The SEC's Authority Reaches Every SRO

2 questions on this screen, from this outline item's own pool, so some will test a rule you met earlier in the unit. Pick an answer, say how sure you are, then reveal. Being sure and wrong is the most useful thing that can happen here, and the coach treats it that way.

Question 1Exam level

Which act of Congress created the Securities and Exchange Commission itself?

A. The Securities Act of 1933 B. The Securities Exchange Act of 1934 C. The Investment Company Act of 1940 D. The Trust Indenture Act of 1939

How sure are you?

Sure Fairly sure Guessing

Correct: B. The 1934 Act governs the trading markets and the people in them, and it is the act that creates the SEC itself.

A. The 1933 Act governs new issues and the registration statement an issuer files; it does not create the SEC.

C. The 1940 Act regulates investment companies, well after the SEC already existed.

D. The 1939 Act governs bond indentures, not the SEC's own creation.

Unit: SIE outline 1.1.1

Question 2Exam level

Which two tiers make up U.S. securities regulation, as the outline frames it?

A. The SEC only, with no other layer B. A federal agency, the SEC, and industry-funded SROs beneath it C. FINRA and the MSRB, with the SEC operating beneath them D. State regulators and federal regulators, with no industry layer at all

How sure are you?

Sure Fairly sure Guessing

Correct: B. The SEC is the federal agency at the top; FINRA, the MSRB and CBOE are self-regulatory organizations beneath it, industry-funded and registered with the SEC.

A. Drops the SRO layer entirely, though it does most of the day-to-day rule-writing and enforcement.

C. Reverses the hierarchy; the SEC sits above the SROs, not beneath them.

D. Invents a structure the outline never describes; the actual split is federal agency over industry SROs.

Unit: SIE outline 1.1.1

The SEC's Authority Reaches Every SRO

The trick

Now answer