• SIE Outline

    Major Laws (Depression Era Reforms)

    The Securities Act of 1933

    Requires the Registration of Securities offerings

    The Securities Exchange Act of 1934

    Establishes the SEC

    The Investment Company Act of 1940

    “The Act requires these companies to disclose their financial condition and investment policies to investors when stock is initially sold and, subsequently, on a regular basis”1

    The Investment Adviser Act of 1940

    Requires firms/sole practitioners who make money advising others about securities to register with the SEC

  • Practice Exam Notes

    MRSP Political Contributions

    • Topic MSRB
    • Potlical Contributions capped at $250
    • Source

    Pricing Bonds

    Stocks vs treasuries

    • Util Stocks maintain value
    • T Bills are short term securities
    • T Bonds are long term securities
    • Blue chip stocks are reliable

    Syndication Desk

    Insider Trading

    • Which shit sounds public

    SEC Reg S-P

    Link

    Government Agency Issues

    Link

  • Section 1: Knowledge of Capital Markets

  • Section 2: Understanding Products and Their Risks

  • Section 3: Understanding Trading, Customer Accounts and Prohibited Activities

  • Section 4: Overview of the Regulatory Framework

  • Wrong shit

    • Bond Pricing
    • No Load Vs Load Mutual Funds
    • Open Ended Investment Company
    • Gotta Report DUIS
    • Bankrupcty stakeholder order
    • Quaterly reporting of customers position
  • 1.1 Regulatory Entities, Agencies and Market Participants

  • 2.1 Products

  • 2.2 Investment Risks

  • 3.1 Trading, Settlement and Corporate Actions

  • 3.2 Customer Accounts and Compliance Considerations

  • 3.3 Prohibited Activities

  • 4.1 SRO Regulatory Requirements for Associated Persons

  • 4.2 Employee Conduct and Reportable Events

  • 1.1.1 The Securities and Exchange Commission (SEC)

    Outline

    • The high-level purpose and mission of securities regulation
    • Definition, jurisdiction and authority of the SEC

    SEC Mission

    The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.1

    Links

    Homepage
    Wikipedia

  • 1.1.2 Self-regulatory Organizations (SROs)

    • Purpose and mission of an SRO
    • Jurisdiction and authority of SROs (e.g., CBOE, FINRA, MSRB)

    Legacy

    • NASD (National Association of Securities Dealers) NASDAQ Yo
    • Exchange Enformencement Arms NYSE

    CBOE

    FINRA

    Home
    Wikipedia

    Wikipedia

  • 1.1.3 Other Regulators and Agencies

    • Department of the Treasury/IRS
    • State regulators (e.g., NASAA)
    • The Federal Reserve
    • Securities Investor Protection Corporation (SIPC)
    • Federal Deposit Insurance Corporation (FDIC)

      1.1.4 Market Participants and their Roles

    • Investors (e.g., accredited, institutional, retail)
    • Broker-Dealers (e.g., introducing, clearing, prime brokers)
    • Investment advisers
    • Municipal advisors
    • Issuers and underwriters
    • Traders and market makers
    • Custodians and trustees
    • Transfer agents
    • Depositories and clearing corporations (e.g., Depository Trust & Clearing Corporation (DTCC), Options Clearing
      Corporation (OCC))
  • 1.2 Market Structure

    1.2.1 Types of Markets

    • The primary market
    • The secondary market (e.g., electronic, over-the-counter (OTC), physical)
    • The third market
    • The fourth market
  • 1.3 Economic Factors

    1.3.1 The Federal Reserve Board’s Impact on Business Activity and Market Stability

    • Monetary vs. fiscal policy
    • Open market activities and impact on economy
    • Different rates (e.g., interest rate, discount rate, federal funds rate)

      1.3.2 Business Economic Factors

    • Purpose of financial statements (e.g., balance sheet, income statement)
    • Business cycle (e.g., contraction, trough, expansion, peak)
    • Indicators (e.g., leading, lagging, coincident, inflation)
    • Basic effects on bond and equity markets (e.g., cyclical, defensive, growth)

    • Principal economic theories (e.g., Keynesian, Monetarist)

