Tag Archives: series 79 license

Series 79 Opt In Period Begins

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Investment Banking Representative Exam Goes Live

Today marks the first day that current Series 7 licensed representatives of BDs who engage in “investment banking activities” can opt in to the Series 79 license.  Current Series 7’s will need to talk with their compliance department who will be able to complete a Form U4 update for the rep.  According to a FINRA representative I talked with last week, the opt in process will be very easy – essentially the compliance person for the BD will go into the CRD system, check the Series 79 box for the appropriate BD reps and then submit the revised U4 to FINRA.

Reps who engage in investment banking activities should make sure that they have opted in before May 3, 2010 or they will be required to take the exam which is 5 hours long (175 multiple choice questions).

Series 79 Articles

  • Regulatory Notice 09-41 – this article reprint’s FINRA’s notice to members.  Notice includes: background and discussion on exam, discussion of the opt in period, information on the training program exception, information on requirement for principals, outline of content, registration procedures, effective date and FAQs.
  • Series 79 Content Outline – FINRA’s content outline for the new exam.  Provides an overview of the major categories and sub-categories which will be tested.
  • Series 79 Questions and Answers – in this article we address some of the questions which have been posed to us regarding the new investment banking exam.

Other related hedge fund law articles include:

Bart Mallon, Esq. of Cole-Frieman & Mallon LLP runs Hedge Fund Law Blog and can be reached directly at 415-868-5345.

Series 79 Questions and Answers | Investment Banking Exam

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Q&A For New FINRA Exam License

We have fielded a number of questions regarding the new Series 79 exam for investment banking professionals.  We are creating this question and answer page as a service to our readers.  We will attempt to answer questions as best as possible and our understanding the 79 exam license and the way it will be utilized in practice will develop over time so we expect this resource to become more valuable over time.  Please help us to make this a valuable resource by adding your questions, responses or comments below.

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Question: While the series 79 makes sense in allowing investment bankers to focus on more pertinent test questions,  do the principal requirements for a boutique (i.e. 3 person) investment banking shop remain the same.  In other words,  is a small shop doing only investment banking still required to  be a BD with series 24 and series 27 registered principals which are tested extensively on managing a full Reg Rep not a Ltd Rep as in series 79?  Thanks!

Answer: I believe you are asking whether a small BD, which is only engages in investment banking activities, needs to continue to have a General Securities Profession (Series 24) and a Financial and Operations Principal (Series 27) – if so, then yes.  Additionally, such a firm will need to make sure that the Series 24 licensed principal also has a Series 79 license.  Generally all Series 24s will have the Series 7 as well so the Series 24 principal will need to opt-in to the Series 79 license prior by May 3, 2010.

To opt-in, a Series 7 licensed representative or principal will need to amend their Form U4 to request the Investment Banking representation.  The opt-in period will not begin until November 2, 2009 and will run until May 3, 2010.  After May 3, 2010, if a Series 7 licensed individual has not opted-in to the Series 79, then the individual will need to take the exam in prior to participating in investment banking activities.  The Form U4 will be amended to include this new registration category.

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Question: I have been a business brokers in [state] under the Real Estate license. Will I be required [to have] a Series 79 license in order to continue my [business] broker practice whereby assets are sold through every transaction?  Thanks.

Answer: This question is basically asking whether a business broker will need to be registered as a broker-dealer if the broker is only advising on the sale of assets (and not the securities of a company).  This question is fact specific and the answer will depend on the specific facts of the situation and the various state laws which may be implicated.  You should discuss this issue with an attorney.

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Please contact us if you have any questions or would like to start a hedge fund. Other related hedge fund law articles include:

Bart Mallon, Esq. runs hedge fund law blog and has written most all of the articles which appear on this website.  Mr. Mallon’s legal practice is devoted to helping emerging and start up hedge fund managers successfully launch a hedge fund.  If you are a hedge fund manager who is looking to start a hedge fund, or if you have questions about the Series 79 or investment banking activities, please call Mr. Mallon directly at 415-296-8510.