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SIE EXAM 2024 Questions and Answers (100% Pass)
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SIE EXAM 2024 Questions and Answers (100% Pass)
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©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AMSIE EXAM 2024 Questions and Answers (100% Pass)
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.
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,©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AM
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 (NASAA) - ✔️✔️Established in
1919 in Kansas, 67 securities administrators from all over North 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,
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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).
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 1988 (ITSFEA) - ✔️✔️The act
aims to increase the liability penalties to all involved parties for insider 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.
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