      1.3.3 International Economic Factors

    • U.S. balance of payments
    • Gross domestic product (GDP), gross national product (GNP)
    • Exchange rates
  • 1.4 Offerings

    • Roles of participants (e.g., investment bankers, underwriting syndicate, municipal advisors)
    • Types of offerings
    • Public vs. private securities offering
    • Initial public offering (IPO), secondary offering and follow-on offering
    • Methods of distribution (e.g., best efforts, firm commitment)
    • Shelf registrations and distributions (e.g., definition, purpose)
    • Types and purpose of offering documents and delivery requirements (e.g., official statement, program disclosure
      document, prospectus)
    • Regulatory filing requirements and exemptions (e.g., SEC, blue-sky laws)
  • Rules

  • 2.1.1 Equity Securities

    Knowledge of:

    • Ownership (e.g., order of liquidation, limited liability)
    • Voting rights
    • Convertible
    • Control and restrictions (e.g., SEC Rule 144)

    Kahn Academy

  • 2.1.2 Debt Instruments

    • Municipal securities
    • General obligation (GO) bonds
    • Revenue bonds
    • Others (e.g., special type bonds, taxable municipal securities, short-term obligations)
    • Others (e.g., money market instruments, certificate of deposit (CD), bankers’ acceptance, commercial paper)
      Knowledge of:
    • Varying maturities
    • Generate income (e.g., interest)
    • Coupon value
    • Par value
    • Yield
    • Ratings and rating agencies
    • Callable and convertible features
    • Short-term vs. long-term characteristics
    • Relationship between price and interest rate
    • Negotiated vs. competitive offerings via underwriters and syndicates
    • Auction
  • 2.1.3 Options

    • Types of options
    • Puts and calls
    • Equity vs. index
      Knowledge of:
    • Hedging or speculation
    • Expiration date
    • Strike price
    • Premium

    7

    • Underlying or cash settlement
    • In-the-money, out-of-the money
    • Covered vs. uncovered
    • American vs. European
    • Exercise and assignment
    • Varying strategies (e.g., long, short)
    • Special disclosures (e.g., Options Disclosure Document (ODD))
    • Options Clearing Corporation (OCC) for listed options
  • 2.1.4 Packaged Products

    • Investment companies
    • Types of investment companies
    • Closed-end funds
    • Open-end funds
    • Unit investment trusts (UITs)
    • Variable contracts/annuities
      Knowledge of:
    • Loads
    • Share classes
    • Net asset value (NAV)
    • Disclosures
    • Costs and fees
    • Breakpoints
    • Right of accumulation (ROA)
    • Letter of intent (LOI)
    • Net transactions
    • Surrender charges
    • Sales charges
  • 2.1.5 Municipal Fund Securities

    • 529 Plans
    • Prepaid tuition
    • Savings plans
    • Local government investment pools (LGIPs)
    • ABLE accounts
      Knowledge of:
    • Municipal fund securities
    • Owner vs. beneficiary
    • Restricted use of plan assets
    • Tax advantages
    • Direct or adviser sold
  • 2.1.6 Direct Participation Programs (DPPs)

    • Types of DPPs
    • Limited partnerships
    • Tenants in common (TIC)

    8
    Knowledge of:

    • Pass-through tax treatment
    • Unlisted
    • Generally illiquid
  • 2.1.7 Real Estate Investment Trusts (REITs)

    • Types of REITs
    • Private
    • Registered, non-listed
    • Listed
      Knowledge of:
    • Real estate equity or debt
    • Tax-advantaged income without double taxation
  • 2.1.8 Hedge Funds

    Knowledge of:

    • Minimum investment
    • Partnership structure
    • Private equity
    • Generally illiquid
  • 2.1.9 Exchange-traded Products (ETPs)

    • Types of ETPs
    • Exchange-traded funds (ETFs)
    • Exchange-traded notes (ETNs)
      Knowledge of:
    • Alternative investments to mutual funds
    • Fee considerations
    • Active vs. passive
    • Definition and Identification of Risk Types

