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Series 79: Understanding the Exam and Career Opportunities

Last updated 03/15/2024 by

Bamigbola Paul

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Series 79 is a crucial examination for financial professionals aspiring to become investment bankers. Administered by FINRA, this test evaluates candidates’ competency in various essential areas of investment banking. Understanding the exam structure, prerequisites, and the scope of activities it permits is crucial for anyone planning to pursue a career in this dynamic field.

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What is Series 79 and why is it important?

The Series 79 exam serves as a pivotal gatekeeper for financial professionals seeking to establish their careers in investment banking. Aspiring investment bankers must understand the significance of this examination, its contents, and how it facilitates their entry into the investment banking domain.

Series 79 exam overview

The Series 79 examination, also known as the Investment Banking Representative Qualification Examination, is a rigorous assessment conducted by the Financial Industry Regulatory Authority (FINRA). This exam is a fundamental prerequisite for professionals who aim to engage in various crucial activities within the investment banking sector. As of its recent restructuring in October 2018, the Series 79 exam is now a co-requisite along with the Securities Industry Essentials (SIE) exam, both of which are necessary to obtain the Series 79 license.

Why Series 79 matters

The Series 79 exam holds significant importance as it ensures that individuals possess the requisite skills, knowledge, and ethical standards crucial for success in investment banking functions. The comprehensive evaluation process is specifically designed to test candidates on their proficiency in key areas including mergers & acquisitions (M&A), financial restructuring, and underwriting, among others.

Understanding the Series 79 examination structure

Gaining insight into the specific structure and composition of the Series 79 exam is vital for individuals planning to undertake this challenging assessment. A comprehensive understanding of the exam breakdown, question types, and permitted activities is essential for successful preparation and performance.

Series 79 exam composition

The Series 79 exam is composed of 75 multiple-choice questions, each with four possible choices. Additionally, 10 unscored questions are interspersed throughout the exam without any specific labeling. The exam is divided into three primary functions, each assessing different aspects of the candidate’s knowledge and capabilities.

Series 79 exam breakdown

The exam breakdown is as follows:
1. Collection, analysis, and data evaluation – 49% of the exam
2. Underwriting and new financing – 27% of the exam
3. Mergers & acquisitions, tender offers, and financial restructuring – 24% of the exam
Candidates are allotted two and a half hours to complete the exam, and a passing score of 73% or higher is required to obtain the license.

Prerequisites for Series 79 exam

While there are no specific prerequisites for taking the Series 79 exam, candidates are required to pass the SIE exam, which serves as a corequisite. Additionally, candidates must be sponsored by a FINRA or self-regulatory organization member firm, and a fee of $245 must be paid to sit for the exam.

The scope of Series 79 licensed activities

Earning the Series 79 license enables financial professionals to engage in a variety of critical investment banking activities, facilitating the execution of complex financial transactions and advisory services within the industry. Some of the key activities permitted for Series 79 license holders include:
  • Debt and equity offerings, including private placements and public offerings
  • Mergers and acquisitions
  • Tender offers
  • Financial restructurings
  • Asset sales
  • Divestitures and corporate reorganizations
These activities form the cornerstone of an investment banker’s role, necessitating a comprehensive understanding of financial markets, legal regulations, and intricate transactional processes.

Preparing for the Series 79 exam

Given the complexity and depth of the Series 79 exam, effective preparation is key to achieving a successful outcome. Understanding the specific topics covered in the exam and the available resources for preparation is crucial for candidates aspiring to pass the exam with confidence.

Key topics covered in the Series 79 exam

The Series 79 exam covers a range of critical topics, including:

Function 1: Collection, analysis, and data evaluation

This segment evaluates candidates on their ability to analyze and evaluate complex financial data, including trend analysis, company evaluation, and due diligence processes.

Function 2: Underwriting and new financing

Candidates are tested on their understanding of underwriting agreements, different types of offerings, and securities registration processes, requiring comprehensive knowledge of financing deals and regulatory requirements.

Function 3: Mergers & acquisitions and financial restructuring

This section assesses a candidate’s grasp of M&A transactions, tender offers, and financial restructuring processes, including their knowledge of relevant regulations and bankruptcy proceedings.

Series 79 exam administration and logistics

The Series 79 exam is a closed-book examination that must be taken on a computer. Test-takers are not permitted to bring any reference materials, and the exam can be administered at designated test centers or proctored online. Candidates are provided with specific tools and resources, including calculators and scratch paper, to facilitate their examination process.
FINRA also accommodates individuals requiring special assistance or modifications, ensuring that the exam remains accessible and fair to all candidates, regardless of their individual needs.

Comprehensive examples of Series 79 exam questions

Sample function 1 question:

Imagine you are an investment banker tasked with evaluating a company’s financial performance. You are provided with historical financial data, including balance sheets, income statements, and cash flow statements. What key financial ratios and trends would you analyze to assess the company’s financial health and stability? Please select the most relevant financial metrics and provide a brief explanation of your choices.

