Section 1: Knowledge of Capital Markets Correct Answer:
The SEC
purpose/mission
when created
jurisdiction
authority Correct Answer: protect investos, maintin fair orderly & efficient markets, facilitate capita
...
Section 1: Knowledge of Capital Markets Correct Answer:
The SEC
purpose/mission
when created
jurisdiction
authority Correct Answer: protect investos, maintin fair orderly & efficient markets, facilitate capital formation
by congress in 1934
US federal government
enforce federal security laws & create laws that regulate securities industry
enforces Securities act 1933/1934, trust indenture act 1939, investment company act 1940, investment advisors act 1940
SROs (Self-Regulatory Organizations)
what is the largest SRO? Correct Answer: organization formed to regulate certain professions & industires
to create rules that promote order among businesses& orgs, supplemental to laws/gov
FINRA
CBOE
jurisdiction? Correct Answer: originated the VIX
Chicago board options exchange
1st nationally recognized sec exchange listing and trading options.
(lgest option market)
SRO
jurisdiction over all writing and trading of standardized options and related contracts listed on exchange
FINRA
government? Correct Answer: Financial Industry Regulatory Authority
license and regulate B/Ds
license security dealer, audit dealers/associated firms, ensure compliance, write/enforce rules governing BDs, regulate trading equities corps bonds sec features options
independent NONgovernmental
largest SRO
MSRB
supports? Correct Answer: Municipal Securities Rulemaking Board
BOD oversee Us municipal & responsible for setting/governing rules
support FINRA
SRO
Department of Treasury/IRS Correct Answer: manage federal finances by collecting taxes and paying bills & managing currency/gov accs /public debt
IRS- US gov agency responsible for collecting most federal taxes and for administering tax rules and regulations
State Regulators Correct Answer: state/local public service/utilities commission, insurance/annuity, banking, company info, consumer protection
NASAA
what is it? Correct Answer: North American Securities Administrators Association
oldest international investor protection organization
(a state regulator)
The Federal Reserve
fiscal or monetary policy?
composed of?
when tighten policy? Correct Answer: the central bank of the United States
control inflation/encourage employment, responsible for clearing checks & supplying currency, most important to loan $ to other banks & set interest rates, make bank reserve requirements
independent body (meaning looks after broader interests rather than for ones own political interests)
lower rate= more money borrowed= more money in circulation
BOG (board of governors), 12 fed reserve banks, fed open market committee (FOMC=set monetary policy)
when inflation is too high
SIPC
oversees? Correct Answer: Securities Investor Protection Corporation
protects customers account in BD bankruptcy cash/securities up to 500,000, cash only 250,000
oversee liquidation of member firms
nonprofit
FDIC
type of agency?
why created?
funded by? Correct Answer: Federal Deposit Insurance Corporation
insures depositors of insured banks
independent agency
created by congress to maintain stable financial system, make lg/complex fin institutions resolvable
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