SIE Study Guide Questions and Answers
Rated A+
Section 1: Knowledge of Capital Markets
What is the mission of the SEC?
To safeguard investors, uphold fair and efficient markets, and aid in the formation of capital
When was the SEC founded?
It was established by Congress in 1934...
1 SIE Study Guide Questions and Answers Rated A+ Section 1: Knowledge of Capital Markets ✔✔ What is the mission of the SEC? ✔✔ To safeguard investors, uphold fair and efficient markets, and aid in the formation of capital When was the SEC founded? ✔✔ It was established by Congress in 1934 Under whose jurisdiction does the SEC fall? ✔✔ It operates under the US federal government What powers does the SEC possess? ✔✔ It enforces federal securities laws and formulates regulations for the securities sector What are Self -Regulatory Organizations (SROs)? 2 ✔✔ Entities created to oversee and regulate specific industries and professions by establishing rules to ensure order, complementing existing laws and government regulations Which is the largest SRO? ✔✔ FINRA (Financial Industry Regulatory Authority) What is the CBOE, and what is its role ? ✔✔ The Chicago Board Options Exchange, which originated the VIX index and is recognized for listing and trading options, making it the largest options market What does FINRA oversee? ✔✔ FINRA licenses and regulates broker -dealers, audits securities deal ers and associated firms, ensures compliance with regulations, formulates and enforces rules for broker -dealers, and oversees the trading of corporate equities, bonds, securities futures, and options Is FINRA a part of the government? ✔✔ No, FINRA is an i ndependent, non -governmental organization and the largest SRO What does the MSRB do? 3 ✔✔ The Municipal Securities Rulemaking Board sets and governs rules for municipal securities in the US, with oversight from its Board of Directors, and works in conjuncti on with FINRA What is the function of the Department of Treasury and the IRS? ✔✔ The Department of Treasury handles federal finances by collecting taxes, paying bills, managing currency, government accounts, and public debt. The IRS, a branch of the US government, collects the majority of federal taxes and administers tax laws and regulations What duties do State Regulators perform? ✔✔ State Regulators manage public services and utilities, insurance and annuities, banking, corporate information, and consumer protection at the state and local levels NASAA what is it? ✔✔North American Securities Administrators Association oldest international investor protection organization (a stat e regulator) 4 The Federal Reserve fiscal or monetary policy? composed of? when tighten policy? ✔✔the central bank of the United States control inflation/encourage employment, responsible for clearing checks & supplying currency, most important to loan $ t o other banks & set interest rates, make bank reserve requirements independent body (meaning looks after broader interests rather than for ones own political interests) lower rate= more money borrowed= more money in circulation BOG (board of governors) , 12 fed reserve banks, fed open market committee (FOMC=set monetary policy) when inflation is too high Which laws does the SEC enforce?
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