SIE Exam Lesson 13: FINRA Registration Questions and Answers 100% Pass

SIE Exam Lesson 13: FINRA Registration Questions and Answers 100% Pass What entities does the SEC regulate? - ️️ Correct-FINRA, MSRB, Federal Covered Investment Advisors Who does FINRA regulate? - ️️ Correct-Broker Dealers & Registered Reps Who does the MSRB regulate? Does the MSRB enforce its own rules? - ️️ Correct- Municipal securities firms and their professionals, but not the issuers of Muni securities. Enforcement and inspection for compliance with MSRB rules is done by the SEC and FINRA for brokerage firms and by the FRB, FDIC, and the Office of the Comptroller of the Currency for dealer banks. Explain the registered rep registration process - ️️ Correct-Must first take the SIE Exam, then you can get hired and fill out a u4 form. After this you take a series exam depending on which area of finance you are going into. Then you become a registered rep. What is U4? - ️️ Correct-U4 associates you with a firm. It details information about employment history, educational background, residential history, fingerprints, etc TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 2/10 Also has information about self reported customer complaints, certain legal litagation, etc What is U5? - ️️ Correct-A form you fill out after you have been terminated / leave a firm. Includes reason for termination. After you fill out your U5, you fill out a U4 if you go on to join another firm How long are you allowed to be away from a FINRA affiliated firm before your SIE credential expires? - ️️ Correct-4 years How long are you allowed to be away from a FINRA affiliated firm before your top-off series exam credential(s) expires? - ️️ Correct-2 years What is BrokerCheck? - ️️ Correct-A database that contains background information like registration, employment, disciplinary history on all brokers, advisers, and investment firms that are regulated by FINRA. Contains employment history, licensing info, complaints. Brokers must give annual notification to customers about BrokerCheck hotline, FINRA website. Also contains information on Bankruptcy proceedings within the last 10 years TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 3/10 What is statutory disqualification and how does one receive that title? - ️️ Correct- Statutory disqualification prevents a person or firm from becoming registered with FINRA. A statutory disqualification occurs if the individual has been convicted for a felony or a securities related misdemeanor within the past 10 years. Not that an arrest does not automatically result in a statutory disqualification, only a convicted felony. What is the continuing education protocol for RRs? - ️️ Correct-Regulatory Element: 120 days after the 2nd anniversary of getting registered and every 3 years thereafter, the RR has to complete FINRA provided material. Firm Element: The Firm Element requirement applies to all registered persons who have direct contact with customers or who supervise those persons that do. "Customers" include retail, institutional and investment banking customers, but not other broker-dealers. Firm element may be delivered in a variety of formats, provided the content and the delivery meet the educational needs of the firm's covered persons. What happens if a RR fails to maintain CE? - ️️ Correct-They face CE Inactive Status. Therefore ,they cannot engage in compensation for any activities that require securities registration. What are IAs? - ️️ Correct-Defined in the Investment Advisors act of 1940. Investment Advisory Firms. They are in the business of providing securities related advice in TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 4/10 exchange for compensation. These firms are different than BDs -- they do not sell brokerage / securities execution. What are IARs? - ️️ Correct-Investment Advisors act of 1940. Investment Advisory Representatives. They are the actual individuals who work at IAs and provide the advice. What RIAs only have to register withe the state? - ️️ Correct-Small advisers (less than $100MM AUM) What RIAs have to register with the SEC? - ️️ Correct-Large advisers (over $100MM AUM) Who do IARs have to register with? - ️️ Correct-They must have to register with the State, regardless of the size of their RIA What are SROs? - ️️ Correct-Self Regulatory Organizations that provide investor protection and promote market integrity. These are agencies like FINRA, MSRB that are regulated by the SEC. Parking a registration - ️️ Correct-- Firms may not maintain, or park, any person's registration unless it is for bona fide business purposes pre-dispute arbitration - ️️ Correct-An agreement that comes with form U4. Requires future disputes between the firm and RR to be settled through arbitration rather court. The rep gives up the right to sue and right to trial by jury except for special cases like disputes relating to discrimination or sexual harrasement. **All decisions rendered in an TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 5/10 arbitration case are considered final and binding on all parties. Customers must consent in writing to the use of arbitration as a means of resolving disputes. Do you have be hired by a firm to take the SIE? - ️️ Correct-No. The test result is valid for 4 years. If you have passed a series exam before the SIE is offered, you don't have to take the SIE unless you become unregistered. Registered principal - ️️ Correct-These are people higher up than RRs. An associated person of a member firm who manages or supervises the firm's investment banking or securities business. This includes any individual who trains associated persons and who solicits business. They might manage a BD's securities business, compliance efforts, or simply oversee a financial institution's operations. Registered principals are in many cases legally liable for mistakes, misdeeds or other trouble in their firms. For these reasons, they must take other administrative steps to actually get licensed Amended U4 Form - ️️ Correct-When a significant event occurs involving a RR, the firm must update their U4 via an amended U4 Form to ensure the CRD contains up to date information. Events that call for an amended u4 include regulatory action against the RR, customer complaints, criminal activites, bankruptcies, new address update etc. Central Registration Depository (CRD) - ️️ Correct-A computeri