FREE S-12 Code of Ethics Questions and Answers
What is the primary function of a Self-Regulatory Organization (SRO) in the securities industry?
Correct!
Wrong!
SROs ensure that their members comply with federal securities laws and regulations, but they are not government entities.
Which of the following is an example of a Self-Regulatory Organization?
Correct!
Wrong!
FINRA is a non-governmental organization that regulates broker-dealers and other members of the securities industry.
What role does FINRA play in regulating broker-dealers?
Correct!
Wrong!
FINRA ensures that broker-dealers adhere to rules designed to protect investors and maintain fair markets.
Which of the following is NOT a function of an SRO?
Correct!
Wrong!
SROs do not control monetary policy; that is the role of central banks, such as the Federal Reserve.
Which of the following best describes the relationship between the SEC and SROs?
Correct!
Wrong!
While SROs have regulatory authority, the SEC provides oversight to ensure that SRO rules are consistent with federal securities laws.