SIE Regulatory Framework 2

Question 1

Which self-regulatory organization (SRO) has primary responsibility for overseeing broker-dealers in the United States?

Accepted Answer

FINRA

Answer

FINRA (Financial Industry Regulatory Authority) is the primary SRO responsible for regulating broker-dealers under SEC oversight.

Question 2

A broker-dealer that holds customer securities and cash is considered a:

Accepted Answer

Carrying firm

Answer

A carrying firm (also called a clearing firm) maintains custody of customer assets and handles settlement of trades.

Question 3

Under Regulation T, the Federal Reserve Board sets the initial margin requirement for purchasing equity securities at:

Accepted Answer

50%

Answer

Regulation T requires investors to deposit at least 50% of the purchase price of marginable securities at the time of purchase.

Question 4

The USA PATRIOT Act requires broker-dealers to implement a Customer Identification Program (CIP) primarily to:

Accepted Answer

Combat money laundering and terrorism financing

Answer

The CIP requirement of the USA PATRIOT Act mandates identity verification of customers to prevent money laundering and terrorism financing.

Question 5

Which agency has jurisdiction over futures contracts on agricultural commodities?

Accepted Answer

CFTC

Answer

The Commodity Futures Trading Commission (CFTC) regulates futures and options on commodities, including agricultural products.

SIE - Securities Industry Essentials Practice Test