Not sure if you were around in '99, but I was, and I remember when they passed the Series 7 rule. At the time everyone and their mother started daytrading, I mean some serious losers, and thousands of people that had no clue of what they were doing were walking into firms that gave leverage (there were a ton of them back then) and smoking their whole savings/retirement in weeks.
Most firms were not doing any due diligence at all on the people they would let trade, and it was causing a major risk to stupid people's money. And as we know of the government, they always step in when stupid people lose money, such as all the subprime idiots buying mansions that our tax dollars are bailing out.
So they came in and said if you want leverage on your money, take this test: A - to prove you are not completely an idiot, and B - so you have to work for it a little to get 'professional' trader leverage. Prove that you are worthy of it and will jump a hoop to get it.
I am really glad they did it, the quality of the professional trader went way up after that and I think it did keep a lot of idiots out of the game that should never get in the game in the first place anyways.
Think back to '99, daytrading was all over the news, everyone was talking about it, quitting their jobs to try it, and most people getting smoked very quickly on it. And there were a lot of smaller/newer firms that were bankrupting and taking the account holders' funds with them. The Series 7 was the best fix they could come up with quickly to make trading somewhat exclusive again and I think it worked great.
I'll bet if Don chimes in on this he'll agree that it really only keeps out the riff-raff and the general quality of the traders now is higher since that rule was enacted.
It kills me how some people think having to take that test is the worst thing in the world, it's really quite an easy test if you read the book. And you learn some great things along the way.
