According to a recently published Small Business Credit Survey, a majority of the small businesses are facing financial difficulties. As many as 70% of small employer firms are in debt, with the outstanding liabilities creating a threat to their survival. Many of the companies have resulted to working with intermediaries such as broker dealers to facilitate their capital acquisition.
Broker dealers are individuals or firms engaged in trading securities on behalf of their clients, but may also trade for themselves. These financial entities may provide investment advice to customers, facilitate trading activities, or raise capital for struggling firms. To operate as a certified broker dealer, the firm must have a license from FINRA. The firm receives the license after taking and passing FINRA licensing exams.
Series 79 Sponsorship
One of the most spoken of FINRA examinations is the Series 79 sponsorship. The license, also identified as the Investment Banking Representative Examination or simply IB, lets small-independent boutiques register with FINRA to offer advice on:
- Financial Restructuring
- Debt or equity financing
- Asset sales
- Mergers or Acquisitions
- Tender offers, and much more
To sit for the examination, you need sponsorship from an already registered FINRA member that will file your application. Here are steps to follow when you want to get your Series 79 License.
1. Sit for the SIE Exam
The securities licensing exam is a co-requisite with the representative series examination for you to acquire your license. The SIE tests general topics that include acceptable and unacceptable practices, regulatory agencies and their functions as well as fundamentals. You may take the examination before seeking a broker dealer sponsorship or afterward. However, most people prefer to sit for the SIE exam before the Series 79 sponsorship.
2. Look for Sponsorship
The next step, and the most important one, is to look for a broker dealer sponsorship. FINRA demands that you file your application through an active member of the organization before sitting for the broker-dealer exam. The firm will not only handle your registration but also pay for your examination fees.
You start by filing the FINRA Form U4. The application may request your personal information, professional designation, current, and past addresses, employment history, and declaration for bankruptcy and crimes. It is the responsibility of the broker-dealers to conduct background checks to verify the information provided.
After submitting your application, your relationship with the certified broker dealer officially begins. The sponsor will provide a wide range of investment solutions to you for your clients while you continue to operate under your trade name. You can also benefit from their networks, shared liability, and help in raising capital.
3. Studying and Taking the Series 79 Examination
The moment the sponsor firm sends your application to FINRA’s Central Registration Depository and pays for the exam fees, it opens a 120-day window for you to sit for the examination. Most broker dealers have in-house programs that help in exam preparation and course review. The test usually takes one and a half hours, with the passing score set at 70. Once you pass, the authority can then process your FINRA investment banking license.
To acquire your investment banking license, you may need a certified broker-dealer for your Series 79 sponsorship. Bridge Capital Associates offers sponsorship for both series 79 and series 82. Our FINRA sponsorship allows us to streamline your regulatory compliance as you focus on your clients.