2018.
With the median size of an IPO deal in the United States being worth $108 million, there is much to gain from earning a series 82 license and becoming a fully certified broker dealer. It’s important to note, however, that if you leave your employer that offered you series 82 sponsorship, you will have just two years to find an equivalent job in the industry. Otherwise, your license will expire. You will have worked hard for that license; make sure that you maintain it!