Stock Jobs Stock Market Regulations and Compliance

Question 1

Which US government agency primarily regulates the securities industry?

Accepted Answer

Securities and Exchange Commission (SEC)

Answer

Federal Reserve Board (FRB)

Answer

Financial Industry Regulatory Authority (FINRA)

Answer

Commodity Futures Trading Commission (CFTC)

Question 2

What is 'insider trading' and why is it illegal?

Accepted Answer

Trading securities based on material non-public information, which gives an unfair advantage

Answer

Trading stocks during market hours by exchange members

Answer

Trading by company employees within designated periods

Answer

Trading between brokers within the same firm

Question 3

What is FINRA and what role does it play?

Accepted Answer

A self-regulatory organization that oversees broker-dealers and their registered representatives

Answer

A government agency that funds investor education programs

Answer

The primary stock exchange for financial sector stocks

Answer

A federal agency that insures brokerage accounts

Question 4

What does the Sarbanes-Oxley Act of 2002 require?

Accepted Answer

Public companies to certify the accuracy of financial statements and improve internal controls

Answer

All investors to register with the SEC before trading

Answer

Hedge funds to disclose all positions quarterly

Answer

All securities trades to be settled within one business day

Question 5

What is a 'prospectus' in securities regulation?

Accepted Answer

A formal legal document providing details about an investment offering to prospective investors

Answer

A broker's annual performance report

Answer

A regulatory filing for stock buyback programs

Answer

A document listing all exchange-traded funds

Question 6

What are 'Regulation A' and 'Regulation D' in securities law?

Accepted Answer

SEC exemptions that allow companies to raise capital without full registration requirements

Answer

Rules governing stock exchange trading hours and settlement

Answer

Regulations governing insider trading disclosures

Answer

Standards for annual reporting and proxy statements