Chapter 1 - Overview of Financial Markets & Regulations

Question 1

The Securities Act of 1933 regulates…

Answer 1

new issues.

Question 2

What is the primary purpose of the Securities Act of 1933?

Answer 2

Provide investors with full and fair disclosure regarding new issues (prospectus)

Question 3

The Securities Exchange Act of 1934 regulates the…

Answer 3

Secondary Market.

Question 4

What U.S. Government agency, created by the ‘34 Act, enforces securities laws?

Answer 4

The Securities and Exchange Commission (SEC)

Question 5

SEC

Answer 5

Securities and Exchange Commission

Question 6

SRO

Answer 6

Self-Regulatory Organizations

Question 7

Name some Self-Regulatory Organizations (SROs).

Answer 7

FINRA, MSRB, CBOE, NYSE, and other exchanges

Question 8

FINRA

Answer 8

Financial Industry Regulatory Authority

Question 9

MSRB

Answer 9

Municipal Securities Rulemaking Board

Question 10

Broker-Dealer Departments

Answer 10

Investment Banking
Research
Sales
Trading
Operations

Question 11

CBOE

Answer 11

Chicago Board Options Exchange

Question 12

NYSE

Answer 12

New York Stock Exchange

Question 13

What is the role of an SRO?

Answer 13

Maintain fair and orderly securities markets and establish rules and regulations for protecting investors

Question 14

The ________________ is the SRO for the OTC market.

Answer 14

The Financial Industry Regulatory Authority (FINRA) is the SRO for the OTC market

Question 15

What is FINRA’s primary objective?

Answer 15

To adopt, administer, and enforce rules in the securities industry.

Question 16

Which department of a broker-dealer handles the underwriting and issuance of securities for clients?

Answer 16

Investment banking

Question 17

IPO

Answer 17

Initial Public Offering