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

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

What is FINRA’s primary objective?

Answer 3

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

Question 4

The Securities Exchange Act of 1934 regulates the __________ _______.

Answer 4

The Securities Exchange Act of 1934 regulates the Secondary Market.

Question 5

The Securities Act of 1933 regulates ____________.

Answer 5

The Securities Act of 1933 regulates new issues.

Question 6

The __________________________________________ is the SRO for the OTC market.

Answer 6

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

Question 7

What is the role of an SRO?

Answer 7

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

Question 8

Name some Self-Regulatory Organizations (SROs).

Answer 8

FINRA, MSRB, CBOE, and other exchanges

Question 9

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

Answer 9

The Securities and Exchange Commission (SEC)