Rule 4 of 6 in this unit1.1.1

1.1.1 The Securities and Exchange Commission (SEC)

SIE outline 1.1.1

FINRA Governs Broker-Dealers

The largest SRO. Writes and enforces broker-dealer rules under Exchange Act Section 15A. NOT limited to one product line.

The method for this kind of question
  1. This material is Section 1: 12 of the 75

Now answer

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

FINRA's own authority to register as a national securities association comes from which provision?

How sure are you?

Correct: A. Exchange Act Section 15-A is where FINRA's own authority as a national securities association comes from.
B. Section 7 sets registration content for a new issue, unrelated to FINRA's own charter.
C. Section 12 governs a security's own exchange registration, not FINRA's charter as an association.
D. Section 23 governs what an effective registration statement does and does not mean, not FINRA's charter.

Unit: SIE outline 1.1.1

Question 2Harder

Under Securities Act Section 23, which is true of an effective registration statement?

How sure are you?

Correct: C. Section 23 states that neither a filing, its being effective, nor the absence of a stop order is a finding of accuracy or merit, and makes a contrary representation to a buyer unlawful.
A. Section 23 explicitly denies that effectiveness is a finding of accuracy.
B. Section 23 explicitly denies that the Commission has passed upon the merits.
D. Invents a guarantee the section never makes; the absence of a stop order today says nothing about tomorrow.

Unit: SIE outline 1.1.1

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