Chapter 1 - Overview Of Financial Markets And Regulation

Question 1

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

Answer 1

Investment Banking

Question 2

The _________ is the SRO for the OTC market.

Answer 2

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

Question 3

What is the role of an SRO?

Answer 3

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

Question 4

The Securities Exchange Act of 1934 regulates the _______ ______.

Answer 4

The Securities Exchange Act of 1934 regulates the Secondary Market.

Question 5

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

Answer 5

The Securities and Exchange Commission (SEC)

Question 6

What is FINRA’s primary objective?

Answer 6

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

Question 7

The Securities Act of 1933 regulates _____.

Answer 7

The Securities Act of 1933 regulates new issues.

Question 8

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

Answer 8

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

Question 9

Name some Self-Regulatory Organizations (SROs).

Answer 9

FINRA, MSRB, CBOE, and other exchanges.