1 Federal Securities Legislation (1.Appx)

Question 1

Securities Act of 1933

Answer 1

Requires registration of IPOs (Initial Public Offerings)

i.e., regulates primary markets

Question 2

Glass-Steagall Act of 1933

Answer 2

Prohibited financial institutions from consolidation and offering any combination of traditional commercial banking, investment banking (brokerage firms), and insurance

Question 3

Securities Exchange Act of 1934

Answer 3

• Required companies with previously issued securities to keep information current.
• Created the SEC to enforce securities laws.
• Requires brokers and dealers to register with the SEC.

i.e., regulates secondary markets

Question 4

Maloney Act of 1938

Answer 4

• Brought the over-the-counter OTC market under the regulation of the SEC and called for self-regulation of OTC securities dealers

Question 5

Federal Bankruptcy Act of 1938

Answer 5

As amended in 1978, provides for the liquidation of hopelessly troubled firms and provides for the reorganization of troubled firms that might be able to survive

Question 6

Investment Company Act of 1940

Answer 6

Extended securities law to investment companies (mutual funds)

Question 7

Investment Advisors Act of 1940

Answer 7

Requires registration for and regulates activities of investment advisers

Question 8

McCarren-Ferguson Act of 1945

Answer 8

Made it clear that insurance was to be regulated at the state level as long as the states implemented and executed this regulation adequately

Question 9

Security Investor Protection Act of 1970

Answer 9

Established the SIPC (Securities Investor Protection Corporation) and ensures consumers’ accounts up to 500,000 in securities and cash, with a limit of 250,000 of cash coverage (in the event of the failure of a brokerage firm)

Question 10

Insider Trading and Securities Fund Enforcement Act of 1988

Answer 10

Specified what constitutes the insider trading of securities and stiffen the penalties for engaging in such trading

Question 11

Gramm-Leach-Bliley Act of 1999

Answer 11

• Repealed the Glass-Steagall Act of 1933
• Addresses the manners in which financial institutions manage the private information of individuals

Question 12

USA PATRIOT Act of 2001

Answer 12

Requires broker-dealers & others to have internal policies, procedures, and controls to meet the know-your-customer (KYC) mandate as an effort against funding terrorism by money laundering