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SIE REGULATIONS FINRA RULES part 1 Exam 30 Questions with Verified Answers,100% CORRECT
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SIE REGULATIONS FINRA RULES part 1 Exam 30 Questions with Verified Answers
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SIE REGULATIONS FINRA RULES part 1 Exam 30 Questionswith Verified Answers
All of the following statements are true regarding the U.S. securities markets
EXCEPT:
A
The Federal Reserve Board decides which securities can be traded on margin
B
FINRA has regulatory authority over the U.S. securities markets and market
participants in the trading of all non-exempt securities
C
The Securities and Exchange Commission has regulatory authority over the U.S.
securities market and market participants
D
The MSRB has regulatory authority over the U.S securities markets and market
participants in the trading of all exempt securities - CORRECT ANSWER D
Both FINRA and the SEC regulate the U.S. securities markets. FINRA is the SRO
(Self Regulatory Organization) that regulates the markets under SEC oversight.
The Federal Reserve decides which securities are marginable, since it has power
over margin rules given under the Securities Exchange Act of 1934.
The MSRB only write regulations covering the trading of municipal bonds - not
U.S. Government or Agency bonds - so the statement that the MSRB regulates
trading in all exempt securities is untrue.
Which of the following is an SRO?
A
MSRB
,B
SEC
C
SIPC
D
FDIC - CORRECT ANSWER A
Both FINRA and the MSRB are SROs - self-regulatory organizations under SEC
oversight. The MSRB write rules for municipal market participants, but it does not
enforce those rules. Enforcement of MSRB rules is performed by FINRA for
broker-dealers.
SIPC is the Securities Investor Protection Corporation, which insures customer
accounts at broker-dealers from B/D failure.
FDIC (Federal Deposit Insurance Corporation) insures customer accounts at banks
from bank failure.
FINRA enforces regulations in all of the following markets EXCEPT:
A
First Market
B
Second Market
C
Third Market
D
Futures Market - CORRECT ANSWER D
FINRA is the regulator for all of the securities markets - the Primary Market (new
issues); the First Market (trades on exchanges); the Second Market (OTC trades of
non-exchange listed securities); the Third Market (OTC trades of exchange listed
issues) and the Fourth Market (direct trading between institutions on ECNs and
ATSs).
FINRA has no regulatory authority over the futures markets - that function is
performed by the CFTC - the Commodities Futures Trading Commission.
, The SIE Exam allows an individual to:
A
perform the functions of a registered representative with the exception of
solicitation of potential clients
B
sell securities that are either issued or guaranteed by the U.S. Government or its
wholly-owned agencies
C
become licensed upon passing the appropriate representative qualification exam
D
only sell redeemable securities of investment companies registered under the
Investment Company Act of 1940 - CORRECT ANSWER C
The SIE is a "corequisite exam." In order to be licensed as a registered
representative, the SIE must be passed; and the appropriate representative
qualification exam must be passed (e.g., Series 6 or Series 7).
5. Who does NOT have to be licensed in a broker-dealer?
A
Chief Executive Officer
B
Chairman of the Board of Directors
C
Chief Financial Officer
D
Chief Compliance Officer - CORRECT ANSWER B
Only operating officers of broker-dealers must be registered - this would include
the CEO, CFO and CCO. A member of the Board of Directors is not required to be
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