What is a Series 39?

Series 39 is a certification governed through the Municipal Securities Rulemaking Board (MSRB) and administered through the Financial Industry Regulatory Authority (FINRA). The certification is most popular in the United States and is a requirement for individuals working in the financial securities industry. The Series 39 certification focuses on three areas: direct participation programs, how to manage other securities dealers in a brokerage house and regulatory requirements from FINRA, and the Securities and Exchange Commission.

The Series 39 exam consists of 100 questions mixed between the three sections mentioned previously, with the questions focusing on the structure and regulation of direct participation programs. The exam has a time limit of two and a half hours with questions appearing in a multiple choice format. To pass the exam successfully, candidates must achieve a minimum score of 70 percent. Training options are available from various testing groups, although the total study and preparation time will probably differ among candidates.

Direct participation programs are specific investments in the securities market, which is why MSRB develop the Series 39 certification. These investments allow individuals to participate in the direct cash flows of an organization, earning tax benefits from the investments owned by the company. Many of these organizations focus on specific industries or sectors, such as real estate or energy ventures. Changes to the U.S. tax code have greatly reduced the benefits of these plans, making them a less attractive investment.

FINRA has two options candidates must consider when obtaining continuing education for the Series 39 certification: the regulatory and firm element. Individuals must complete the regulatory continuing education program on the second anniversary of receiving their certification and every three years after the first renewal. This allows individuals to remain current with changes to the financial services sector. The firm element is primarily for broker-dealers and focuses on keeping registered individuals up-to-date on issues concerning securities and other investment instruments.

The MSRB heavily regulates the financial services industry to ensure improprieties do not exist among investors and brokerages firms. Individuals will most often need to obtain other securities certification in order to sell various financial products in their job position. These certifications can include the Series 6, 7, 51, or 53 licenses, all governed by the MSRB with tests administered by FINRA. Each certification focuses on a specific topic, such as mutual funds, variable annuities, insurance premiums, general securities, managing a brokerage firm as a principal or managing agency securities and U.S. Treasury obligations in a broker/dealer representation.