SIE Exam (Securities Industry Essentials)
– Kaplan Review Notes, FINRA 2026-2027
– Complete exam study guide
Introduction:
This document contains comprehensive Kaplan-based review
notes for the SIE (Securities Industry Essentials) Exam,
covering core concepts such as market structure, securities
offerings, regulatory bodies, order types, settlement, and
investment risks. The material is presented in a clear question-
and-answer format, making it suitable for exam preparation
and quick revision. It is aligned with FINRA SIE exam topics
and is useful as a consolidated study guide for first-time test
takers.
Exam Questions and Answers:
1. over-the-counter market (OTC)Answer:- trades unlisted
stocks and bonds including municipal bonds and treasury debts
that trades in the secondary market
2. third market (nasdaq intermarket)Answer:- a trading
market in which exchange-listed securities are traded in the
OTC market
,3. fourth market (the ECNs)Answer:- -a market for
institutional investors in which large blocks of stock, both
listed and unlisted, trade in transactions unassisted by BDs
-open 24hr a day
4. dark poolsAnswer:- trading that is not openly available to
the public
5. carrying firm (clearing firm / agency)Answer:- an
intermediary between the buy and sell sides in a securities
transaction that receives and delivers payments and securities
6. clearing broker-dealer (carrying broker)Answer:- a
broker-dealer that clears its own trades as well as those of
introducing (correspondent) brokers
7. fully disclosed (introducing) firmsAnswer:- acts as the
introducing firm's back oflce - they do not have the ability to
execute trades for its customers
8. prime accountAnswer:- allows a customer to select one
member firm to provide custody and other services
9. transfer agent is responsible forAnswer:- -ensuring
securities are issued in the correct owner's name
-canceling old and issuing new certificates
-maintaining records of ownership
-handling problems relating to lost, stolen, or destroyed
certificates
, 10. registrarsAnswer:- licensed by the states and provide
audit and oversight services for the transfer agents
11. depository trust and clearing corporation
(DTCC)Answer:- the world's largest securities depository
12. market makerAnswer:- a dealer in the OTC market that
maintains an inventory in a stock and provides liquidity for
customers seeking to buy and sell the security
13. bullAnswer:- when a person believes that a given market
or stock is likely to go up in value
14. bearAnswer:- when a person believes that a given market
or stock is going to go down in value
15. bidAnswer:- the highest amount someone is willing to pay
for the security
16. sizeAnswer:- the number of shares that someone is
willing to buy at the bid in round lots (100 shares)
17. ask (or offer)Answer:- the lowest amount someone is
currently willing to sell the security for
18. inside market (inside quote)Answer:- the highest bid and
lowest ask
19. market orderAnswer:- executed immediately at the best
available market price
– Kaplan Review Notes, FINRA 2026-2027
– Complete exam study guide
Introduction:
This document contains comprehensive Kaplan-based review
notes for the SIE (Securities Industry Essentials) Exam,
covering core concepts such as market structure, securities
offerings, regulatory bodies, order types, settlement, and
investment risks. The material is presented in a clear question-
and-answer format, making it suitable for exam preparation
and quick revision. It is aligned with FINRA SIE exam topics
and is useful as a consolidated study guide for first-time test
takers.
Exam Questions and Answers:
1. over-the-counter market (OTC)Answer:- trades unlisted
stocks and bonds including municipal bonds and treasury debts
that trades in the secondary market
2. third market (nasdaq intermarket)Answer:- a trading
market in which exchange-listed securities are traded in the
OTC market
,3. fourth market (the ECNs)Answer:- -a market for
institutional investors in which large blocks of stock, both
listed and unlisted, trade in transactions unassisted by BDs
-open 24hr a day
4. dark poolsAnswer:- trading that is not openly available to
the public
5. carrying firm (clearing firm / agency)Answer:- an
intermediary between the buy and sell sides in a securities
transaction that receives and delivers payments and securities
6. clearing broker-dealer (carrying broker)Answer:- a
broker-dealer that clears its own trades as well as those of
introducing (correspondent) brokers
7. fully disclosed (introducing) firmsAnswer:- acts as the
introducing firm's back oflce - they do not have the ability to
execute trades for its customers
8. prime accountAnswer:- allows a customer to select one
member firm to provide custody and other services
9. transfer agent is responsible forAnswer:- -ensuring
securities are issued in the correct owner's name
-canceling old and issuing new certificates
-maintaining records of ownership
-handling problems relating to lost, stolen, or destroyed
certificates
, 10. registrarsAnswer:- licensed by the states and provide
audit and oversight services for the transfer agents
11. depository trust and clearing corporation
(DTCC)Answer:- the world's largest securities depository
12. market makerAnswer:- a dealer in the OTC market that
maintains an inventory in a stock and provides liquidity for
customers seeking to buy and sell the security
13. bullAnswer:- when a person believes that a given market
or stock is likely to go up in value
14. bearAnswer:- when a person believes that a given market
or stock is going to go down in value
15. bidAnswer:- the highest amount someone is willing to pay
for the security
16. sizeAnswer:- the number of shares that someone is
willing to buy at the bid in round lots (100 shares)
17. ask (or offer)Answer:- the lowest amount someone is
currently willing to sell the security for
18. inside market (inside quote)Answer:- the highest bid and
lowest ask
19. market orderAnswer:- executed immediately at the best
available market price
