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SIE: Regulations (FINRA Rules) Exam Practice Questions and Answers | 100% Pass
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SIE: Regulations (FINRA Rules) Exam Practice Questions and Answers | 100% Pass What is the U.S. Government agency that has enforcement authority over the U.S. securities markets? - Answer️️ -SEC Both FINRA and the Securities and Exchange Commission (SEC) regulate and have enforcement capa...

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  • September 25, 2024
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  • 2024/2025
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TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024

SIE: Regulations (FINRA Rules) Exam
Practice Questions and Answers | 100%
Pass


What is the U.S. Government agency that has enforcement authority over the U.S.

securities markets? - Answer✔️✔️-SEC




Both FINRA and the Securities and Exchange Commission (SEC) regulate and have

enforcement capability over the U.S. securities markets and market participants.

However, the SEC is a government agency, while FINRA is an SRO - a self-regulatory

organization under SEC oversight.



The Municipal Securities Rulemaking Board is another SRO that creates rules for

municipal market participants, but has no enforcement ability - enforcement of MSRB

rules is performed by FINRA.



The CFTC regulates futures and commodities.

Which of the following is an SRO? - Answer✔️✔️-MSRB




1/48

,TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
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: - Answer✔️✔️-

Futures Market



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.




2/48

,TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
Who does NOT have to be licensed in a broker-dealer? - Answer✔️✔️-Partner who only

provides capital



Passive owners of broker-dealers, who can be officers, are not required to be licensed.

All other officers, traders, and salespersons must be registered and licensed.

Salespersons may be compensated based on which of the following? - Answer✔️✔️-

Trading commissions paid by the brokerage firm to the representative



Broker-dealers earn commissions or mark-ups/mark-downs for execution transactions.

Investment Advisers earn fees for rendering advice.



Compensation cannot be directly paid by the customer to any salesperson. All

compensation must be paid by the salesperson's employer.

To take a second job, under FINRA rules, a registered representative must obtain prior

written approval from (the): - Answer✔️✔️-Branch Manager



For a registered representative to take a second job requires approval of the branch

manager under FINRA rules. The manager is acting for the member firm when doing so.

There is no requirement to get approval from FINRA or the SEC.

What activity undertaken by a registered representative will require written notice to the

firm, along with following the firm's instructions covering this activity? - Answer✔️✔️-

3/48

, TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
Driving for Uber after the markets have closed and securities transactions are not

occurring



Driving for Uber is work for pay - and to take an outside job, the representative must

give notice to the firm, follow the firm's instructions (so if the firm says no, the answer is

no), and must and his or her U4 to show this "OBA" - Outside Business Activity.



Volunteer work for no pay is not an OBA, unless it places the representative in a control

position to direct the management of investment funds. Traveling by a representative

does not have to be reported to the firm. Selling investments, whether proprietary

(meaning products of that firm) or nonproprietary, (meaning products of other securities

issuers) is the job description of a registered representative.

A registered representative at a FINRA member firm has been elected to his

cooperative apartment building's Board of Directors. Which statement is TRUE? -

Answer✔️✔️-This event must be reported to his or her employer



Any "OBA" - Outside Business Activity - must be reported to the firm and must be

approved by the firm. Furthermore, it must be reported on that registered

representative's U4 Form and is disclosed in that individual's BrokerCheck report.




4/48

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