Let's See Those Credentials

For the thousands of reps who have found themselves unemployed since industry employment peaked in 2000, the matter of retaining one's license to sell securities is a potential issue. Even those who have new jobs albeit with different responsibilities might run into trouble keeping their licenses valid. According to the Bureau of Labor Statistics, broker employment has dropped 13 percent in the last

For the thousands of reps who have found themselves unemployed since industry employment peaked in 2000, the matter of retaining one's license to sell securities is a potential issue. Even those who have new jobs — albeit with different responsibilities — might run into trouble keeping their licenses valid. According to the Bureau of Labor Statistics, broker employment has dropped 13 percent in the last two years.

At first blush, the requirements set forth by the NASD are cut-and-dried: If your status with a NASD-member firm is active, you're good to go. Upon termination, licenses remain valid for two years. If a rep doesn't find another full-time job with a broker/dealer firm to sponsor him, then he must retake the Series 7 exam, as well as state licensing exams like the Series 63.

But what of the following, from one broker: “I heard you could do a trade two times a year and still keep your license.” Well, no, you can't. That's called “parking,” and it's not kosher. There are no standard penalties, but the firm allowing it faces sanctions and fines. The broker also faces regulatory action. (There's one exception: In January 2002, the NASD created a special “inactive” category for reps serving in the armed forces.)

Even a full-time job doesn't mean all your licenses are active. Marianne Czernin, head of the broker/dealer division at National Regulatory Services, a consulting firm in Lakeville, Conn., points out some reps may no longer actively use a particular license at a new firm. “If I have a Series 52 for munis, and I go to another firm that sells mutual funds and variable annuities for two years, then that 52 is parked,” says Czernin.

TAGS: Archive
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish