The Series 79 exam is the Financial Industry Regulatory Authority (FINRA) qualification exam for Investment Banking Representatives. If you are preparing to take one of the securities industry’s licensing exams, you probably want clear answers about what it covers, what it costs, and how hard it is to pass.
This guide provides detailed information about the exam format, the three tested functions, the requirements, and what to do if you fall short, so you know exactly what to expect before test day.
What Is the Series 79 Exam?
Passing the Series 79, together with the Securities Industry Essentials (SIE) Exam and sponsorship by a FINRA member firm, qualifies an individual for registration as an Investment Banking Representative under FINRA. It qualifies representatives to advise on and help arrange securities transactions in the capital markets, which covers much of the everyday work that analysts and associates perform on live deals. FINRA administers the exam as a specialized alternative to the broader Series 7, so your training stays focused on deal work rather than retail sales.
Once you pass, you register as an Investment Banking Representative under FINRA Rule 1220, which formally recognizes your ability to perform these functions. We understand the exam can feel intimidating when you are just starting your career in the financial industry, and you may be feeling unsure about how much ground it covers. The requirements and knowledge required become much clearer once you break the exam into its parts, which is what the rest of this guide does.
What Does the Series 79 License Let You Do?
The Series 79 permits registered representatives in the Investment Banking Representative category to advise companies on certain investment banking transactions
Companies rely on qualified financial professionals, particularly investment banking professionals, for advice on complex financial transactions and corporate restructuring. Those recommendations may include how to go about making a tender offer to purchase shareholders’ stock, or how to reorganize a company’s debt and capital during distress (financial restructuring). Aside from those two examples, the recommendation may also include mergers, acquisitions, or asset sales.
It’s also important to note that carrying this registration has firm boundaries. While it authorizes certain securities activities related to investment banking, it does not permit you to solicit or market securities directly to investors. Representatives who want to actively market securities to investors generally must also hold the Series 7 registration, which qualifies them for general securities representative registration under FINRA.
What Is the Series 79 Exam Format?
The Series 79 exam contains 75 scored multiple-choice questions, and you have two hours and thirty minutes to complete it. To pass, you must achieve a scaled score equivalent to 73%. On the current exam, this corresponds to answering approximately 55 of the 75 scored questions correctly. Every question presents four answer choices, and the entire exam is delivered by computer at a testing center or through online proctoring.
You may also see ten additional questions that do not count toward your score. These unscored questions allow FINRA to evaluate new exam items before they are used with future test takers. They appear at random and look identical to scored questions, so you should treat every question as though it counts. That approach keeps you from second-guessing which topics are scored and which are being trialed.
What Topics Are on the Series 79 Exam?
The Series 79 organizes its questions around three investment banking functions defined by FINRA, and each function carries a different weight on the exam. They are:
- Data collection and evaluation (49% of the questions)
- Underwriting and offerings (27% of the questions)
- Mergers, acquisitions, tender offerings, and financial restructuring transactions (24% of the questions)
These functions mirror the actual work that entry-level investment bankers perform, from analyzing financial data to executing offerings and advising on deals. Understanding how the questions are distributed helps you identify the knowledge needed for each function and prioritize your study time accordingly. The three major job functions below account for the entire scored portion of the exam, so we will look at each one in turn.
Data collection and evaluation
Data collection, analysis, and evaluation make up the largest function on the exam, accounting for 49 percent of the questions. This section centers on financial statements and valuation, which are the analytical foundation of nearly every banking assignment. You will be tested on reading disclosures, interpreting SEC filings and prospectuses, and building the due diligence frameworks that support a recommendation. A prospectus is the formal document that discloses the details of a securities offering to potential investors.
Expect a fair amount of valuation math as well, since this function rewards candidates who can work the numbers under time pressure. You may need to calculate a company’s equity value and enterprise value, adjust for non-recurring items, or estimate an IPO valuation using earnings or revenue multiples, depending on the company and industry. These calculations reflect the daily work of a junior banker, so the exam tests them in applied scenarios rather than as abstract formulas.
Underwriting and offerings
The second function covers underwriting, new financing, and the registration of securities, and it makes up 27 percent of the scored questions. Underwriting is the process by which a bank helps a company raise capital by issuing and distributing new securities to investors. Capital raising transactions may involve equity offerings, debt offerings, or other financing structures. You must understand the roles of the underwriters, the SEC filings that accompany an offering, and the exemptions that let certain deals proceed without full registration.
