SIE EXAM 2024 LATEST UPDATED QUESTIONS AND VERIFIED ANSWERS BY EXPERT GRADED A++
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SIE EXAM 2024 LATEST UPDATED QUESTIONS AND VERIFIED ANSWERS BY EXPERT GRADED A++
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 ...
SIE EXAM 2024 LATEST UPDATED QUESTIONS AND
VERIFIED ANSWERS BY EXPERT GRADED A++
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. 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, 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
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