Pass Perfect News

SIE Update - Implementation Postponed Until 4Q 2018 At The Earliest

In response to comments received, the SEC has delayed implementation of the SIE - Securities Industry Essentials - exam and related Top Off exams until the 4th quarter of 2018 (at the earliest). All of the FINRA exams stay in the current format until then.

There has been much hoopla about the SIE on other securities exam preparation firms' websites, giving "information" about an exam that does not exist. Some of these websites give valid information, while others are trying to get lists of potential buyers of training material for the SIE. Note that "training materials" offered for the SIE by other vendors are useless since there is no exam that can be taken for at least 1 year. Also note that because the actual study outline has not been published by FINRA, any content included is pure speculation.

The bottom line is: "Do not be fooled by these." All FINRA licensing exams remain unchanged for a minimum of 1 year, and probably will remain the same through the end of 2018.

"T+2" - What Changes In The Securities Licensing Exams

Effective the business day after Labor Day, September 5th, 2017, regular way settlement for corporate and municipal securities trades moves from 3 business days down to 2 business days. For example, a trade that takes place on Monday, September 18th, 2017 will now settle on Wednesday, September 20th (instead of September 21st). Thus, regular way settlement becomes "T+2" - Trade Date + 2 Days, instead of the previous T+3.

This change does NOT affect regular way settlement for U.S. Government securities trades, which remains T+1, nor does it affect settlement of trades of listed options, which also remain T+1.

This change affects many different aspects of the securities licensing exams. These include:

  • Ex Dates for Cash Dividends: Become 1 business day prior to record date; as compared to the previous 2 business days prior to record date.
  • Computation of Accrued Interest on Bonds: Interest accrues up to, but does not include, settlement date. With settlement being 1 day shorter, the accrued interest computation reflects the shorter time period.
  • Exercise Settlement of Listed Stock Options: If a stock option is exercised (as opposed to traded), the underlying stock is being delivered in a regular way trade. Exercise settlement becomes 2 business days instead of 3 business days.
  • Collection of Funds Under Regulation T: Regulation T requires that funds for a purchase be collected "promptly" but no later than "S+2." Since regular way settlement is now 2 business days rather than 3 business days, the latest time to collect payment for a purchase is 4 business days ("S+2") as compared to the previous 5 business days.
  • Regulation SHO Mandatory Buy In Rules (Principals Exams Only): Regulation SHO Rule 204 requires that if a security is sold short and then is not delivered on settlement, mandatory buy-in occurs the morning of T+4. This now becomes T+3 (the same as the morning after settlement date). Rule 204 also requires that if a security is sold long and then is not delivered on settlement, mandatory buy-in occurs the morning of T+6. This now becomes T+5.

Note that with a major rule change such as this one, FINRA typically "turns off" the affected questions for 90 days after the change and then reintroduces them with the changed information. However, these changed questions could still show up as "trial questions" so that they can be validated by FINRA to ensure that no errors have been introduced from the changes that have been made.

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The Truth About SIE - Securities Industry Essentials Exam

There has been a lot of hoopla and hype about the SIE - Securities Industry Essentials exam - that FINRA is putting together. Here are the key facts:

  1. There are NO changes to the FINRA exams until at least March 2018 - which is at least a year from now.
  2. The "idea" is to have a "General Knowledge" exam of information that is common to all FINRA tests and then a "Top Off" exam of information that pertains to that securities license. FINRA will use the same question pools that it has now and recategorize the questions for use in these tests.
  3. The SIE will be a 75-question "basics" test covering securities products and industry regulations. FINRA will not release the final study outline for this test until July 2017. From the release date of the study outline, it will be 9 months before the SIE and "Top Off" exams are introduced.
  4. Anyone can take the SIE without being sponsored by a member firm. The individual then has up to 4 years to complete a "Top Off" registered representative exam for a securities industry license.
  5. To take the "Top Off" exam, that individual must be sponsored by a member firm and must complete a U-4, fingerprinting and a background check - the same as required for the current exams.
    • The Series 7 "Top Off" exam will be 125 questions;
    • The Series 6 "Top Off" exam will be 50 questions;
    • The Series 57, 82, and 99 "Top Off" exams will also be 50 questions.
  6. Both the SIE and the appropriate "Top Off" can be taken on the same day.
  7. An individual is not licensed until both tests are passed.
  8. These changes do not affect NASAA state exams - Series 63, 65 and 66; they also do not affect the FINRA Principals exams.

The bottom line is that everything STAYS THE SAME for at least 1 year. The SIE will not be administered until, at the earliest, March of 2018, and it will probably start later than this. When FINRA "pushes the button" and introduces the revised exam format, be assured that PassPerfect will be ready with SMART SIE and SMART Top Off courseware.

Anyone who buys our courseware intending to take the test before the change, and who, for whatever reason, does not take or pass the test prior to the change, will be provided with the courseware for BOTH the SIE and appropriate "Top Off" exam free of charge.

About Pass Perfect

Pass Perfect is a leading developer of targeted, effective training programs for Series 7 and other FINRA and NASAA securities licensing exams.

Our level of experience and expertise is unmatched. Over the last 30 years we have successfully trained over 1,000,000 individuals for these exams.

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