SIE EXAM 2026-2027
Federal Reserve Board Founded on December 23rd 1913, to oversee financial panics. Independent of
direct political influence. Federal Reserve Act was passed to stabilize prices,
maximize employment, moderate long term interest.
FINRA vs MSRB FINRA oversees brokerage firms and their associated persons.
MSRB- regulates the municipal securities market including dealers, municipal
advisers, and issuers.
Municipal Securities Rulemaking Board
Structure of the Fed The Board of Governors/The Federal Open Market Commitee/ Twelve Regional
Federal Reserve Banks/Member banks throughout the United States. Made up of
the Federal Reserve Board FRB which is appointed by the US president and 12
regional Federal Reserve Banks which supervise private commercial banks.
FOMC (Federal Open Market Committee) a body that consists of the seven members of the board of governors and the
twelve presidents of the regional Federal Reserve Banks. Not all of the twelve
presidents have a vote at any given time.
Department of the Treasury Collects, borrows, spends, and prints money
Roles and Responsibilities of the FED Strengthening the US standing in the World Economy/ Maintaining a balance
between the private interests of banks and the centralized responsibilities of the
government, including supervising and protecting the credit rights of consumers/
ensuring the financial system's stability and mitigating systemic risk within the
financial markets.
Federal Deposit Insurance Corporation (FDIC) an agency created in 1933 to insure individuals' bank accounts, protecting
people against losses due to bank failures. Extends to checking and saving
accounts, money market accounts, Certificates of Deposit, and IRAs but not
annuities, mutual funds, life insurance policies, bonds or stocks. Covers up to
250,000 dollars per individual.
State (Blue-Sky) Regulation Established under the Uniform Securities Act (USA) - Each state has the
authority to impose additional requirements for both issuers and financial
intermediaries. Requires that private investment funds register in their home
state and every state where they conduct business.
North American Securities Administrators Association Established in 1919 in Kansas, 67 securities administrators from all over North
(NASAA) America are responsible for licensing securities firms, investment professionals,
and other tasks. Protects clients who seek investment advice or deal with
securities such as a small business who wants to review financial offerings .
Securities Act of 1933 The first major law regarding the sale of securities. It required that companies
register their securities sold to the public with the SEC and that investment
bankers must provide full and accurate information related to new securities
issues to potential investors. Stipulates that companies must provide a
description of the security being offered, description of the company's business
and properties, and Financial statements that have been certified by independent
accountants.
Securities Exchange Act of 1934 An act that regulates the trading of securities such as stocks and bonds in the
secondary market. Purpose was to promote financial transparency and accuracy
while reducing the incidence of fraud and market manipulation. Established the
SEC led by five commissioners appointed by the president. These five are split
into divisions including division of trading and markets, investment management,
corporation finance, enforcement, economic and risk analysis.
Investment Advisers Act of 1940 Legislation governing who must register with the SEC as an investment adviser.
Prohibits advisers from engaging in front-running and churning practices. Entities
that are excluded are Banks and bank holding companies, Lawyers,
accountants, engineers, and teachers, Brokers and dealers, Publishers,
Government securities advisers, credit rating agencies, family offices.
Securities Investors Protection Act (SIPA) Non-profit organization established by Congress to safeguard the customers of
brokerage firms that become insolvent by utilizing multiple bodies including the
SEC, self-regulating organizations, and the securities investor protection
corporation (SIPC).
, SIE EXAM 2026-2027
SIPC Coverage $500,000 per customer of which no more than $250,000 in cash per account.
(only the equity in margin accounts, not the full market value). Some examples
include Joint Accounts, Corporate accounts, Individual accounts, Trust Accounts,
Roth IRAs and Traditional IRAs, Accounts held by a legal guardian or estate
executor.
Penny Stock Reform Act of 1990 regulates the solicited sales of certain low-priced securities to potential new
customers. A penny stock is a stock that trades below 5$ a share or stocks that
don't meet the NYSE official listing standards.
Insider Trading and Securities Fraud Enforcement Act of The act aims to increase the liability penalties to all involved parties for insider
1988 (ITSFEA) trading.
