Series 7 Regulations Exam 2025
Questions and Answers
Securities Act of 1933 - ANSWER✔✔-Federal regulation of the securities markets
started after the stock market crash of 1929. Congressional investigations revealed
overly speculative new issue market fed by hype/rumor was cause of speculative
bubble that burst. Passed to regulate primary market new issues.
Securities exchange act of 1934 - ANSWER✔✔-following investigation into 1929 crash,
found manipulation of trading markets. passed to regulate secondary market trading of
securities.
Trust indenture act of 1939 - ANSWER✔✔-passed to safeguard investors in corporate
bonds by requiring the appointment of a trustee to oversee corporate compliance with
requirements of the "trust indenture"
investment company act of 1940 - ANSWER✔✔-passed to regulate the activities of
investment companies and to safeguard the purchasers of investment company
securities
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
, securities investor protection act of 1970 - ANSWER✔✔-passed to protect customer
funds and securities when a brokerage firm fails
securities acts amendments of 1975 and 1988 - ANSWER✔✔-in XXXX, the securities acts
were amended to make them "more current," and in XXXX, the 1934 act was amended
because of insider trading abuses that came to light just before the crash of 1987
sarbanes oxley act of 2002 - ANSWER✔✔-passed in response to the wave of corporate
scandals that became evident after the great stock market meltdown of 2000
Securities Act of 1933 - ANSWER✔✔-required issuers be provided with detailed
prospectus before purchase completed, applies to non-exempt issues, registration
statement (basically copy of prospectus - issuers responsibility) must be filed with SEC
before any sales related activities take place.
Securities Act of 1933, registration statement - ANSWER✔✔-includes general character
of business, uses of proceeds, historical audited financial statements, biographical data
on officers/their % holdings, legal issues
Securities Act of 1933, 20-day cooling off period - ANSWER✔✔-once filed, enters this
period - SEC reviews the filing for full and fair disclosure, if theirs a problem, issuer
gets a deficiency letter. during period, issue cannot be sold, advertised, recommended,
orders solicited. issue CAN have underwriters issue preliminary prospectus - red
herring. lists of interested customers may be drawn up - taking indications of interest
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
Questions and Answers
Securities Act of 1933 - ANSWER✔✔-Federal regulation of the securities markets
started after the stock market crash of 1929. Congressional investigations revealed
overly speculative new issue market fed by hype/rumor was cause of speculative
bubble that burst. Passed to regulate primary market new issues.
Securities exchange act of 1934 - ANSWER✔✔-following investigation into 1929 crash,
found manipulation of trading markets. passed to regulate secondary market trading of
securities.
Trust indenture act of 1939 - ANSWER✔✔-passed to safeguard investors in corporate
bonds by requiring the appointment of a trustee to oversee corporate compliance with
requirements of the "trust indenture"
investment company act of 1940 - ANSWER✔✔-passed to regulate the activities of
investment companies and to safeguard the purchasers of investment company
securities
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
, securities investor protection act of 1970 - ANSWER✔✔-passed to protect customer
funds and securities when a brokerage firm fails
securities acts amendments of 1975 and 1988 - ANSWER✔✔-in XXXX, the securities acts
were amended to make them "more current," and in XXXX, the 1934 act was amended
because of insider trading abuses that came to light just before the crash of 1987
sarbanes oxley act of 2002 - ANSWER✔✔-passed in response to the wave of corporate
scandals that became evident after the great stock market meltdown of 2000
Securities Act of 1933 - ANSWER✔✔-required issuers be provided with detailed
prospectus before purchase completed, applies to non-exempt issues, registration
statement (basically copy of prospectus - issuers responsibility) must be filed with SEC
before any sales related activities take place.
Securities Act of 1933, registration statement - ANSWER✔✔-includes general character
of business, uses of proceeds, historical audited financial statements, biographical data
on officers/their % holdings, legal issues
Securities Act of 1933, 20-day cooling off period - ANSWER✔✔-once filed, enters this
period - SEC reviews the filing for full and fair disclosure, if theirs a problem, issuer
gets a deficiency letter. during period, issue cannot be sold, advertised, recommended,
orders solicited. issue CAN have underwriters issue preliminary prospectus - red
herring. lists of interested customers may be drawn up - taking indications of interest
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
