Exam FX, SIE Study Guide, Chapter 1, Questions and
answers 2024\2025 GradeA+
Broker vs Dealer? Broker:
Acts for...
Acts as...
Paid by...
Risk?
- correct answer Acts for "others"
Acts as "Agent"
Paid by "Commission"
Assumes "No risk"
Broker vs Dealer? Dealer:
Acts for...
Acts as...
Paid by...
Risk?
- correct answer Acts for "self"
Acts as "Principal"
Paid by "Mark-up"
Assumes "Risk"
Who writes the LAWs that affect the securities industry?
- correct answer Securities and Exchange Commission (SEC)
,What ENFORCES the laws created on the securities industry?
- correct answer Self-Regulatory Orginization (SRO)
Sometimes known as, Designated Examining Authority (DEA)
In order for the SROs or DEA to govern you, you must be...
- correct answer A member
What are the different SRO's?
- correct answer 1) Financial Industry Regulatory Authority (FINRA)
2) Municipal Securities Rule Making Board (MSRB)
3) Chicago Board Options Exchange (CBOE)
In order to pay another firm any amount of commission or concessions they must also be a ...
- correct answer Member of FINRA
Which regulatory agency has no enforcing authority? And what are they allowed to do?
- correct answer Municipal Securities Rule Making Board (MSRB)
Make rules and make test questions on those rules.
Which agency is allowed to enforce rules made by MSRB? With what exception?
- correct answer FINRA
Bank dealers are enforced by FDRC or Federal reserve board
What is the designated examining authority for options? Or other exchanges?
- correct answer Chicago Board Options Exchange
Other exchanges are their own designated examining authority (ex. New York Stock Exchange)
What are FINRA's 4 separate categories of regulations?
- correct answer 1) Uniform Practice Code
2) Conduct Code
, 3) Code of Procedures
4) Code of Arbitration
Which FINRA Rule deals with member firms dealing with other member firms (broker/dealer to
broker/dealer)?
- correct answer Uniform Practice Code
Which FINRA Rule handles dealing with the public?
- correct answer Conduct Code
Which FINRA Rule deals with violations and complaints?
- correct answer Code of Procedures
Which FINRA Rule deals with settling civil/money disputes?
- correct answer Code of Arbitration
What agency hears alleged complaints of violations of the rules and regulations made by FINRA?
- correct answer FINRA Department of Enforcement (DOE)
In the Code of Procedure, how many total days is between the time a complaint is made and the
hearing?
- correct answer 60days
1) firm has 25 days to answer after complaint is made
2) Second request adds an additional 14 days for response
3) After the 14 additional days FINRA has 21 days to have the hearing
What actions can the FINRA DOE make in the hearing process of the Code of Procedure?
- correct answer 1) Fine
2) Suspend
3) Expel
4) Bar
5) Censure
answers 2024\2025 GradeA+
Broker vs Dealer? Broker:
Acts for...
Acts as...
Paid by...
Risk?
- correct answer Acts for "others"
Acts as "Agent"
Paid by "Commission"
Assumes "No risk"
Broker vs Dealer? Dealer:
Acts for...
Acts as...
Paid by...
Risk?
- correct answer Acts for "self"
Acts as "Principal"
Paid by "Mark-up"
Assumes "Risk"
Who writes the LAWs that affect the securities industry?
- correct answer Securities and Exchange Commission (SEC)
,What ENFORCES the laws created on the securities industry?
- correct answer Self-Regulatory Orginization (SRO)
Sometimes known as, Designated Examining Authority (DEA)
In order for the SROs or DEA to govern you, you must be...
- correct answer A member
What are the different SRO's?
- correct answer 1) Financial Industry Regulatory Authority (FINRA)
2) Municipal Securities Rule Making Board (MSRB)
3) Chicago Board Options Exchange (CBOE)
In order to pay another firm any amount of commission or concessions they must also be a ...
- correct answer Member of FINRA
Which regulatory agency has no enforcing authority? And what are they allowed to do?
- correct answer Municipal Securities Rule Making Board (MSRB)
Make rules and make test questions on those rules.
Which agency is allowed to enforce rules made by MSRB? With what exception?
- correct answer FINRA
Bank dealers are enforced by FDRC or Federal reserve board
What is the designated examining authority for options? Or other exchanges?
- correct answer Chicago Board Options Exchange
Other exchanges are their own designated examining authority (ex. New York Stock Exchange)
What are FINRA's 4 separate categories of regulations?
- correct answer 1) Uniform Practice Code
2) Conduct Code
, 3) Code of Procedures
4) Code of Arbitration
Which FINRA Rule deals with member firms dealing with other member firms (broker/dealer to
broker/dealer)?
- correct answer Uniform Practice Code
Which FINRA Rule handles dealing with the public?
- correct answer Conduct Code
Which FINRA Rule deals with violations and complaints?
- correct answer Code of Procedures
Which FINRA Rule deals with settling civil/money disputes?
- correct answer Code of Arbitration
What agency hears alleged complaints of violations of the rules and regulations made by FINRA?
- correct answer FINRA Department of Enforcement (DOE)
In the Code of Procedure, how many total days is between the time a complaint is made and the
hearing?
- correct answer 60days
1) firm has 25 days to answer after complaint is made
2) Second request adds an additional 14 days for response
3) After the 14 additional days FINRA has 21 days to have the hearing
What actions can the FINRA DOE make in the hearing process of the Code of Procedure?
- correct answer 1) Fine
2) Suspend
3) Expel
4) Bar
5) Censure
