The New SIE Exam

With the new Securities Industry Essentials Exam beginning October 1st, I thought I would mention a few crucial facts. Remember, which exam you take essentially depends on the date in which your test window is opened.

1. If your exam window is opened prior to October 1, 2018 -

If your exam window is open before October 1, 2018 then you will sit for the current version of the registration series exam and you will not have to sit for the SIE.

2. If you fail the current version of the exam and, after the 30-day waiting period, your next enrollment window starts on or after October 1, 2018?

You would have to take the SIE and the revised representative-level series exams.

Note: You would be eligible to take the SIE and qualifications exams on October 1, 2018, regardless of the waiting period because they are different exams.

3. If you want to take the Series 7 exam for the first time in its current 250-question format, the last date I can request the exam via the Form U4 process?

The last date you can request the Series 7 exam in its current format is September 29, 2018. If you make a request on this date, you will be taking the exam on or after October 1, 2018. However, you will still be taking the Series 7 exam in its 250-question format. If you pass the exam, you will receive credit for the SIE. If you fail the exam and want to retest, you will be taking the SIE and the revised Series 7 exam.

Also, though FINRA has posted a content outline for the new SIE, the actual testable content is difficult to determine until there is good, reliable feedback. We will be creating a new video course for the SIE but I'm sure it will have to be revised until we can feel confident that the content relates well to the exam.



SEC Settlement Changes



Important Update –

The SEC has instituted a mandatory change in settlement from 3 business days (T+3) to 2 days (T+2) effective September 5th, 2017.

Series 6 Exam –

For the Series 6 exam, the only effect will be the FRB’s mandatory payment requirement (Reg. T) and the relationship between the ex-dividend date and the record date on individual stock trades.

Series 7 Exam –

For the Series 7 exam, several areas of the exam will be affected: the FRB’s mandatory payment requirement (Reg. T); the relationship between the ex-dividend date and the record date on individual stock trades and accrued interest calculations on bonds. This will have no effect on mutual fund transactions or Government securities.

Payment for securities transactions will now be T+2+2. In other words, payment is now required no later than the 4th business day rather than the 5th business day (Notice, however, it remains 2 business days after the settlement date).

For dividends, the ex-dividend date will now be 1 business day prior to the record date.


   Trade                         Settlement            FRB (Reg. T)

Record Date – The date in which you must be shareholder of record in order to receive the dividend. Since settlement (transfer of ownership) is 2 business days, you must purchase the stock at least 2 business days prior to the record date in order to receive the dividend. If you purchase it only 1 day prior, you will be too late (ex-dividend date).

                                    Ex-div. Date


                    Trade                         Record Date

Accrued Interest – Interest accrues on all bonds up to the day before settlement. For corporate and municipal bonds, this will now be the day after the trade date. For example, if an investor sells their bond on Friday April 15th, they will receive accrued interest up to Monday April 18th since the settlement date is Tuesday April 19th (Remember, settlement does not include weekends. Accrued interest, however, does).

For Government bonds, there is no change in settlement (T+1) and, therefore no change in accrued interest calculations. The interest accrues up to the day before the settlement date which, of course, is the trade date.

If you have any questions, please feel free to contact me at:

What Are Your Options?

When you are taking your FINRA Series 7 exam, options typically are number one on the anxiety list. As an instructor, I have , as well, stressed over "Options Day". It is what my wife and I facetiously refer to as "Herding Cats Day". 

Lets try this to help reduce some of the anxiety - I believe you can think of options in just a few categories; rather then the 4,582 random facts that you have been performing your mental gymnastics on. Here is how I think of the options content on the test:

1. Option strategies - Individual options, hedges, straddles and spreads

2. Non-equity options

3. Administrative and Compliance

Now I have just three "zip files' in my random access memory (also known as my brain). I can then easily associate certain key facts when expanding each zip file if called upon in a test question. I have created a cheat sheet which corresonds to each option strategy that allows me easy reference to answer any question. My students, with a nearly 80% average pass rate on options, and I have, for years, refered to our cheat sheet as "Jane Fonda's Option Aerobics Reference Guide" ( humor and silliness helps reduce anxiety!).

Our cheat sheet has reduced 67 pages of text down to two!  So if you're getting tired of the mental gymnastics - KEEP IT SIMPLE. Think of options as a few rather then many. It's all about passing the first time and getting your life back!

If you're interested, you can find our Options Video Course for FREE as well as the entire Series 7 Video Course ($99) at:

Soft Launch Series 7 Video Course

I first started the Securities Licensing classes in Portland, Or. and Seattle, Wa. back in 1995 for Dearborn Financial (later Kaplan Financial). I scheduled, marketed and taught all the classes for Dearborn/Kaplan. I started with less then 5 students in each class back in the early days. Over 20 years later, now independent, I am really excited about where we are going with our new courses!

I would like to announce the soft launch of our Series 7 Video Course! For over 20 years, I have tried to present the Series 7 content in a way that everyone can understand. Now, with our video course, I have re-created my entire live class by putting the concepts into a context that make the Series 7 material easier to understand and retain. As always, I am right there with you every step of the way as we visually present all of the tricky material  of the Series 7.

Along with the video course, I've have included a comprehensive study guide of all of the testable content, as well as, one of the best Practice Finals I've ever written. Combined, I believe I have created a video course that feels as if you are in a live class!

We know! We've read those textbooks as well and know how difficult it is to digest all of that material. We sincerely hope, with our video course, we can help you get your life back by passing the Series 7 the first time.

