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SIE > Chapter 1 > Flashcards

Chapter 1 Flashcards

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SIE Exam flashcards
1
Q

Securities and exchange commission

A

Also known as the SEC
It functions as a ultimate enforcer of federal security laws, and is responsible for protecting US investors.
Provides investors with full and fair disclosure, accurate, and balanced information regarding the securities

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2
Q

SRO

A

Self regulatory organization, such as a Chicago bored, options, exchange, and the municipal securities rule making board

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3
Q

Chicago Board exchange options

A

This is the examining authority for broker dealers, engaging in options market. The CBOE is an exchange the trade in standardized option contracts. It is charged with regulating the training activities and tails practices of its member firms

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4
Q

Municipal securities rulemaking board

A

Also known as MSRB
This SRO regulate broker dealers and thinks that engage in municipal securities business. Overseas that underwriting trading of municipal securities and 529 college savings plans.

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5
Q

Federal federal deposit insurance corporation

A

The FDIC is an independent federal agency, protecting bank account deposits in US Banks from bankruptcy

The FDIC is a primary regulator of banks and provides each depositor insurance protection for 250,000 per account holder per bank

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6
Q

The department of treasury

A

The treasury department is the executive agency responsible for promoting economic, prosperity and ensuring the financial security of the United States

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7
Q

Internal revenue service

A

The internal revenue service is the agency under the treasury department that is responsible for collecting taxes and enforcing tax laws. The IRS has the authority to issue monetary fines and punishment for violating the internal revenue code IRC.

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8
Q

Internal revenue code

A

The IRC covers rules concerning taxation, including income, gift, estate, and capital gains

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9
Q

Capital markets

A

The securities markets are often referred to as capital markets

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10
Q

Define a person

A

A person is defined as a natural individual or legal entity that can transact securities business

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11
Q

Define a security

A

Hey, security as an investment contract offer through a legal entity managing the effort for expected profits. Examples include stocks, bonds, and mutual funds.

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12
Q

Define a common stock

A

Hey, stock is an equity securities that represents ownership of a corporation

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13
Q

Define bond

A

A bond is a debt security represents a creditor relationship with the issuer

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14
Q

Mutual funds

A

Mutual funds are pools investments that can hold a variety of stocks, bonds, and other securities

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15
Q

Define securities exchange

A

Hey securities exchange our auction market where exchange list insecurities are bought and sold. Exchanges have a listed requirements that is yours must meet if they do not meet the listing requirements or do not want the securities listed they will have to trade insecurities over the counter. Over the counter, OTC market is a negotiated market where on the securities are bought and sold.

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16
Q

Over-the-counter market

A

The over-the-counter market is also known as the OTC market and is negotiate a market or on the securities are bought and sold

17
Q

Retail investor

A

A retail investor is an individual that purchases securities for their own account
A retail investor is part of the general public

18
Q

Accredited investor

A

Under federal law , rule 501 of regulation D defined an accredited investor as an investor to meet one of the following
Individual or joint net worth of $1 million
Individual with an annual income of $200,000 for the past two years or a couple with a joint income of 300,000
Individual holding a series 7 series 65 or series 82 license
And employee of private funds, if deemed knowledgeable
Investment advisors
Rural business investment companies
Any bank, investment company and insurance company
Any entity with assets and excess $5 million, including limited liability, companies, family offices in their clients nonprofit institutions

19
Q

Institutional investor

A

An institutional investor is an entity that makes security transactions on a large scale for their own accounts or four institutional clients, such as insurance or investment companies, trust, broker dealers, investment, advisors, banks, savings, government agencies, or employee benefit plans

20
Q

Qualified institutional buyer

A

A qualified institutional buyer is an institutional investor that owns and invest a minimum of $100 million in securities on a discretionary basis. An individual cannot qualify as a QIB

21
Q

Issuer

A

An issuer is a legal entity, including a corporation, municipality or federal government offering securities to the public to raise capital. They may sell stocks or bonds to raise

22
Q

Underwriter or investment banker

A

Insecurities broker dealer that administers the public insurance and distribution of securities for a corporation or other issuing body.

23
Q

Custodian

A

A firm such as a trust, company, commercial bank, or similar financial institution hired by the issuer to physically safeguard cash and securities for the for the buying public

24
Q

Trustee

A

A firm such as a truss company, commercial bank, or similar financial institution hired by bond, is yours to protect the bond holders interest

25
Q

Transfer agent

A

A firm that performs all recordkeeping and customer service functions processes, name, and address changes and keeps track of the number of shares owned by each investor. Typically the transfer agent will act as a ping, agent distributing dividends and capital gains.

26
Q

Registrar

A

An entity that works with the transfer agent to keep current files of bonds and stock owners.
They ensure that the amount of stock in circulation does not exceed the authorized amount

27
Q

Broker dealer

A

Is a firm in the business of executing securities trade for compensation

28
Q

Broker

A

A broker is a firm acting as an agent, executing orders on behalf of customers and gets paid commission.

29
Q

A dealer

A

A dealer is a firm acting as a principal trading for its own account, and charges a markup on purchases, or mark down on sales, instead of being paid commission, dealers act in a principal capacity 

30
Q

Investment banking

A

The department of a broker dealer that negotiate with insurance when selling securities to the public

31
Q

Research

A

The department of a broker dealer that investigate is yours and the merits of their securities to make buy and sell recommendations

32
Q

Trading

A

The department of broker dealer that handles trade executions for clients and the firm 

33
Q

Operations

A

The department of broker dealer that insurance accurate recordkeeping within the firm

34
Q

Margin

A

The department of a broker dealer that oversees the extension of credit to investors. This department ensures the firm and investors follow federal regulations concerning the extension of credit allowed within margin account

35
Q

What are the five department for broker dealers?

A

Investment banking
Research
Trading
Operations
Margin

SIE (1 decks)

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