SIE Exam

SIE Purpose and Mission

A U.S. government oversight agency responsible for regulating the securities markets and protecting investors. The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.

Purpose of SRO's

A self-regulatory organization is an organization that exercises some degree of regulatory authority over an industry or profession.

When was the Federal Reserve created?

The Federal Reserve System was created by Congress in 1913.

Institutional Investor

a company or organization that invests money on behalf of other people. EX: banks, credit unions, insurance companies, pension funds, hedge funds, REITs, investment advisors, endowments, and mutual funds. Mutual funds, pensions, and insurance companies are examples. Institutional investors often buy and sell substantial blocks of stocks, bonds, or other securities

Clearing Broker

handle buy and sell orders but also maintain custody of account owners' securities and other assets.

Retail Investor

individual investor, is a non-professional investor who buys and sells securities through traditional or online brokerage firms or other types of investment accounts Securities: mutual funds, or exchange traded funds (ETFs)

Introducing Broker

is a broker dealer who introduces customer accounts to a clearing broker dealer. Does not hold customer assets or settle trades with counterparties

Municipal Securities

A municipal bond, commonly known as a muni bond, is a bond issued by a local government or territory, or one of their agencies. It is generally used to finance public projects such as roads, schools, airports and seaports, and infrastructure-related repairs

Prime Brokers

A prime-brokerage arrangement involves a variety of services offered by a broker-dealer to an active trading firm, such as a hedge fund. Most prime brokers offer both execution and clearing services to these customers.

Accredited Investor

An investor that may participate in private placement offerings w/o restrictions: Large institutional investor, wealthy individual or an officer of the issuing firm

CBOE

Chicago Board Options Exchange. Regulates all matters related to trading standardized options and related contracts listed on that exchange.

FINRA

Financial Industry Regulatory Authority. Regulates all matters related to investment banking, trading in the OTC market, trading in NYSE listed securities, and conduct of FINRA member firms and associated persons. Also regulates investment companies and limited partnership transactions

The U.S. Treasury

Is the government department responsible for issuing all Treasury bonds, notes and bills. Among the government departments operating under the U.S. Treasury umbrella are the Internal Revenue Service (IRS), the U.S

MSRB

Municipal Securities Rulemaking Board. Regulates all matters related to the underwriting and trading of state and municipal securities. Does not have enforcement powers and depends on other SROs for the enforcement of its rules

SIPC

SIPC is an insurance that provides brokerage customers up to $500,000 coverage for cash and securities held by the firm (although coverage of cash is limited to $250,000). Authorized and created under the Securities Investor Protection Act of 1970, SIPC oversees the liquidation of broker-dealers who go bankrupt, lapse into financial trouble, or if the assets of their customers go missing. The intent of the SIPC is to return the customers' securities and funds to them as quickly as possible.

SRO

Self-regulatory Organizations Function under SEC oversight. Accountable for enforcing federal securities laws and supervising securities practices within an assigned jurisdiction. Largest 3: FINRA, MSRB, and CBOE

State Regulator

State regulators supervise over 3/4 of the nation's banks, and license thousands of non-banks to operate in their state. Each state has a state banking department that: Monitors safety and soundness of chartered institutions. Ensures that financial institutions are operating within the law

IRS

The Internal Revenue Service (IRS) is responsible for the determination, assessment, and collection of internal revenue in the United States. This revenue consists of personal and corporate income taxes, excise, estate, and gift taxes, as well as employment taxes for the nation s Social Security system

Jurisdiction of SEC

The SEC holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, which is the nation's stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States

Definition of SEC

The U.S. Securities and Exchange Commission (SEC) is an independent federal government regulatory agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation.

The Federal Reserve

influences the supply of money and credit; regulates and supervises financial institutions; serving as a banking and fiscal agent for the United States government; and supplying payments services to the public through depository institutions like banks, credit - conduct the nation's monetary policy, - provide and maintain an effective and efficient payments system, and - supervise and regulate banking operations.

Investment advisor

is a person or firm that is engaged in the business of providing investment advice to others or issuing reports or analyses regarding securities, for compensation. Investment advisers may include money managers, investment consultants, financial planners, general partners of hedge funds, and others who are compensated for providing advice about securities.

Municipal Advisors

is a person that provides advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal Municipal: relating to a town or city or its local government

Mission of SRO's

provide information and allow input on any areas of interest or concern which may include fraud or other unethical industry activities. The SRO may also help investors understand how their investments work and advise on methods to mitigate potential risks associated with the securities industry