Practice Test GeeksSIE - Securities Industry Essentials Practice Test
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Regulatory Framework Flashcards

7 cards from real SIE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Which of the following is required to be disclosed in a prospectus under SEC rules?

    Answer: Risk factors associated with the investment

    A prospectus must disclose material risk factors so investors can make informed decisions about the securities offering.

  2. The Securities Exchange Act of 1934 created the SEC and primarily regulates:

    Answer: Secondary market trading and broker-dealers

    The Securities Exchange Act of 1934 governs secondary market trading, broker-dealers, exchanges, and established the SEC.

  3. A customer who has a complaint against a broker-dealer may seek arbitration through:

    Answer: FINRA's dispute resolution forum

    FINRA operates a dispute resolution forum where investors can bring arbitration or mediation claims against broker-dealers.

  4. Under Regulation S-P, broker-dealers must provide customers with a privacy notice:

    Answer: Annually and at account opening

    Regulation S-P requires financial institutions to deliver privacy notices at account opening and annually thereafter.

  5. A tombstone advertisement for a new securities offering is permitted during the waiting period because it:

    Answer: Is limited to basic factual information and directs investors to the prospectus

    Tombstone ads are permitted during the cooling-off period because they only provide limited factual information and direct readers to obtain a prospectus.

  6. Which entity sets the pattern day trader rule requiring a minimum equity of $25,000?

    Answer: FINRA

    FINRA Rule 4210 establishes the pattern day trader requirement of maintaining at least $25,000 in equity for accounts that day-trade frequently.

  7. The Municipal Securities Rulemaking Board (MSRB) has rulemaking authority over:

    Answer: Municipal securities dealers and advisors

    The MSRB creates rules for broker-dealers and municipal advisors who deal in municipal securities, though it relies on FINRA and the SEC for enforcement.