Series 86/87 Exams

What Are the 86/87 Series Exams?

The Series 86/87 exams are tests that decide the skill of financial research analysts at the section level. The two exams are administered and required by the Financial Industry Regulatory Authority (FINRA) before experts can receive the research analyst assignment. Once got, people can create inside and out reports that investors use when they go with their investment choices.

Applicants must likewise pass the Securities Industry Essentials (SIE) exam too to get the assignment. Experts who breeze through the exam can function as research analysts for [broker-dealers](/agent vendor).

Understanding the Series 86/87 Exams

Financial industry regulation guarantees that investors and other market participants approach a fair market. Experts are limited by ethics and standards that guarantee they have their clients' best interests as a main priority as opposed to the financial gain of their companies or themselves. That is the reason they genuinely should find the suitable ways to become certified in their fields.

The Series 86/87 exams are requirements for experts who need to become research analysts. They make convenient reports on potential investment opportunities that are distributed to sales staff, institutional investors, and other intermediary/vendor clients. These reports are utilized by investors when they go with their investment choices. The individuals who pass the Series 86/87 are permitted to prepare written or electronic communications that investigate equity securities, companies, and industry sectors.

Likewise alluded to as the Research Analyst exam, test takers must have a careful information on company and industry analysis methods, alongside management study. Competitors must likewise comprehend the broad boundaries of supply and demand for a given industry or sector. Up-and-comers must comprehend financial metrics as well as earnings modeling methods and the industry dynamics that underly helpful and accurate financial reports.

Any individual who prepares an analysis of equity securities that might be utilized as the basis for an investment decision is required to register as a research analyst.

Special Considerations

The test is really two exams in one:

• Series 86 (Part I): This exam comprises of 100 numerous decision questions and 10 pretest questions, testing a singular's information on the field. Up-and-comers have four-and-a-half hours to complete the Series 86. A score of 73% or better is required for passing.
• Series 87 section (Part II): This section tests regulatory administration and best practices for the calling. It contains 50 inquiries and five pretest questions, all zeroing in on rules and ethics. Applicants are given one hour and 45 minutes to complete the Series 87. A score of 74% or better is required to pass.

The analysis-centered Series 86 contains the accompanying parts:

• Function 1: Information and Data Collection
• Function 2: Analysis, Modeling, and Valuation

The regulatory and best-rehearses centered Series 87 contains the accompanying parts:

• Function 3: Preparation of Research Reports
• Function 4: Dissemination of Information

There are no points lost for speculating. However, the exams are closed book, and that means test takers can't bring any reference materials.

Series 86/87 Prerequisites and Exemptions

As referenced above, competitors must likewise pass the Securities Industry Essentials (SIE) exam to get their research analyst assignment. This exam is taken by experts who need to work in the securities industry. It tests their essential information about securities, including product types, risk, regulation, and activities that are disallowed.

The people who have previously passed both Level I and Level II of the Chartered Financial Analyst (CFA) Exam, or both Level I and Level II of the Chartered Market Technician (CMT) Certification Examination, may request an exemption from the Series 86 portion as it were. Up-and-comers without a CFA must initially pass one of the accompanying essential tests: Series 7, Series 17, Series 37, or Series 38.

Key Questions

As per FINRA's website, coming up next are key inquiries that competitors can anticipate on the exam:

1. What registration and qualification requirements must supervisors of registered research analysts have?
2. Are sell-side equity analysts required to register as research analysts and pass the Series 86/87?
3. Does NASD 1050 apply to each and every individual who works in equity research or just the people who compose a research report that will be seen by the public?
4. Is a research analyst who is employed by a foreign representative/vendor affiliate of a FINRA member required to register compliant with Rule 1050 assuming the member utilizes that analyst's research reports or disseminates in the U.S. as per SEC Rule 15a-6?

Features

• The Series 86/87 exams are a requirement for any individual who needs to turn into a research analyst.
• The exams are administered by FINRA.
• Series 87 tests information on ethics and best practices for the industry.
• Series 86 tests comprehension of financial metrics, earnings modeling methods, and industry dynamics.