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Investment Banking License requirements

Banking Investment / July 1, 2020

The Series 79 exam is a lighter version of the Series 7 exam, but don't be fooled, the exam is deceptively difficult.

The Series 79 exam is for those looking to work in the area of investment banking. Before 2009 the more popular exam (the Series 7) was required to be a general broker, but some representatives found they were only performing investment banking activities, which is only a small portion of the Series 7 exam. Retail securities firms provide a different set of functions and services than investment bankers, so the Series 7 testing material covered topics beyond the duties of most investment bankers. Because of these concerns, a job analysis was conducted and a committee of investment bankers agreed on the major duties, job functions and tasks associated with this investment banking. In 2009 the Securities and Exchange Commission (SEC) approved the more focused, Investment Banking Representative Qualification Examination (Series 79). This exam is also referred to as the "Limited Representative" Investment Bankers's exam because it was designed for entry level investment bankers.

Who Needs the Series 79

What is investment banking and how do you know you need the Series 79 license? Besides being told by your employer, there are specific areas of finance where you will probably need this license. NASD Rule 1032 defines the different types of representative categories, and section (i) Limited Representative - Investment Banking gives a more than thorough explanation of the areas.


The series 79 satisfies the Series 24 prerequisite as a representative exam. But because the Series 79 focuses on investment banking, the Series 24 General Securities Principal will be limited to investment banking supervisory responsibilities if they only have the Series 79. The Series 7 is more general and is not a substitute for the Series 79. So those looking to move into supervising investment bankers will need the Series 79 even if they already have the Series 7. This is one of the only cases where the Series 79 can be used as a prerequisite instead of the Series 7. (Knowing how the primary and secondary markets work is key to understanding how stocks trade, read A Look At Primary And Secondary Markets.)

Generally if you deal in either of these two main areas of activities, either as a worker or a supervisor, you might need the Series 79.

1. Debt or equity offerings through public or private placement.

Other activities involved which the series 79 might be required for:

  • Pricing of securities in the debt and equity offerings
  • Origination, which deals with equity capital markets and debt capital markets
  • Marketing
  • Structuring
  • Syndication
  • Managing the allocation and stabilization activities of offerings


2. Mergers, acquisitions and financial restructuring

Some responsibilities that a series 79 will train on or might be required for.

There Are Exceptions

Even if the employee participates in these investment banking activities they might not need a Series 79 if the exposure is very limited. Also in some jobs where new associated employees rotate among different business areas and departments for training purposes, there is some leeway. These workers will be given a six month grace period from when they start working in investment banking activities. Normally, working in these areas would trigger the need to register as an Investment Banking Representative, but this exception allows firms to train employees. For a complete guide to exemptions look at NASD Rule 1032 (i).