NASD Series 7 Stock Broker License

The NASD has long been the road to becoming a stock broker. For decades anyone who has wanted to be a stock broker has had to pass the Series 7 Exam, provided by the NASD.

The Series 7 is a six hour test, broken up into two three hour segments. Each segment has 150 questions, for a total of 300 questions. The test is administered in a NASD, or NASD sanctioned facility. The exam is totally computerized, you may not have any books or any written material with you during the test. You may have scratch paper and pencils only. The test is multiple choice, with four choices for each question. During the exam, monitors walk around to make sure no one is cheating on the test.

The Series 7 exam is a pass/fail test. There is no tiered grading structure as in high school or college. The passing grade is 70 percent, which means the person pursuing the license must answer 210 questions correctly. The results are produced immediately upon completion of the exam.

To take the test a person must be sponsored by an NASD broker dealer firm. There are roughly 6,000 firms across the country. One of them must apply for the individual wishing to take the exam. This means that the individual must be pre-qualified to the extent that the NASD sponsoring firm has hired the person. Before the exam, the person who will take the test must also have their fingerprints taken by a qualified individual (usually the local police department will perform this duty) and submitted along with the test materials.

Once the test is finished the person taking the examination is offered two choices. The first is the obvious, to calculate the final score of the exam which will inform the applicant if they will be licensed with a passing grade or if they have failed the test. The second choice, which is far less utilized, is to delete the information of the entire event. That is, they can choose to delete the record of ever taking the test. Obviously, they will not pass the test, but if a person taking the test knew they had failed, then they have the opportunity for it not to be on the record.

The NASD Series 7 test is 300 questions (given over a six hour timeframe) encompassing the world of securities, ranging from stock options, dividends, trading rules, exchanges, bonds, yields on debt products, collateralized securities, and other stock related topics.