What is the Series 79 License? – Why You Need it, and How to Obtain it

If you’re just starting on your path into the financial services industry, you’re likely overwhelmed with the number of licenses that are available to be obtained. Why are there so many licenses and which ones are right for you? 

Before taking any exams, you first need to determine the path you want to take in your career. Which financial securities or advice do you want to provide to your clients? Do you want to offer a limited list of securities, or do you intend to provide a wide array of products and services? Do you want to be a financial planner, investment adviser, or investment banker? Are you considering advising on new debt and equity offerings? To provide advice regarding new issues and other methods of raising capital, you will need to become an Investment Banking Representative. 

By passing the Series 79 Exam, you will be able to provide advice to issuers of securities concerning raising capital, mergers and acquisitions, and financial restructuring (bankruptcy). 

What is a Series 79 License? 

The Series 79 license (also referred to as the Series 79 registration or qualification) allows you to become an Investment Banking Representative of a broker-dealer. The covered activities include advising on and/or facilitating the following: 

  • Debt and equity offerings (private placements and/or public offerings) 
  • Mergers and acquisitions 
  • Tender offers 
  • Financial restructurings 
  • Asset sales 
  • Divestitures or other corporate reorganizations 
  • Business combination transactions 

However, a person with a Series 79 license is not permitted interact with investors or market offerings to them. To engage with investors, a person must pass the Series 7 Exam as well. 

Why You Need a Series 79 License? 

The Series 79 license is the registration a person needs to start a career in the world of investment banking. Passing the exam demonstrates your understanding of the functions that are required of an Investment Banking Representative, including collecting and analyzing data, processing of financing transactions, understanding the different types of underwritings, as well as understanding mergers and acquisitions, and tender offers. 

Reasons to Take the Series 79 Exam 

Taking the Series 79 Exam can be a valuable investment in your career in the financial industry. The top four reasons are: 

  • Career Advancement:  The Series 79 Exam is generally taken by a select group of candidates. In fact, it’s one of the more challenging representative exams administered by Financial Industry Regulatory Authority (FINRA). The exam tests on your knowledge of capital markets, the process of collecting and evaluating financial data, and methods of structuring underwritings. 
  • Increased Earning Potential:  Many financial firms offer higher compensation to individuals who hold specific professional licenses, such as the Series 79. Passing the exam puts you in an elevated group of the firm’s employees. 
  • Expanded Product Offerings:  Passing the Series 79 Exam allows you to assist in the structuring of new securities offerings. If taken with the Series 7 Exam, you’re also permitted to interact with clients on the sale of these offerings. 
  • Professional Credibility:  Holding a Series 79 license enhances your professional credibility within your broker-dealer. Being licensed demonstrates an understanding of how companies should be evaluated when determining their ability to raise capital. 

Before Taking Series 79 Exam 

Before sitting for the Series 79 Exam, you must be sponsored by a member of a self-regulatory organization or by a FINRA member. After taking and passing your exam, you must then register with FINRA through your sponsoring company to be allowed to function as an Investment Banking Representative. 

The Series 79 license is a corequisite to the Securities Industry Essentials (SIE) Exam. This means that the SIE Exam must be passed before you can take on the role of an Investment Banking Representative. The SIE Exam is different than FINRA qualifying exams (e.g., Series 79) in that it doesn’t require a sponsor. A passing score on both exams is a requirement for obtaining the Series 79 license. In addition, if you want to interact with clients and potential clients on the sale of new offerings, you must pass the Series 7 General Securities Registered Representative Exam as well. When the Series 7 is added, most states require you to register in the state by passing the Series 63 Exam (the Uniform Securities Agent State Law Exam). 

Preparing for the Series 79 Exam 

Successfully completing the exam is not just a formality; it requires effort and preparation. The average student studies for approximately 50 to 60 hours before taking the test. This involves gaining an understanding of the topics that are covered in FINRA’s Series 79 Content Outline. 

The Content of the Series 79 Exam 

The content of the Series 79 Exam is divided into the following three functions: 

  • Function 1 (covers 49% of the exam, 37 questions): Collection, Analysis, and Evaluation of Data 
  • Function 2 (covers 27% of the exam, 20 questions): Underwriting/New Financing Transactions, Types of Offerings, and Registration of Securities 
  • Function 3 (covers 24% of the exam, 18 questions): Mergers and Acquisitions, Tender Offers, and Financial Restructuring Transactions 

The Series 79 Exam is administered through FINRA and is a multiple-choice exam that consists of 85 questions (75 scored and 10 unscored). You’re given two hours and 30 minutes to complete the exam. The cost of the exam is $300. To pass, you need to achieve a minimum score of 73% (i.e., answer a minimum of 55 questions correctly). 

If you don’t pass on your first attempt, you must wait 30 days before taking the test again. If you don’t pass on the second attempt, you must wait another 30 days. If you don’t pass on your third attempt, you must wait 180 days. 

Tests may be taken at a local test center. The exams are offered through Prometric – the vendor that’s used by FINRA. More than one exam may be taken at a time. For example, you can take your SIE Exam and Series 79 Exam on the same day. 

How Long is a Series 79 License Valid? 

The Series 79 license is valid for the duration of your employment with your sponsoring firm as long as you remain registered and in good standing with FINRA. If you leave your firm or your registration lapses, your Series 79 license will no longer be valid. 

After being registered for one year, you must begin satisfying FINRA’s Regulatory Element of continuing education. This will cover content that’s specifically tailored to your registration category, and it must be completed annually by December 31. 

Are you ready to obtain your Series 79 license? If so, STC has everything you need to gain the knowledge and skills necessary to pass your exam and embark on a successful career as an Investment Banking Representative. With STC’s Pass Guarantee, you will be prepared to advance your career! 

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