Pretty Girls Drive Mercedes

For those of us who took our Series 7 exam years ago, you may recall the endless options and municipal bond questions we got on the exam. Well, in November of 2011, FINRA re-formatted the exam and reduced the number of questions on these two topics roughly in half. The municipal bond topic now contain very few questions concerning the issuance or underwriting of these bonds. However, for whatever reason, the textbooks (ugh!) and practice questions still contains a lot of this, now, useless information. The only concepts pertaining to underwriting of municipal bonds that is still being tested are as follows:

Legal Opinion

Official Statement

Order Priority - Pre-sale orders, Group net orders, Designated orders, Member orders (P,G,D,M - Pretty Girls Drive Mercedes)

As always, I remind folks when taking a standardized, multiple choice exam - K.I.S.S. "Stay with what you know. You take the test, don't let the test take you" (For all of my past students - "watch out for creepy dudes in white vans")


Test Taking 101

Over the last several years, I have spent my time trying to figure out why the NASAA Series 65 and 66 exams have lower pass rates then the FINRA Series 6 and 7 exams. I believe, anecdotally, the answer choices on the 65 and 66 seem to be more subjective thus leading to lower scores. To me, subjective questions and answers undermine the linear nature of standardized testing. Take for example the following:

An investor that does not take into consideration whether a stock is undervalued or overvalued would be described as

A. Active

B. Strategic

C. Indexing

D. Contrarian

If you were to look this topic up in the different textbooks, you would see the concept of undervalued/overvalued are not even associated with any of these answer choices and therefore, the test taker is left with making a subjective choice, marking the question for review, and then coming back to it several times, possibly changing their answer.

I believe this type of question would most likely be found in the middle of the distribution curve - those questions that would have the highest difficulty and lowest success rate.

I have always told my students to focus on the easiest questions. Those on the outer portion of the distribution curve. These are the questions you need to be most diligent with and score the highest on rather than the middle portion of the curve that contains the most difficult questions. However, under the stress and pressure of test taking, this is just too counter-intuitive for most people. They have to spend more time on the challenging questions. They have to buckle down!

Remember, it is a numbers game! If you can get 80% on the outer portions and a 60% on the middle portion of the curve you pass! Let me repeat this - YOU PASS!

I have quite a few friends that are far more intellectually gifted than I.  All they have to do is sniff a textbook and get a 90%. I have, on the other hand, had to work a lot harder to pass. The good news is - I have always passed! I have never failed a standardized exam. I truly believe that if YOU take the test rather than letting the TEST take you, you will find a much better success rate.

How To Pass Your FINRA/NASAA Exams

When I was first hired by a small, start-up Broker/Dealer in Portland, Or. in 1992, the boss said to me, " Welcome to the team. Here, read this, take a test ". I said, "okay". He handed me a 700 page text book- the Series 7 text book and I read the thing cover to cover - 3 times! I actually wrote notes on each chapter the third time through. I had no practice questions, no practice final exams. I believe, to this day, that the only thing that got me through that exam was writing all of those notes.

Today, of course, there are a lot of resources and tools to help get us through all of our exams. One of the best tools I've seen come down the pike over the years is the electronic calendar that most publishers offer. A very nice tool to help the busy professional with the time management demands these exams extoll. There are online practice questions and Final Exams, as well as video libraries to help us with the tremendous volume of information these tests cover.

One of the most common questions I get from students is how best to study for their exams. This is usually the "recipe" I recommend to best understand and retain the information necessary to pass their exams:

STEP 1. Instead of trying to tackle the entire textbook from cover to cover, take it chapter by chapter with practice questions after each chapter to help retain the concepts and practice your test-taking techniques. For example: Read Chapter 1, then do 20 questions from your online practice questions (You can also, if available, enhance your reading with a video on the specific chapter). Next, read chapter 2, then do 20 questions from the online practice questions, then do 20 questions from Chapters 1 & 2. Next, read chapter 3, do 20 questions on the chapter, then 25 questions on Chapters 1, 2 & 3. Next, read chapter 4, do 20 online practice questions, then do 30 questions on chapters 1, 2, 3 & 4. GET THE IDEA! This, I truly believe, is the best way to obtain, retain and reinforce the necessary information. WARNING! I find that many students try hundred if not thousands of practice questions when they are studying for their exams. This can sometimes dilute the core content that you need to retain for the test. I believe in being over prepared as opposed to under prepared but some of these publishers add content questions that WILL NEVER show up on their exam!

STEP 2: Use exam supplements/create cheat sheets. These help us retain key facts we KNOW will show up on the test, i.e. interest rates, options, state laws.

STEP 3: Take a class in your area if possible. The classes are designed to focus specifically on the test content. Hopefully, if its a good class, they will show you the subtle differences between the text material and the real test. THEY DO DIFFER.

STEP 4:  Take Practice Final Exams so that you can simulate the test-taking experience prior to your test. I like at least 4 Practice Finals to give you a good average score. Also, many of these exams provide diagnostic breakdown of your scores to fill in any remaining holes you may have. Depending on which exam you are taking you would ideally want to score at least in the 70's if not higher. Most practice exams are designed to get you within 5% of your real score.

STEP 5: Pass your exam!

I truly believe if you systematically study the material, it will give you your best chance at success. Boy, I still remember sitting in that library, day after day reading that damn textbook. Chapter after chapter, after chapter, after chapter.......