Regulatory Entities and Agencies

Question 1

❓ What is the SEC’s primary purpose?

Answer 1

✅ To protect investors, maintain fair markets, and facilitate capital formation.

Question 2

❓ What is the SEC’s authority?

Answer 2

✅ The SEC enforces federal securities laws, oversees the securities industry, and regulates key players like broker-dealers and exchanges.

Question 3

❓ What types of securities fall under SEC jurisdiction?

Answer 3

✅ Stocks, bonds, mutual funds, ETFs, options, and other public securities.

Question 4

❓ Which key laws does the SEC enforce?

Answer 4

✅ - Securities Act of 1933 (regulates new securities offerings)

✅ Securities Exchange Act of 1934 (regulates secondary markets & created the SEC)

✅ Investment Advisers Act of 1940 (regulates investment advisors)

Question 5

❓ What is the purpose of an SRO?

Answer 5

✅ To create and enforce industry rules, ensuring market integrity and investor protection.

Question 6

❓ Who gives SROs their authority?

Answer 6

✅ The SEC grants SROs the power to regulate their own members within the securities industry.

Question 7

❓ What are some key SROs and their functions?

Answer 7

✅ - FINRA – Regulates broker-dealers and registered reps.

✅ CBOE – Regulates the options market.

✅ MSRB – Regulates municipal securities firms.

Question 8

❓ What is the role of the Department of the Treasury?

Answer 8

✅ Manages federal finances and oversees economic policy.

Question 9

❓ What is the role of the IRS?

Answer 9

✅ Enforces tax laws and collects federal taxes.

Question 10

❓ What is NASAA?

Answer 10

✅ The North American Securities Administrators Association represents state securities regulators who enforce local securities laws.

Question 11

❓ What does the Federal Reserve (the Fed) do?

Answer 11

✅ - Controls monetary policy (interest rates & money supply).

✅ Supervises banks.

✅ Maintains financial stability.

Question 12

❓ What does the Securities Investor Protection Corporation (SIPC) do?

Answer 12

✅ Protects investors against broker-dealer failures, covering up to $500,000 per account (including $250,000 cash)

Question 13

❓ What does the Federal Deposit Insurance Corporation (FDIC) do?

Answer 13

✅ Insures bank deposits up to $250,000 per depositor per bank.