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May 7, 2020
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The questions most frequently asked about Series 79—such as what the license is for and Series 79 exam difficulty, passing score, pass rates, questions, and topics—are answered in this article. Read on to get all the information you need to plan for a career in investment banking.
The Series 79 license is for investment bankers, enabling them to offer advice on or facilitate public or private debt or equity offerings, mergers or acquisitions, tender offers, financial restructuring, asset sales, and divestitures or corporate reorganization. Administered by FINRA, the Series 79 license is good for the entire period that you work for a FINRA-member firm or self-regulatory organization (SRO). It only expires if you are terminated or leave a firm and do not find employment within two years. Continuing education is required after you earn your license, however.
If you hold a Series 79 license, you can engage in the activities of investment banking. By contrast, the Series 7 license enables you to sell corporate stocks and bonds, municipal bonds, mutual funds, variable annuities, options, direct participation program partnerships, collateralized mortgage obligations, and more. Although each is independent of the other, the general industry consensus is that a representative with a Series 7 license who wants to work investment banking should earn the Series 79 license.
If you’re interested in a career in investment banking and want to engage in its specific activities, this is the license to have. Officially listed as Investment Banking Limited Representatives by FINRA, Series 79 license holders are usually associates at an investment bank, investment banking analysts, or investment bankers. If you earn this license, you will most likely work in an investment firm or bank. In fact, you need to be employed by a sponsoring FINRA-member firm before you can sit for the Series 79 exam.
Earning a Series 79 license involves four key steps:
Take and pass the SIE exam.
Secure a sponsorship from a FINRA-member firm.
Register for the Series 79 exam.
Study for and pass the Series 79 top-off exam.
As part of implementing the Securities Industry Essentials (SIE) exam, FINRA restructured their examination programs. FINRA is the governing body that ensures that anyone who sells securities products is qualified and tested. As part of this restructuring, FINRA created a tailored top-off examination for earning the Series 79 license. You should take the Series 79 top-off exam if you want to be licensed to sell investment banking products.
A FINRA-member firm or SRO must sponsor you to take the Series 79 exam. After you’ve worked for them for four months or more, they can file a Form U4 (Uniform Application for Securities Industry Registration) which registers you for the exam. Fortunately, most firms that hire or train you will have a mandatory Series 79 licensing program included in their training package.
There are no education requirements to sit for the Series 79 exam, although most candidates have a college degree in a finance-related field, and many choose to complete a Series 79 exam prep package before sitting for the exam.
Yes, although the more natural progression is to take the SIE exam first, mainly because you don’t have to be sponsored to take it, and it is a more general exam that covers securities concepts. The SIE exam and Series 79 top-off exams are “co-requisites,” which means you can take and pass them in any order. Of course, you have to pass both to earn your Series 79 license.
It depends. You might not need the Series 79 if you have a Series 7 license, and you want to sell a broader range of securities than those associated with investment banking. However, Series 7 license holders usually earn their Series 79 licenses if they plan to focus investment banking as registered representatives. You should consult with your firm before deciding whether you need a license or not.
Like all other securities qualification exams, the Series 79 exam is administered by computer at a Prometric testing center.
The date of the Series 79 exam is a 120-day window that is opened when a candidate enrolls for the exam. So, after you enroll in the exam, you schedule an appointment with Prometric, and choose an available exam date within that 120-day period. We recommend scheduling your exam session as far in advance as possible to secure your desired Series 79 exam date.
The Series 79 exam topics assess an entry-level registered representative’s competency and degree of knowledge associated with carrying out the three critical functions of an investment banking representative. This includes advising on or facilitating debt or equity securities offerings through a private placement or a public offering and mergers and acquisitions. Some of the topics covered are:
Analysis of trends in the market, specific industry sectors, individual companies, and the capital structure and valuation metrics of comparable companies
Due diligence by identification of information that is required to be disclosed in public or private offering documents Public offerings
Underwriting
Sell-side and buy-side transactions associated with mergers and acquisitions, tender offers, and closing
The exam consists of 75 multiple-choice questions, and each question has four answer choices. There are also 10 additional, unidentified and unscored pretest questions that do not contribute to your score that are randomly distributed throughout the exam.
Series 79 exam questions all relate to the three functions shown in this table:
Sections | % of Exam | # of Exam Questions |
|---|---|---|
F1 - Collection, analysis, and evaluation of data | 49% | 37 |
F2 - Underwriting/New financing transaction, types of offerings and registration of securities | 27% | 20 |
F3 - Mergers and acquisitions, tender offers, and financial restructuring transaction | 24% | 18 |
Total | 100% | 75 |
Most candidates spend 60 to 100 hours studying for the FINRA Series 79 exam. If you are looking for some exam study tips, this article about studying for all securities licensing exams has great advice.
Candidates must apply their knowledge to specific scenarios related to the three investment banking functions identified as critical by FINRA. The degree of Series 79 exam difficulty, therefore, is quite high. The questions are detailed with a heavy emphasis on data and analysis. So you should expect it to be challenging; however, with dedicated and focused preparation, it is possible.
The exam cost is $245.
The Series 7 passing score is 73%. What is the passing rate for the Series 79 exam? FINRA announced that the passing rate as of April 2019 was 87%.
Candidates who do not pass the exam must wait 30 days before taking it again. However, if you fail it three times in succession, you must wait 180 days. Your firm will also have to sponsor you again for each retake, and you will have to pay the full fee each time.
We hope this article answers your pressing questions about the Series 79 top-off exam and license. If you’re interested in taking the exam, we have Series 79 exam preparation packages. Or, if you’re just getting started, check out our SIE exam prep packages.
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Guide to the SIE Exam eBook
We developed this exclusive free guide to explain the exam and empower candidates to take advantage of the SIE exam to better position themselves for their big break in the industry.
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