FINRA has created a new category of registration - Operations Professionals - that will require Covered Persons to (a) pass a Qualification Examination and (b) satisfy the Regulatory Element and Firm Element requirements of Continuing Education. Operations Professionals are persons with decision-making authority and/or oversight responsibilities over operations functions.
FINRA has published the content outline for the Operations Professionals Regulatory Examination—Series 99. The examination consists of 100 questions. Students are allowed 2 hours and 30 minutes to answer those 100 questions, with 10 additional ungraded questions. Passing score is to be determined. The Number of Questions by Major Content Areas is as follows:
Section 1- Basic Knowledge Associated with the Securities Industry - 32 Questions
As noted in previous FINRA Releases, the examination will be offered starting October 17.
Examples of the Covered Functions
FINRA has announced that the Series 79 Outline and Regulatory Notice are now available on the FINRA Web site www.finra.org (click here for further information - Series 79 Outline.pdf and Series 79 Notice.pdf). This new regulatory exam has been created specifically for investment banking professionals.
FINRA began administering the Examination on 2nd November 2009. As with all other FINRA Examinations, there is little or no guidance as to how topics are being tested other than the outline.
WCT’s Series 79 Training Manual and Practice Examinations will be available in December. The Manual will be in a printed format. The Practice Examinations will be available in an online format. We will be offering virtual classes starting in January, which will give you the opportunity to complete your reading before classes begin.
We strongly recommend the Virtual class, particularly if you have no prior experience with FINRA Examinations. We would also like to remind you of the opt-in provisions FINRA offers with the Series 79 Examination.
Who May Be Subject To FINRA Requirements For Passing The Exam?
According to FINRA, the new category “provides a more targeted assessment of the job functions” of investment banking activities. The rule defines investment banking activities as work performed by those “on the equity and debt capital markets and syndicate desks. More specifically, the proposed registration category would encompass those associated persons whose activities primarily involve:
1. Advising on or facilitating debt or equity securities offerings through a private placement or a public offering, including but not limited to origination, underwriting, marketing, structuring, syndication, and pricing of such securities and managing the allocation and stabilization activities of such offerings, or
2. Advising on or facilitating mergers and acquisitions, tender offers, financial restructurings, asset sales, divestitures or other corporate reorganizations or business combination transactions, including but not limited to rendering a fairness, solvency or similar opinion.”
The rule does “not cover individuals whose investment banking work is limited to public (municipal) finance offerings or direct participation program offerings. The proposed registration category further would not cover individuals whose investment banking work is limited to effecting private securities offerings.”
Grandfather Clause Anyone holding Series 7, 17 (Limited Registered Representative), 37/38 (Canada Module of the Series 7), or 62 (Corporate Securities Limited Representative) registration and engaged in investment banking activities will be grandfathered and, therefore, not required to pass the new qualification examination, provided they are designated and registered as investment banking professionals.
Now that the FINRA proposal has been approved by the SEC, those eligible will have until May 2, 2010 to “opt in to Limited Representative–Investment Banking registration.”
A person new to the securities industry, who is hired solely to perform IB functions, would be required only to pass the Limited Representative–Investment Banking examination.
Those who rotate through different business lines of a securities firm, for example investment banking, while undergoing training, may have a limited exemption from registration. Compliance or your legal department will need to be consulted to determine what registration, if any, is required.
Effective July 30, 2007, the NASD and the NYSE have merged their regulatory units. The new name is the Financial Industry Regulatory Authority (FINRA). Click here for more details:
- As of the merger, an NASD member firm will become a FINRA member firm.
- As of the merger, a firm that is a member of both the NASD and NYSE will become a dually registered firm.
- There are no changes to the names or numbers of any of the licensing examinations.
- The NASD rules and Web site will be called the FINRA rules and Web site, but this will not have any impact on the exams or study materials.
- The NYSE rules will still exist, although there will be changes in the future.
- Dually registered firms will be subject to both rules.
Presently, all that has changed is the name. When the rulebooks are consolidated, or the study outlines change, WCT will change its study materials.
NASD and the NYSE have merged their regulatory units - July 30 2007