The Investment Company Act of 1940 Its chief aim is to safeguard investors by making them aware of the risks of
purchasing and holding securities.
Telephone Consumer Protection Act of 1991 A federal law that places restrictions on telephone solicitation of business.
Financial Industry Regulatory Authority (FINRA) a self-regulatory organization and the largest non-governmental regulator of
securities firms in the US; registers and provides qualification exams to industry
professionals, writes rules for trading, educates the investing public, provides
trade reporting, resolves disputes between customers and firms
Important FINRA rules Rule 2266 - SIPC Info, this rule requires SIPC member firms to provide written
notice to customers about SIPC protections.
Rule 2269- Disclosure of Participation or Interest in Primary or Secondary
Distribution, rule requires firm to disclose any participation or interest in a primary
or secondary distribution of securities to customers.
Rule 5250- Payments for Market Making, prohibits firms from accepting
payments from issuers or promoters.
Uniform Practice Code (UPC) It standardizes practices, customs, trading techniques, and operational and
settlement issues as much as possible. Such as Trade terms, payment and
delivery, dividend and interest payments, reclamations, exchange of
confirmations.
Code of Procedure (COP) FINRA's formal procedure for handling trade practice complaints involving
violations of the Conduct Rules. The Department of Enforcement is the first body
to hear and judge complaints.
Municipal Securities Rulemaking Board (MSRB) A self-regulatory organization that regulates the issuance and trading of
municipal securities. The Board functions under the Securities and Exchange
Commission's supervision; it has no enforcement powers. Related item(s):
Securities Acts Amendments of 1975.
Chicago Board Options Exchange (CBOE) regulates all matters related to trading standardized options and related contracts
listed on that exchange. Does not trade US and European Stocks or International
exchange products directly.
Investors Can Invest in mutual funds, bonds, stocks, ETFs, foreign exchange, precious
metals like silver and gold, and real estate.
Venture Capitalists invest in start-ups and small businesses. Seek an equity stake in return for their
investment and help grow the company
Angel Capitalists Provide capital to entrepreneurs and start-ups when the risk is high, i.e., in the
early stages
Federal Reserve Board Founded on December 23rd 1913, to oversee financial panics. Independent of
direct political influence. Federal Reserve Act was passed to stabilize prices,
maximize employment, moderate long term interest.
FINRA vs MSRB FINRA oversees brokerage firms and their associated persons.
MSRB- regulates the municipal securities market including dealers, municipal
advisers, and issuers.
Municipal Securities Rulemaking Board
Structure of the Fed The Board of Governors/The Federal Open Market Commitee/ Twelve Regional
Federal Reserve Banks/Member banks throughout the United States. Made up of
the Federal Reserve Board FRB which is appointed by the US president and 12
regional Federal Reserve Banks which supervise private commercial banks.
FOMC (Federal Open Market Committee) a body that consists of the seven members of the board of governors and the
twelve presidents of the regional Federal Reserve Banks. Not all of the twelve
presidents have a vote at any given time.
Department of the Treasury Collects, borrows, spends, and prints money
Roles and Responsibilities of the FED Strengthening the US standing in the World Economy/ Maintaining a balance
between the private interests of banks and the centralized responsibilities of the
government, including supervising and protecting the credit rights of consumers/
ensuring the financial system's stability and mitigating systemic risk within the
financial markets.
Federal Deposit Insurance Corporation (FDIC) an agency created in 1933 to insure individuals' bank accounts, protecting
people against losses due to bank failures. Extends to checking and saving
accounts, money market accounts, Certificates of Deposit, and IRAs but not
annuities, mutual funds, life insurance policies, bonds or stocks. Covers up to
250,000 dollars per individual.
State (Blue-Sky) Regulation Established under the Uniform Securities Act (USA) - Each state has the
authority to impose additional requirements for both issuers and financial
intermediaries. Requires that private investment funds register in their home
state and every state where they conduct business.
North American Securities Administrators Association Established in 1919 in Kansas, 67 securities administrators from all over North
(NASAA) America are responsible for licensing securities firms, investment professionals,
and other tasks. Protects clients who seek investment advice or deal with
securities such as a small business who wants to review financial offerings .
