CSCP Securities Laws & Regulations 2

Question 1

Under the Securities Exchange Act of 1934, which entity is primarily responsible for regulating securities broker-dealers?

Accepted Answer

SEC

Answer

The SEC has primary regulatory authority over broker-dealers under the Securities Exchange Act of 1934, though it delegates day-to-day oversight to FINRA.

Question 2

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 created which new regulatory body?

Accepted Answer

Financial Stability Oversight Council (FSOC)

Answer

Dodd-Frank created FSOC to identify and respond to systemic risks to the U.S. financial system.

Question 3

Which SEC rule requires broker-dealers to act in the best interest of retail customers when making investment recommendations?

Accepted Answer

Regulation Best Interest (Reg BI)

Answer

Regulation Best Interest, adopted in 2019, requires broker-dealers to act in the best interest of retail customers and disclose conflicts of interest.

Question 4

A company that fails to file required periodic reports with the SEC may face which consequence under the Exchange Act?

Accepted Answer

Suspension of trading in its securities

Answer

The SEC may issue a trading suspension of up to 10 days for companies that fail to meet reporting requirements under the Exchange Act.

Question 5

Which provision of the Sarbanes-Oxley Act requires CEOs and CFOs to personally certify the accuracy of financial statements?

Accepted Answer

Section 302

Answer

Section 302 of SOX requires the principal executive and financial officers to certify the accuracy of periodic reports filed with the SEC.

(CSCP) Certified Securities Compliance Professional Practice Test

(CSCP) Certified Securities Compliance Professional Practice Test

CSCP Securities Laws & Regulations 2