This section also reaches into the mechanics that govern how offerings actually reach the market. You will see questions on shelf registration, private placements (private securities offerings), and the rules that control marketing materials during a deal. A private placement is the sale of securities to a limited group of investors without a public offering, and it follows a different set of regulatory steps. This function measures which process applies to which type of deal.
Mergers, acquisitions, and restructuring
Mergers and acquisitions, tender offers, and financial restructuring form the third function, and at 24 percent, it is the smallest of the three by weight. Even so, it covers the deal work that most people picture when they think of investment banking. You will be tested on the documents that move a transaction forward, the purpose of fairness opinions, and the gap period between signing a deal and closing it.
Aside from understanding how deals work, the regulatory side of this function also carries real weight on the exam. Expect questions on the rules that govern tender offers, along with the distinction between a Chapter 7 liquidation and a Chapter 11 reorganization in bankruptcy. Chapter 7 winds a company down and sells its assets, while Chapter 11 allows a business to continue operating through a corporate reorganization. The exam asks you to know which structure and which rule apply to a given situation.
What Are the Series 79 Requirements?
Before you can obtain Investment Banking Representative registration, you must satisfy two key requirements as part of the FINRA licensing process. The Securities Industry Essentials (SIE) Exam is a co-requisite that tests general securities knowledge, and you can take it before or after the Series 79 in either order. Many candidates take the SIE first because it does not require sponsorship and can be taken on your own timeline.
Sponsorship comes from your employing broker-dealer or other FINRA member firm, which files a Form U4 on your behalf before you are eligible to schedule the exam. The Form U4 is the uniform application that registers you with FINRA through your firm. No prior securities registration is needed beyond the SIE co-requisite, so the path stays fairly direct. Here at the Law Offices of Robert Wayne Pearce, P.A., our FINRA arbitration lawyers focus on securities and investment-related disputes, and we help investors hold firms and representatives accountable when the rules these exams cover are broken.
How Much Does the Series 79 Exam Cost?
FINRA currently sets the Series 79 exam fee at $245 per attempt. In most cases, your sponsoring firm pays this fee for you, since the registration benefits the employer as much as the candidate. That coverage is worth confirming with your firm before you schedule, so there are no surprises about who submits payment.
Study materials are separate from that fee and represent an additional cost you should plan for. Prep courses, textbooks, and question banks are priced on their own, and quality varies widely across providers. If you do not pass on your first try, you pay the exam fee again for each retake, which is one more reason to prepare thoroughly before your first sitting.
How to Prepare for the Series 79 Exam
Most candidates spend somewhere between 50 and 100 hours preparing to pass the Series 79, with the range depending on how much banking experience you already bring. If you work with financial statements and valuation every day, you will likely land near the lower end. If the material is new, plan for the higher end and give yourself several weeks.
To prepare, start by reading the textbook to build a general understanding of the topics covered before moving on to full-length practice exams. We recommend concentrating your effort on the first function, since it is the largest section and the one that trips up many candidates.
After that, shift the bulk of your time into full-length practice exams taken under timed conditions. Studying under these conditions trains both your knowledge and your pacing.
Additionally, as your exam date approaches, space out several diagnostic exams rather than cramming them together. Many instructors recommend consistently scoring around 75% or higher on full-length practice exams before you sit the real thing. Consistent scores in that range are a reliable sign that you are ready to pass.
Series 79 vs. Series 7
The Series 7 and the Series 79 lead to separate career paths. The Series 7 is broad and client-facing, qualifying you to sell a broad range of securities to investors, while the Series 79 is specialized for investment banking and does not permit investor sales. The Series 79 is the shorter exam, yet many find it more technical because of its heavy valuation content. Which one you need depends on your role, and some positions require both licenses when the job involves both deal work and investor contact.
What Happens If You Fail the Series 79 Exam?
If you do not pass the Series 79, FINRA requires you to wait before you can take it again. After your first and second attempts, the waiting period is 30 days each, which gives you time to review the areas that gave you trouble. Use that window to target your weak functions rather than restudying everything from the start.
The waiting period grows after a third failure, stretching to 180 days before you can sit the exam once more. Each retake also requires a new exam fee and continued sponsorship from your firm.
We understand that failing an exam is discouraging, and you may be feeling anxious about your timeline, but a measured retake plan puts a passing score well within reach.
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