SIE EXAM SCRIPT FINAL PAPER FULL
QUESTIONS AND ANSWERS 2026
◉ FINRA vs MSRB
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
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)
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
Answer: Collects, borrows, spends, and prints money
◉ Roles and Responsibilities of the FED
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)
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
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)
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
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
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
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)
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
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
QUESTIONS AND ANSWERS 2026
◉ FINRA vs MSRB
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
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)
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
Answer: Collects, borrows, spends, and prints money
◉ Roles and Responsibilities of the FED
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)
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
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)
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
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
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
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)
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
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
