Registered representative
Also known as: registered rep, stockbroker
A registered representative is a person licensed through FINRA to sell securities and provide investment recommendations on behalf of a broker-dealer. They must pass qualifying exams, be associated with a member firm, and follow FINRA conduct rules.
A registered representative is an individual who is licensed to transact securities business for a FINRA member firm. Because securities registration attaches to a person only through a sponsoring firm, a registered representative cannot operate independently — the license lives with the broker-dealer that employs them, and it becomes inactive if that association ends.
Becoming a registered representative involves three steps: a member firm files Form U4 on your behalf, you pass the Securities Industry Essentials (SIE) exam, and you pass at least one top-off qualification exam that matches the products you intend to sell. A Series 6 holder can sell mutual funds, variable annuities and variable life insurance, unit investment trusts, and municipal fund securities such as 529 plans, plus closed-end funds only during their initial offering; a Series 7 holder can sell nearly the full range of securities products. Registration is maintained through continuing education and lapses if the representative stays out of the industry beyond the permitted window.
Registered representatives operate under a dense set of conduct rules. They owe customers suitable recommendations, must disclose material facts, cannot guarantee against loss or share in customer profits and losses outside narrow exceptions, and must get their firm's approval before opening an outside brokerage account, engaging in private securities transactions, or taking on outside business activity. Communications with the public, gifts, and political contributions are all separately regulated.
Registered representative rules are heavily tested. The SIE covers who must register and the basic prohibitions; the Series 6 and Series 7 exams go deeper into the day-to-day conduct standards, outside activity approvals, and the U4/U5 registration mechanics. Expect scenario questions asking whether a specific action requires firm approval, written consent, or is prohibited outright.
Key takeaways
- A registered representative is licensed through a FINRA member firm to sell securities and make recommendations.
- Registration requires the SIE plus a top-off exam such as the Series 6 or Series 7, and it must be sponsored by a firm.
- Outside business activities, private securities transactions, and outside brokerage accounts generally require firm approval.
- Representatives may not guarantee customers against loss or share in account profits and losses except under narrow, approved conditions.