What Is Series 79?

The Series 79 exam, known fully as the Investment Banking Representative Qualification Examination (IB), is an examination to determine whether a registered representative is qualified to become an investment banker. The exam is administered by the Financial Industry Regulatory Authority (FINRA) and assesses the competency of those looking for positions in investment banking by determining whether they have adequate knowledge of mergers & acquisitions, buyouts, financial restructuring, public investment banking and refinancing, among other areas. Those looking to take the exam must be sponsored by a FINRA member firm.

Key Takeaways

  • Series 79 is an exam taken to determine whether a representative is qualified to become an investment banker.
  • The exam has 175 questions and they focus on data, underwriting and new financing transactions, restructuring, mergers and acquisitions, and general security industry rules, among other topics.
  • Passing the exam means a candidate can participate in the transaction of debt and equity offerings, mergers & acquisitions, asset sales, and other investment banking activities.

Understanding Series 79

The Series 79 exam is intended for a registered representative whose financial industry skills are more specific than those of a person taking the broader Series 7 exam. New rules were enacted in 2009 to better prepare individuals specifically for investment banking activities or supervision of these activities.

Stockbrokers in the United States have to pass the broader Series 7 exam if they want a license to trade; a Series 7 license allows for the trading of all securities except commodities and futures.

Series 79 Focus

The exam includes 175 questions and focuses on four different function areas. The number of questions in each section in parentheses:
1. Collection, Analysis, and Evaluation of Data (75)
2. Underwriting/New Financing Transactions, Types of Offerings and Registration Of Securities (43)
3. Merger and Acquisitions, Tender Offers and Financial Restructuring Transactions (34)
4. General Securities Industry Regulations (23)

Series 79 Prerequisites

While a candidate must be sponsored by a FINRA member firm, there is no prerequisite exam.

The exam is given by the Financial Industry Regulatory Authority (FINRA) and a candidate has to be sponsored by a FINRA member firm.

Series 79 Permitted Activities

Those who pass the Series 79 can engage in the following activities:

-Debt and Equity offerings, including private placements and public offerings.
-Mergers and acquisitions
-Tender offers
-Financial restructurings
-Asset sales
-Divestitures or other corporate reorganizations
-Business combinations transactions

Series 79 Sample Questions

1. I engage in investment banking work that is limited to structuring private securities offerings at my firm. What registration(s) will I need to engage in this activity?

You may register as either an Investment Banking Representative (IB) by passing the Series 79 Exam or as a Private Securities Offerings Representative (PR) by passing the Series 82 Exam.

2. My firm’s business is limited to both structuring and selling private securities offerings. What registration(s) will I need to engage in both types of activities?

You have two registration options for engaging in these activities: (a) register as a Private Securities Offerings Representative (Series 82) or (b) register as an Investment Banking Representative (Series 79) and either as a General Securities Representative (Series 7) or a Corporate Securities Representative (Series 62).

3. I am registered as an Investment Banking Representative (Series 79) under NASD Rule 1032(i) Limited Representative-Investment Banking. The rule states that persons whose activities involve “advising on or facilitating debt or equity securities offerings through a private placement or a public offering, including…marketing….” must register as an Investment Banking Representative. Does this mean that I can engage in roadshow activities and direct selling efforts related to a debt or equities securities offering without obtaining any additional registrations?

The Investment Banking Representative registration category is meant to include investment bankers, who as part of their job activities, advise on or facilitate the marketing of an offering. This would include activities such as preparing a marketing plan, advising on a marketing plan prepared by a sales team or developing and/or contributing information for marketing materials. However, it would not include persons who actively market the offering and interact with investors or potential investors, such as a person who is engaging in roadshow activities. Such a person would also need to be registered as a General Securities Representative (Series 7), Corporate Securities Representative (Series 62) or Private Securities Offerings Representative (Series 82) depending on the type of offering being made.

4. I am registered as a General Securities Representative (Series 7) and engage in both the sales and marketing of private placements and public offerings. Do I need any additional registrations?

If you are only engaged in selling the offering or actively marketing the offering to investors or potential investors, the Series 7 registration is sufficient. However, if you want to engage in activities such as preparing a marketing plan or advising on a marketing plan prepared by a sales team or developing and/or contributing information for marketing materials, you would also need to be registered as an Investment Banking Representative (Series 79).

Series 79 Exam Details

Candidates are provided with whiteboard/dry erase markers and basic electronic calculators, as some questions entail calculations. The exam may contain questions that require the use of exhibits, such as charts, graphs, and tables.