Rule 3 of 11 in this unit1.1.3

1.1.3 Other Regulators and Agencies

SIE outline 1.1.3

MSRB Writes It, FINRA Enforces It

The MSRB writes the municipal rulebook: MSRB Rule G-11 on primary offering practices, G-32 on EMMA disclosure, G-34 on CUSIP numbers and NIIDS: but has no examination staff and no enforcement authority of its own. FINRA enforces those rules against broker-dealers; the bank regulators enforce them against bank municipal dealers. NOT 'the MSRB disciplines its members.' It has no members to discipline and no examiners to send.

The method for this kind of question
  1. 1h45m ÷ 80 items = 78.75 seconds per item. A regulator item should cost you 30.
  2. Four cells decide these: what it regulates, what it cannot do, its statute, its number.
  3. “The SEC approved” is always wrong: Securities Act Section 23 makes the claim unlawful.
  4. MSRB + the word enforcement = the writer-versus-enforcer split. MSRB writes; FINRA enforces.
  5. Regulation T is the Fed's rule: 12 CFR Part 220, 50% floor at §220.12(a): never FINRA's.
  6. Firm failed → SIPC ($500,000 / $250,000 cash). Bank failed → FDIC ($250,000). Neither pays for a price drop.
  7. Next: SIE Practice Quiz #4: Capital Markets Mixed Set, weighted like the real exam.

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

Which office is a bureau of the Treasury that receives Bank Secrecy Act filings, not a securities regulator in its own right?

How sure are you?

Correct: A. FinCEN is the Treasury bureau that receives Bank Secrecy Act filings.
B. OFAC is also a Treasury office, but it runs sanctions programs and the SDN list, not Bank Secrecy Act filings.
C. NASAA is an association of state securities administrators, unrelated to the Treasury.
D. The MSRB is a securities SRO, not a Treasury bureau.

Unit: SIE outline 1.1.3

Question 2Above the exam

A brokerage fails holding $600,000 for one customer, all of it cash, no securities. How much does SIPC pay?

How sure are you?

Correct: B. $250,000. When the whole claim is cash, the $250,000 cash sub-limit binds before the $500,000 total cap ever comes into play, because cash alone can never exceed its own sub-limit.
A. Ignores both caps and simply pays the full amount held.
C. Applies the $500,000 total cap as if it were the only limit. It forgets that an all-cash claim is governed by the tighter $250,000 cash sub-limit.
D. An invented midpoint figure with no basis in either cap.

Unit: SIE outline 1.1.3

Next ruleRegulation T Belongs to the Fed

The whole unit · Your plan