A registered broker dealer is a financial professional that is registered with the Securities and Exchange Commission, or SEC, to buy and sell investment securities. If you have an interest in a financial services career, becoming a broker dealer helps you achieve that goal. Before you launch your career, federal laws require you to take certain steps to register. Before you can register with the SEC, you first have to pass a Series 7 License Exam that is owned and administered by the Financial Industry Regulatory Authority, or FINRA.
Steps to become a Registered Broker Dealer:
Preparation:
1
Register to take the Series 7 License Exam. If you are an employee of a brokerage firm, the firm may sponsor you to take the exam. If not, you can take the exam through the FINRA. Contact them at finra.org.
2
Contact the SEC at sec.gov to obtain Form BD, which is listed here in the Resource section.
3
Complete Form BD and submit it to the SEC. Form BD requires you to provide your personal contact information and answer questions about your securities transactions.
4
Make a copy of the completed Form. You must file this form with the SEC before you can legally act as a broker dealer.
5
File for membership in a Self Regulatory Organization, or SRO. You also need to submit Form BD to Central Registration Depository, or CRD, which is a division of FINRA. Filing this form is filing for membership in a SRO, which is a requirement of a broker dealer before conducting business.
6
Obtain a U-4 Form, which is the Uniform Application for Broker-Dealer Registration, when you contact the SRO that you wish to apply for membership. Once the form is completed, file it with the SRO.
7
Contact the North American Securities Administrators Association Inc. Call 202-737-0900 or visit nasaa.org to determine the state requirements for being a broker dealer for the state in which you plan to conduct business.
