Series 39

DEFINITION of 'Series 39'

A two-hour exam offered by the Financial Industry Regulatory Authority (FINRA) that tests a person's knowledge of how direct participation programs (DPPs) are structured, how to manage registered representatives within a broker/dealer, and the regulatory and fiduciary requirements of the FINRA and the Securities and Exchange Commission (SEC).

The Series 39 exam consists of 95 questions, and a score of 70% or better is required for a passing grade. Qualified individuals can become principals at broker/dealers that deal in or market DPPs, which are typically set up as limited partnerships (LPs). The Series 39 exam is also known as the direct participation program limited registered principal qualification exam.

BREAKING DOWN 'Series 39'

Common examples of DPPs are oil and gas LPs, real estate partnerships and S corporations. They can have immense tax advantages such as flow-through income, meaning that structures are set up as corporations but income flows through to shareholders directly without being taxed.

Note that investors in these securities should be in constant consultation with their tax advisors to ensure that they comply with IRS restrictions and filing requirements.

RELATED TERMS
  1. Direct Participation Program - ...

    A business venture designed to let investors participate directly ...
  2. Double Taxing

    A tax law that causes the same earnings to be subjected to taxation ...
  3. Tax Shelter

    A legal method of minimizing or decreasing an investor's taxable ...
  4. Subchapter S (S Corporation)

    A form of corporation that meets the IRS requirements to be taxed ...
  5. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
  6. Financial Industry Regulatory Authority ...

    A regulatory body created after the merger of the National Association ...
Related Articles
  1. Retirement

    Discover Master Limited Partnerships

    These unique investments provide significant tax advantages.
  2. Insurance

    Tips For Passing The Series 6 Exam

    Find out what you can do during the test to make sure you get a passing score.
  3. Entrepreneurship

    Should You Incorporate Your Business?

    Find out how becoming a corporation can protect and further your finances.
  4. Professionals

    Keeping Up With Your Continuing Education

    Professional maintenance can be a chore. Learn how to streamline the process.
  5. Investing Basics

    How to Become A Self-Taught Financial Expert

    Becoming a self-taught financial expert may not be as daunting of a task as it seems.
  6. FA

    The Basics of The Series 79 Exam

    Passing the Series 79 exam is usually necessary for anyone who wants to work in investment banking.
  7. Investing Basics

    The Top 5 Coding Schools in the U.S.

    Learn about some of the country's premier coding schools offering intensive courses in cutting-edge programming languages, such as JavaScript and Ruby.
  8. Professionals

    What it Takes to be a Financial Analyst

    A financial analyst researches companies and economic conditions to make business, sector and industry recommendations.
  9. Term

    What is the Series 66?

    The Series 66 exam is one of two tests required to register as both a securities agent and an investment advisor.
  10. Your Practice

    Tips for Helping a Junior Advisor Succeed

    Bringing on new partners means helping them get acclimatized and showing them the ropes. These tips help get you started on a successful arrangement.
RELATED FAQS
  1. How does FINRA differ from the SEC?

    With all the financial organizations out there, knowing what they all do can be as complicated as knowing where to invest. ... Read Full Answer >>
  2. Are variable annuities safe?

    As of October 2015, many life insurance companies, and those companies that sell variable annuities, have experienced economic ... Read Full Answer >>
  3. How are variable annuities regulated?

    The sale of a variable annuity is regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory ... Read Full Answer >>
  4. Is a financial advisor required to have a degree?

    Financial advisors are not required to have university degrees. However, they are required to pass certain exams administered ... Read Full Answer >>
  5. Can I use my IRA to pay for my college loans?

    If you are older than 59.5 and have been contributing to your IRA for more than five years, you may withdraw funds to pay ... Read Full Answer >>
  6. Can I use my 401(k) to pay for my college loans?

    If you are over 59.5, or separate from your plan-sponsoring employer after age 55, you are free to use your 401(k) to pay ... Read Full Answer >>
Hot Definitions
  1. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  2. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  3. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  4. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  5. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
Trading Center