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FINRA SIE EXAM 219 Questions with Verified Answers 2024,100% CORRECT
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FINRA SIE EXAM 219 Questions with Verified Answers 2024
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FINRA SIE EXAM 219 Questions with Verified Answers 2024Federal Reserve Board - CORRECT ANSWER 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 - CORRECT ANSWER 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 - CORRECT ANSWER 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) - CORRECT ANSWER 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 - CORRECT ANSWER Collects, borrows, spends, and
prints money
Roles and Responsibilities of the FED - CORRECT ANSWER 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) - CORRECT ANSWER 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 - CORRECT ANSWER 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) - CORRECT
ANSWER 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 - CORRECT ANSWER 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 - CORRECT ANSWER 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 - CORRECT ANSWER 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) - CORRECT ANSWER 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 - CORRECT ANSWER $500,000 per customer of which no more than
$250,000 in cash per account. (only the equity in margin accounts, not the full
market value). Some examples include Joint Accounts, Corporate accounts,
Individual accounts, Trust Accounts, Roth IRAs and Traditional IRAs, Accounts held
by a legal guardian or estate executor.
Penny Stock Reform Act of 1990 - CORRECT ANSWER regulates the solicited sales
of certain low-priced securities to potential new customers. A penny stock is a
stock that trades below 5$ a share or stocks that don't meet the NYSE official
listing standards.
Insider Trading and Securities Fraud Enforcement Act of 1988 (ITSFEA) - CORRECT
ANSWER The act aims to increase the liability penalties to all involved parties for
insider trading.
The Investment Company Act of 1940 - CORRECT ANSWER 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 - CORRECT ANSWER A federal law
that places restrictions on telephone solicitation of business.
Financial Industry Regulatory Authority (FINRA) - CORRECT ANSWER a self-
regulatory organization and the largest non-governmental regulator of securities
firms in the US; registers and provides qualification exams to industry
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