Broker-Dealer Licensing—Understanding the Role and Limitations of the Series 6 License

摘要

Broker registration is the "keystone" of broker-dealer regulation.1 The registration requirements are designed to ensure that "securities are [only] sold by a salesman who understands and appreciates both the nature of the securities he sells and his responsibilities to the investor to whom he sells."2 Despite the importance of registration, it is a subject that causes confusion among investors and even some financial advisors. Further, the securities law surrounding broker registration is confusing and in some ways contradictory. Brokers are only permitted to conduct business and sell securities covered by the licenses the broker maintains. This article explores the conflicts in the licensing system, and whether or not the system achieves its primary goal—to instill public confidence that brokers are properly trained and qualified to recommend securities to investors.