Broker – Dealer Registration

Although Securities Exam Preparation, Inc. is a consulting organization specializing in self-study test preparation for FINRA, NASAA, and futures industry exams we are often asked what the steps are and do we assist in the application process of forming a Broker-Dealer. Over the years “SEP” has found and learned from our customers various firms that can assist in forming a Broker-Dealer and through that process we pass the information on to our students. Below are some of the reasons to use a consultant.

The use of a professional consultant oftentimes allows you to complete the FINRA Broker-Dealer process in an efficient way.

Registration as a “B-D” oftentimes takes 90 to 180 days – depending on whether necessary exams have been completed and the firm is adequately capitalized. Paperwork is filed with Financial Industry Regulatory Authority (“FINRA”), the Securities and Exchange Commission (“SEC”), and each state in which the firm conducts its business.

Here are some of the reasons to use a Professional Consultant:

PRIOR to filing an application you must consider:

  • What type of entity will the firm choose to be?
    • Corporation, Partnership, LLC?
  • What type of broker-dealer operation will the firm be?
    • Full-service Broker Dealer with all general securities?
    • Limited Broker Dealer selling:
      • mutual funds — limited partnerships — corporate securities?
  • Will the firm maintain a “clearing” or “fully disclosed” agreement with another firm?
    • Which firm?
  • What types of securities registrations will the broker-dealer personnel be required to maintain?
  • Will the firm be required to employ a Financial and Operations Principal?
  • What are the minimum net capital requirements?

…And many other strategic decisions…

Some of the key steps in setting up a B/D are:

  • Receive, complete, and send your application to FINRA
  • Have your application assigned to an examiner in the FINRA District Office
  • Provide additional support to the examiner
  • Create a Business Plan
  • Pass the appropriate FINRA exams. These generally include:
    • Series  7 Exam — General Securities Representative
    • Series 24 Exam — General Securities Registered Principal
    • Series 27 Exam — Financial Operations Principal
    • Series 63 Exam — Uniform State Laws
  • Attend a Pre-Membership Interview (“PMI”)
  • Respond to a Voluntary Restriction Letter
  • Director Review
  • District Conduct Committee Review
  • File with State Securities Commissioners

Make sure your application moves as swiftly and easily as possible through the registration process.

Refer to our Resources page for helpful links.