Sample function 2 question:

You are assisting in an underwriting process for a company’s initial public offering (IPO). Explain the key steps involved in underwriting an IPO, including the role of the underwriting agreement, the registration process, and the responsibilities of underwriters. Additionally, outline the main regulatory requirements that must be met during this process.

Sample function 3 question:

In a scenario involving a merger and acquisition, you are representing a client who wishes to acquire a competitor. Describe the main stages of an M&A transaction, from the initial setup to the finalization. Highlight the critical factors and legal regulations that need to be considered during the buy-side M&A process. Also, explain the typical challenges and risks associated with such transactions.

Subheadings added for further clarity

The series 79 examination process

This section provides an in-depth look at the process of the Series 79 examination, including registration, scheduling, and the examination day experience. It delves into the various aspects of the exam process that candidates should be aware of.

Preparing for success

In this segment, we explore effective strategies and resources available for candidates to prepare comprehensively for the Series 79 exam. From study materials to dedicated study plans, candidates will find valuable insights to boost their confidence and performance.

Real-world application of Series 79 knowledge

Investment banking scenarios

This section presents real-world scenarios that require the application of Series 79 knowledge. It offers a glimpse into how professionals use their expertise in investment banking activities, such as conducting mergers and acquisitions, facilitating financial restructurings, and participating in equity offerings.

Case studies in investment banking

Here, we explore case studies that showcase how individuals with Series 79 licenses have successfully navigated complex financial transactions and advisory services. These case studies highlight the practical relevance and impact of Series 79 knowledge in the investment banking industry.

The bottom line

The Series 79 exam serves as a critical gateway for professionals aiming to establish their careers in investment banking. By assessing candidates’ expertise in various essential areas of investment banking, this examination ensures that licensed individuals possess the necessary qualifications and knowledge to navigate the complexities of the financial industry. The thorough understanding of Series 79 is imperative for any aspirant seeking to excel in the dynamic and demanding field of investment banking.

Frequently asked questions

What are the recommended study materials for preparing for the Series 79 exam?

There are various study materials available to help candidates prepare for the Series 79 exam. These materials often include comprehensive study guides, practice exams, and online courses tailored to the specific content of the exam. Candidates are advised to explore reputable study materials and resources provided by established educational platforms and industry experts.

How can candidates best manage their time during the Series 79 exam?

Time management is crucial during the Series 79 exam, given the comprehensive nature of the assessment and the allotted time of two and a half hours. Candidates should allocate specific time slots for each section of the exam, ensuring they have sufficient time to answer each question thoughtfully. Additionally, they should prioritize questions based on their confidence levels and avoid spending too much time on any single question.

What are the common pitfalls that candidates should avoid during the Series 79 exam?

Some common pitfalls that candidates should steer clear of during the Series 79 exam include overthinking questions, neglecting to read questions thoroughly, and making assumptions without considering all available information. Candidates should also avoid spending too much time on difficult questions, as it may impact their ability to address other questions within the allocated time frame.

Are there any specific strategies for improving performance in the M&A section of the Series 79 exam?

To enhance performance in the M&A section of the Series 79 exam, candidates should focus on understanding the key concepts and regulations related to mergers and acquisitions. They should familiarize themselves with typical M&A transaction scenarios and practice analyzing and evaluating the various stages of these transactions. Additionally, candidates can benefit from reviewing real-world case studies and examples of successful M&A deals.

How can candidates stay updated with the latest developments and changes in the investment banking industry relevant to the Series 79 exam?

To stay informed about the latest developments and changes in the investment banking industry, candidates can actively engage with industry publications, financial news platforms, and regulatory updates provided by organizations such as FINRA, SEC, and other relevant financial authorities. They can also participate in professional development programs, attend industry conferences, and join professional networking groups to stay abreast of industry trends and best practices.

What are the potential career paths for individuals with a Series 79 license?

Individuals holding a Series 79 license can explore various career paths within the investment banking sector. They can pursue roles such as investment banking analysts, corporate financial advisors, M&A consultants, or financial restructuring specialists. Additionally, they may have the opportunity to advance into managerial or leadership positions within investment banking firms, leveraging their expertise and experience in facilitating complex financial transactions and strategic advisory services.

Key Takeaways

  • Series 79 exam is a vital prerequisite for professionals aiming to pursue a career in investment banking.
  • Candidates must demonstrate a thorough understanding of various key areas, including data analysis, underwriting, and M&A transactions, to pass the exam.
  • Holding a Series 79 license allows professionals to engage in critical investment banking activities, such as mergers, debt and equity offerings, and financial restructurings.
  • Effective preparation for the Series 79 exam involves dedicating significant study hours and utilizing resources tailored to the exam’s comprehensive scope.
  • The Series 79 exam serves as a crucial measure of a candidate’s expertise and knowledge in navigating complex financial transactions and regulatory requirements within the investment banking industry.

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