New Securities Regulations Cause Confusion Among Investment Bankers and the M&A Industry

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Thinking this would somehow streamline and simplify the process, FINRA came up with a new registration category for investment bankers called "Investment Banking Representative," or in FINRA parlance, Series 79. But instead of making things simpler, this new category is causing considerable confusion within the investment banking industry.

Independent investment bankers across the country are slowly learning that they must maintain an additional securities registration in order to sell a private placement. The Series 79 alone is no longer sufficient.

"What is causing the confusion is that the Series 79 clearly states that it covers the structuring and marketing of a private placement," said Amy Cross, Partner and Chief Compliance Officer of StillPoint Capital in a statement released today. "It wasn't until commissions were being withheld at closing tables that we learned the exam does not qualify someone to 'sell' a private placement."

Investment bankers originally thought a Series 79 was the only registration they needed to raise capital or conduct a private placement. Therefore, it comes as a surprise almost two years later that they also must have a Series 7, Series 62 or Series 82 to conduct the "selling phase" of a private placement pursuant to the Investment Banking Representative registration category requirements.

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