Right now, there are over 17,000 investment agencies across the United States. These investment agencies are carefully overseen by FINRA, or the Financial Industry Regulatory Authority. FINRA ensures that not only are investment bankers acting as they should but also that they are certified properly.
The licensing process through FINRA is somewhat complex and there are a number of different exams that potential investment bankers must or can take in order to earn their FINRA investment banking license.
One of the more common exams for securities representatives to take when attempting to become fully-fledged investment bankers is the series 79 exam. The series 79 exam is also known as the Investment Banking Representative Examination, or IB, and it allows representatives to register with FINRA. After passing this exam and registering with FINRA, representatives can offer advice or facilitate debt and equity offerings, mergers and acquisitions, financial restructuring, asset sales, tender offers, and divestitures or corporate restructurings.
It’s incredibly important that this exam is taken if you want to become an investment banker. However, it is an exhaustive exam and it cannot be taken without sponsorship. With that being said, let’s look into what you need to do in order to secure a series 79 sponsorship and pass the exam in general.
1. Pass The SIE Exam
Before you can secure a series 79 sponsorship, you traditionally would first take the SIE exam. The SIE exam can be taken while you are still in school and it will essentially test you on the fundamentals that you need to know when becoming an investment banker. It will ensure that you know exactly what is acceptable and what is unacceptable in terms of investment banking, while also testing you on various regulatory practices.
After you take and pass the SIE exam, you need to understand that there is a four-year window in which you can take the series 79 exam. If you do not take the series 79 exam during this window, you may need to retake the SIE exam. Technically speaking, FINRA does not require you to take the SIE exam before the series 79 exam, but it’s typically done in this manner as this exam can prepare you for the latter.
2. Secure a Series 79 Sponsorship
Next, you must secure a series 79 sponsorship. What does this mean? It basically means that a member of FINRA must back you before you take the exam. This would typically be an investment banking firm, though self-regulatory organizations can also sponsor you for a series 79 exam. Firms apply for candidates to take the exams, meaning you cannot apply by yourself. Often, this also means that your exam fee would be covered by the firm, as well. After you pass the exam, the firm will also be the entity that registers you and will basically take responsibility for supervising you. Essentially, these firms are building potentially long-term relationships with the broker dealers that they sponsor.
3. Study For Your Exam
After you’ve secured your series 79 sponsorship, you would need to begin studying for the series 79 exam. This exam is a crucial part of becoming a certified broker dealer, which means that you must take it seriously and study hard. Some firms offer in-house training programs or work through external training programs in order to ensure that the potential broker dealers that they sponsor will pass the exam. The exam will have 175 different questions; if you do not pass it, you will not be able to have your FINRA license. Remember that because you’re being sponsored for the exam by a firm, it’s crucial that you pass it the first time around if at all possible. You are an investment for them.
4. Pass the Exam
This can be easier said than done, but once you do pass the series 79 exam and the SIE exam, you’ll be able to be registered by the firm sponsoring you. You’ll be licensed and ready to work!
There are a lot of factors that can you to decide to become an investment banker. But when the time comes, follow these steps and do it the right way. It could open many doors for you. For more information on securing your series 79 sponsorship, please contact us today.