Hedge Fund Focus

FINRA will require a new exam called the series 79 exam for all investment banking professionals.  We will keep you up to date on this new development as more information becomes available.  Please see the press release below for more detail.

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New FINRA Examination Will Focus on the Distinctive Securities Activities of M&A Brokers and Investment Bankers

AM&AA® to Explore Impact and Significance of New Series 79 Qualification on Investment Banking Community at Summer Conference, July 28-30

CHICAGO–(BUSINESS WIRE)–The Alliance of Merger & Acquisition Advisors® (AM&AA), the leading association and credentialing body for middle market M&A professionals, today announced two new sessions dedicated to the impact and significance of FINRA’s new category for investment banking professionals, Limited Representative-Investment Banking, at the AM&AA Summer Conference, July 28-30 in Chicago.

A new Rule 1032(i), announced by FINRA earlier this year, will become effective 90 days after FINRA announces the development of a Series 79 qualification examination for qualified professionals focusing exclusively on investment banking transactions, including those who work on the equity and debt markets and syndicate desks. The SEC must approve the new Series 79 exam and corresponding fees before the new rule will become effective, likely to happen in late 2009 or early 2010. When effective, passing the Series 79 examination will be among the prerequisites for an individual’s registration with a registered broker-dealer.

With this new FINRA regulation, investment bankers will no longer be required to take the existing Series 7 General Securities Representative examination which covers many aspects of securities regulation that are largely irrelevant to most investment bankers day-to-day activities such as, retail customer solicitation, sales, and trading. Instead, candidates for the Series 79 qualification will be required to pass an examination focusing on the tasks that he or she is likely to perform as an investment banker. Passing the Series 63 Uniform Securities Agent State Law Examination, also administered by FINRA, will continue to be a qualification for an individual’s registration with a broker-dealer. The Series 63 examination tests for knowledge of state securities laws and related regulation.

“The AM&AA has been involved in advocating for appropriate mergers and acquisitions regulatory rules for several years now,” said Mike Ertel, Co-Chair, AM&AA Licensure Task Force and Managing Director, Legacy M&A Advisors based in Tampa. “On behalf of our membership and the entire M&A and investment banking community, we are pleased to see a first step in regulations that seem to more adequately reflect our activities. The AM&AA Licensure Initiative, however, continues to advocate for greater clarity and simplicity on all regulatory M&A issues for the greater benefit of our members in the lower middle market and the profession as a whole; as well as the legion of small to medium-sized businesses that make up 86% of the US Gross National Product.”

To find out more about AM&AA’s Licensure Initiative, please visit www.amaaonline.org. To register for the AM&AA Summer Conference, please click here.

To address the importance of understanding this new regulation and others, two sessions at the AM&AA Summer Conference will be dedicated to exploring the impact of the new regulations on the M&A community and what it means for the future of the industry. Denise Voigt Crawford, the Securities Commissioner for the State Securities Board of Texas and the incoming President of the North American Securities Administrators Association (NASAA), will speak in-depth on the latest details and emerging issues of the new regulations, with particular regard to how it will affect small to medium sized businesses and transactions. The NASAA is the organization that coordinates state, provincial, and territorial securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada, and Mexico. Tanya Solov, Director of the Illinois Securities Department, will also be at the event.

“For decades, legitimate small businesses have been ill-served by a rigid regulatory system that has a one-size fits all perspective when it comes to their ability to use financial intermediaries,” said Ms. Crawford. “Protection of investors is critically important and is necessary to ensure long-tern investor confidence, particularly in the high-risk arena of small business capital formation. However, many times regulators simply do not or cannot empathize with the difficulties inherent in the current regulatory models that work well for large business entities but not so well for the smaller ones.”

The AM&AA Licensure Initiative is currently advocating for three separate, but related initiatives surrounding regulatory rules for M&A advisors and intermediaries: The Private Placement Broker (PPB) proposal, first proposed by the American Bar Association (ABA), the M&A Broker proposal, first proposed by AM&AA, and The Small Business Sale Transaction Exemption, first proposed by the International Business Broker’s Association (IBBA). These three proposals seek to appropriately scale federal and state securities regulation for the benefit of smaller business owners and buyers, while preserving important investor protections under these laws. The new FINRA Series 79 examination does not in any way diminish the urgent need for these proposals to be adopted and implemented through federal and state rulemaking.

“It is absolutely critical that organizations like AM&AA act as representatives, advocates and educators on regulatory issues for M&A advisors,” said Mike Adhikari, AM&AA President, and President and Owner of Illinois Corporate Investments, Inc. and Business ValueXpress. “Middle market dealmakers must be savvy and educated on the affects and implications of new regulatory rules and restrictions such as the new FINRA rule, the M&A Broker proposal, and Obama’s regulatory reform proposal on our profession. The AM&AA Summer Conference, July 28-30 in Chicago, will be a vibrant forum for discussion and analysis of each of these impending regulations, and our members will be continually kept apprised with the latest information and details.”

To view the AM&AA Summer Conference Brochure, please click here, or visit www.amaaonline.org.

To learn more about the AM&AA certification program, the Certified Merger & Acquisition Advisor® (CM&AA) credential, please visit www.amaaonline.org/cmaa.

About AM&AA

The AM&AA is the leading association and credentialing body for middle market M&A professionals. Our leadership and people have unrivalled multidisciplinary expertise in the financial services industry. AM&AA members represent sellers and buyers of businesses ranging from $5 to $500 million in transaction value. Their services are seller representation, buyer representation, due diligence, accounting financing, business valuation, tax planning, legal, strategic, other advisory and transaction services. The AM&AA offers members a solid platform for professional collaboration.

NOTE TO MEDIA: To attend the AM&AA Summer Conference, please contact: Jen Dowd, BackBay Communications, 617-556-9982, x225, jen.dowd@backbaycommunications.com.

Contacts

BackBay Communications
Jen Dowd, 617-556-9982 x225
Jen.Dowd@backbaycommunications.com

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