Securities Act of 1933 The first major law regarding the sale of securities. It required that companies
register their securities sold to the public with the SEC and that investment
bankers must provide full and accurate information related to new securities
issues to potential investors. Stipulates that companies must provide a
description of the security being offered, description of the company's business
and properties, and Financial statements that have been certified by independent
accountants.
Securities Exchange Act of 1934 An act that regulates the trading of securities such as stocks and bonds in the
secondary market. Purpose was to promote financial transparency and accuracy
while reducing the incidence of fraud and market manipulation. Established the
SEC led by five commissioners appointed by the president. These five are split
into divisions including division of trading and markets, investment management,
corporation finance, enforcement, economic and risk analysis.
Investment Advisers Act of 1940 Legislation governing who must register with the SEC as an investment adviser.
Prohibits advisers from engaging in front-running and churning practices. Entities
that are excluded are Banks and bank holding companies, Lawyers,
accountants, engineers, and teachers, Brokers and dealers, Publishers,
Government securities advisers, credit rating agencies, family offices.
Securities Investors Protection Act (SIPA) Non-profit organization established by Congress to safeguard the customers of
brokerage firms that become insolvent by utilizing multiple bodies including the
SEC, self-regulating organizations, and the securities investor protection
corporation (SIPC).
, SIE EXAM 2026-2027
SIPC Coverage $500,000 per customer of which no more than $250,000 in cash per account.
(only the equity in margin accounts, not the full market value). Some examples
include Joint Accounts, Corporate accounts, Individual accounts, Trust Accounts,
Roth IRAs and Traditional IRAs, Accounts held by a legal guardian or estate
executor.
Penny Stock Reform Act of 1990 regulates the solicited sales of certain low-priced securities to potential new
customers. A penny stock is a stock that trades below 5$ a share or stocks that
don't meet the NYSE official listing standards.
Insider Trading and Securities Fraud Enforcement Act of The act aims to increase the liability penalties to all involved parties for insider
1988 (ITSFEA) trading.
The Investment Company Act of 1940 Its chief aim is to safeguard investors by making them aware of the risks of
purchasing and holding securities.
Telephone Consumer Protection Act of 1991 A federal law that places restrictions on telephone solicitation of business.
Financial Industry Regulatory Authority (FINRA) a self-regulatory organization and the largest non-governmental regulator of
securities firms in the US; registers and provides qualification exams to industry
professionals, writes rules for trading, educates the investing public, provides
trade reporting, resolves disputes between customers and firms
Important FINRA rules Rule 2266 - SIPC Info, this rule requires SIPC member firms to provide written
notice to customers about SIPC protections.
Rule 2269- Disclosure of Participation or Interest in Primary or Secondary
Distribution, rule requires firm to disclose any participation or interest in a primary
or secondary distribution of securities to customers.
Rule 5250- Payments for Market Making, prohibits firms from accepting
payments from issuers or promoters.
Uniform Practice Code (UPC) It standardizes practices, customs, trading techniques, and operational and
settlement issues as much as possible. Such as Trade terms, payment and
delivery, dividend and interest payments, reclamations, exchange of
confirmations.
Code of Procedure (COP) FINRA's formal procedure for handling trade practice complaints involving
violations of the Conduct Rules. The Department of Enforcement is the first body
to hear and judge complaints.
Municipal Securities Rulemaking Board (MSRB) A self-regulatory organization that regulates the issuance and trading of
municipal securities. The Board functions under the Securities and Exchange
Commission's supervision; it has no enforcement powers. Related item(s):
Securities Acts Amendments of 1975.
Chicago Board Options Exchange (CBOE) regulates all matters related to trading standardized options and related contracts
listed on that exchange. Does not trade US and European Stocks or International
exchange products directly.
Investors Can Invest in mutual funds, bonds, stocks, ETFs, foreign exchange, precious
metals like silver and gold, and real estate.
Venture Capitalists invest in start-ups and small businesses. Seek an equity stake in return for their
investment and help grow the company
Angel Capitalists Provide capital to entrepreneurs and start-ups when the risk is high, i.e., in the
early stages
