The securities industry's primary regulatory body and created under what act? - ANSWER SEC, Securities Exchange Act of 1934
Function under the SEC's oversight and is accountable to the Commission for enforcing federal securities laws, as well as supervising securities practices within an assigne...
SIE Exam Unit 1 Questions & Answers
The securities industry's primary regulatory body and created under what act? -
ANSWER SEC, Securities Exchange Act of 1934
Function under the SEC's oversight and is accountable to the Commission for enforcing
federal securities laws, as well as supervising securities practices within an assigned
jurisdiction. - ANSWER Self Regulatory organizations (SRO)
what are the largest SROs - ANSWER Financial Industry Regulation Authority (FINRA),
Chicago Board Options Exchange (CBOE), Municipal Securities Rulemaking Board
(MSRB)
Members pay assessments into a general insurance fund that is used to meet customer
claims in the event of a broker-dealer bankruptcy. - ANSWER Securities Investor
Protection Act and Corporation (SIPC)
All BD registered with the SEC must be SIPC members except which three? - ANSWER
1. banks deal with munis, 2. firms deal with US govt securities 3.firms deal with
redeemable investment co securities
has a net worth of $1 million or more or has had an annual income of $200k or more in
each of the two most recent years - ANSWER accredited investor
this type of BD offers all types of investment products ie stocks, bonds, mutual funds,
options, and many others - ANSWER full service BD
this BD incorporates proprietary trading, where they trade in the account of the BD this
is known as what - ANSWER market making
this firm carries customer accounts and accepts funds and securites from customers -
ANSWER carrying firm
this type of BD has the ability to do trade executions, clear and settle transactions, take
custody of customer funds and securities, and handle all back office tasks - ANSWER
carrying firm
carrying firms are required to maintain a higher _____ than that of firms who do not
accept custody of funds or securities - ANSWER net capital
this type of BD must segregate customer funds and securities held in their custody from
the firms capital and securities - ANSWER Carrying firms
this type of BD introduces its customers to a clearing firm - ANSWER fully disclosed or
introducing BD
, an introducing firm may receive customer checks but they must be made out to who -
ANSWER the clearing firm
carrying or clearing firms who clear their own transactions - ANSWER full service BD
investment advisor act of what year - ANSWER 1940
Any entity, individual or institution, willing to accept the risk of holding a particular
security in its own account to facilitate trading and provide liquidity in that security is
known as - ANSWER a market maker or trader
An institution or a person responsible for making all investment, management, and dis-
tribution decisions in an account maintained in the best interests of another is known as
- ANSWER custodian
an introducing firm may recieve customer checks, but they must be made out to who? -
ANSWER the clearing firm
firm sometimes referred to as "full service firms" are also know as what? and what do
they do on their own? - ANSWER carrying or clearing firms, clear their own transactions
this type of account allows a customer, generally an institution, to select one member
firm to provide custody and other services, while other firms handle all trades placed by
the customer - ANSWER prime account
a member firm for a prime acct that provides custody and other services - ANSWER
prime broker
a member firm for a prime acct that handles all trades placed by the customer -
ANSWER executing brokers
for a RR who has been charging commissions for transactions and now wants to charge
separately for investment advice what act would the RR need to register under? and
what exam(s) would need passed? - ANSWER investment advisor act of 1940 and
series 65 or 66
an entity ie corporation or municipality, might offer or propose to offer its securities for
sale to the investing public for the purpose of what? what are these type of entities
called? - ANSWER raising capital, issues of securities
these are groups of BD or investment bankers that work with an issue to bring its
securities to the market and sell them to the investing public - ANSWER underwriters
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