Unit 1- SIE Exam- Unit 1 (Knowledge of
Capital Markets) With Complete
Solutions.
SEC- - Answer Securities and exchange commission is the securities industry's primary
regulatory body.
Which act created the SEC? - Answer The securities exchange act of 1934
What is the purpose of registering with the SEC - Answer If you conduct securities business
with either customers or broker dealers; you must be apply and be approved for registration
with the SEC
Additional role of the SEC - Answer It regulates all exchanges and trading markets
Under the Uniform Securities act, registrations must be renewed how frequently? - Answer
Annually
The statement "These securities have not been approved or disapproved nor have any
representations been made about the accuracy or the adequacy of the information" is found
where - Answer Commonly known as the Securities and Exchange Commission's disclaimer,
the SEC mandates that it be found in the final prospectus.
What happens a when a broker dealer does not comply with SEC rules - Answer Censure,
limits on activities, functions, or operations.
Suspension or revocation of registration
Fine
Self Regulatory Organizations (SROs) - Answer Function under SEC's oversight. Each SRO is
accountable to the commission for enforcing federal securities as well as supervising securities
practices within assigned jurisdiction (FINRA, CBOE, MSRB)
FINRA - Answer Financial Industry Regulatory Authority- More or less they regulate all matters
related to investment banking (securities underwriting, trading in the OTC Market, trading in
NYSE-listed securities and conduct of their member firms
Purpose and objective of FINRA - Answer 1. Promote the investment banking and securities
business
, 2.promote high standards of commercial honor
3. Provide a medium for communication among its members and between members, the
govt/other agencies
4. Enforce rules to prevent fraud and manipulative practices
CBOE - Answer Chicago Board options exchange- regulates all matters related to trading
standarized options and related contracts listed on that exchange
MSRB - Answer Municipal securities Rulemaking Board- Regulates all matters related to the
underwriting and trading of state and municipal securities. Regulates but does not enforce,
that's where other SROs like FINRA come in.
Dept of treasury - Answer Oversee the collection of taxes. This dept is administered by the
secretary of the treasury
IRS - Answer Internal Revenue service- Collects taxes and enforces tax laws
NASAA - Answer North American Securities Administrators association-
This is a voluntary association whose members provide their unique insight to the SEC and SROS
as they move forward in the rulemaking process.
Advocates for pro-investors policies, offer resources to its communities.
Federal Reserve board - Answer Consists of 12 regional federal reserve banks and hundreds of
national and state banks that belong to the system.
What is the role of FRB - Answer The federal reserve board
1. acts as an agent of the U.S treasury
2.Regulates the U.S money supply
3.Supervise the printing of currency
4. Make sure members are compliant with federal regulations
Which act created the SIPC - Answer Securities Investor Protection Corp. was created under
the securities investor protection act of 1970
SIPC - Answer Securities Investor Protection Corp- is a nonprofit membership organization.
protects the clients of brokerage firms that are forced into bankruptcy.
Capital Markets) With Complete
Solutions.
SEC- - Answer Securities and exchange commission is the securities industry's primary
regulatory body.
Which act created the SEC? - Answer The securities exchange act of 1934
What is the purpose of registering with the SEC - Answer If you conduct securities business
with either customers or broker dealers; you must be apply and be approved for registration
with the SEC
Additional role of the SEC - Answer It regulates all exchanges and trading markets
Under the Uniform Securities act, registrations must be renewed how frequently? - Answer
Annually
The statement "These securities have not been approved or disapproved nor have any
representations been made about the accuracy or the adequacy of the information" is found
where - Answer Commonly known as the Securities and Exchange Commission's disclaimer,
the SEC mandates that it be found in the final prospectus.
What happens a when a broker dealer does not comply with SEC rules - Answer Censure,
limits on activities, functions, or operations.
Suspension or revocation of registration
Fine
Self Regulatory Organizations (SROs) - Answer Function under SEC's oversight. Each SRO is
accountable to the commission for enforcing federal securities as well as supervising securities
practices within assigned jurisdiction (FINRA, CBOE, MSRB)
FINRA - Answer Financial Industry Regulatory Authority- More or less they regulate all matters
related to investment banking (securities underwriting, trading in the OTC Market, trading in
NYSE-listed securities and conduct of their member firms
Purpose and objective of FINRA - Answer 1. Promote the investment banking and securities
business
, 2.promote high standards of commercial honor
3. Provide a medium for communication among its members and between members, the
govt/other agencies
4. Enforce rules to prevent fraud and manipulative practices
CBOE - Answer Chicago Board options exchange- regulates all matters related to trading
standarized options and related contracts listed on that exchange
MSRB - Answer Municipal securities Rulemaking Board- Regulates all matters related to the
underwriting and trading of state and municipal securities. Regulates but does not enforce,
that's where other SROs like FINRA come in.
Dept of treasury - Answer Oversee the collection of taxes. This dept is administered by the
secretary of the treasury
IRS - Answer Internal Revenue service- Collects taxes and enforces tax laws
NASAA - Answer North American Securities Administrators association-
This is a voluntary association whose members provide their unique insight to the SEC and SROS
as they move forward in the rulemaking process.
Advocates for pro-investors policies, offer resources to its communities.
Federal Reserve board - Answer Consists of 12 regional federal reserve banks and hundreds of
national and state banks that belong to the system.
What is the role of FRB - Answer The federal reserve board
1. acts as an agent of the U.S treasury
2.Regulates the U.S money supply
3.Supervise the printing of currency
4. Make sure members are compliant with federal regulations
Which act created the SIPC - Answer Securities Investor Protection Corp. was created under
the securities investor protection act of 1970
SIPC - Answer Securities Investor Protection Corp- is a nonprofit membership organization.
protects the clients of brokerage firms that are forced into bankruptcy.