    • Capital

    • Credit
    • Currency
    • Inflationary/purchasing power
    • Interest rate/reinvestment
    • Liquidity
    • Market/systematic
    • Non-systematic
    • Political
    • Prepayment
    • Strategies for Mitigation of Risk
    • Diversification
    • Portfolio rebalancing
    • Hedging
  • Rules

    FINRA Rules
    2261 – Disclosure of Financial Condition
    2262 – Disclosure of Financial Relationship with Issuer
    2310 – Direct Participation Programs
    2330 – Members’ Responsibilities Regarding Deferred Variable Annuities
    2342 – “Breakpoint” Sales
    2360 – Options
    MSRB Rules
    D-12 – Definition of Municipal Fund Securities
    G-17 – Conduct of Municipal Securities and Municipal Advisory Activities
    G-30 – Pricing and Commissions
    G-45 – Reporting of Information on Municipal Fund Securities
    CBOE Rule
    Rule 1.1 – Definitions
    SEC Rules and Regulations
    Securities Exchange Act of 1934
    3a11-1 – Definition of the Term “Equity Security”
    10b-18 – Purchases of Certain Equity Securities by the Issuer and Others
    Investment Company Act of 1940
    Section 3(a) – Definitions - “Investment Company”
    Section 4 – Classification of Investment Companies
    Section 5 – Subclassification of Management Companies
    12b-1 – Distribution of Shares by Registered Open-end Management Investment Company

  • 3.1.1 Orders and Strategies

    • Types of orders (e.g., market, stop, limit, good-til-canceled (GTC), discretionary vs. non-discretionary, solicited
      vs. unsolicited)
    • Buy and sell, bid-ask
    • Trade capacity (e.g., principal, agency)
    • Long and short, naked and covered
    • Bearish and bullish
  • 3.1.2 Investment Returns

    • Components of return (e.g., interest, dividends, realized/unrealized gains, return on capital)
    • Different types of dividends (e.g., cash, stock)
    • Dividend payment dates (e.g., record date, ex-date, payable date)
    • Concepts of measurement (e.g., yield, yield to maturity (YTM), yield to call (YTC), total return, basis points)
    • Cost basis requirements
    • Benchmarks and indices
  • 3.1.3 Trade Settlement

    • Settlement time frames for various products (e.g., T, T + 1, T + 2)
    • Physical vs. book entry (e.g., delivery and settlement)
  • 3.1.4 Corporate Actions

    • Types of corporate actions (e.g., splits, reverse splits, buybacks, tender offers, exchange offers, rights offers,
      mergers and acquisitions (M&A))
    • Impact of stock splits and reverse stock splits on market price and cost basis
    • Adjustments to securities subject to corporate actions
    • Delivery of notices and corporate action deadlines
    • Proxies and proxy voting
  • 3.2.1 Account Types and Characteristics

    • Cash
    • Margin
    • Options
    • Discretionary vs. non-discretionary
    • Fee-based vs. commission
    • Educational accounts
  • 3.2.2 Customer Account Registrations

    • Individual
    • Joint
    • Corporate/institutional
    • Trust (e.g., revocable, irrevocable)
    • Custodial (e.g., UTMA)
    • Partnerships
    • Retirement (e.g., individual retirement account (IRA), qualified plans)
    • Types and characteristics

    • Required minimum distributions

    • Contributions
  • 3.2.3 Anti-money Laundering (AML)

    • Definition of money laundering
    • Stages of money laundering (e.g., structuring, layering, placement)
    • AML compliance program
    • Suspicious Activity Report (SAR)
    • Currency Transaction Report (CTR)
    • FinCEN
    • Office of Foreign Asset Control (OFAC) and the Specially Designated Nationals and Blocked Persons (SDNs)
      List
  • 3.2.4 Books and Records and Privacy Requirements

    • Books and records retention requirements
    • Confirmations and account statements
    • Holding of customer mail
    • Business continuity plans (BCP)
    • Customer protection and custody of assets
    • Privacy requirements (e.g., Regulation S-P)
      ◦ Nonpublic personal information
      ◦ Confidentiality of information
      ◦ Privacy notifications
      ◦ Safeguard requirements
  • 3.2.5 Communications with the Public and General Suitability Requirements

    • Communications with the public and telemarketing
      ◦ Classifications and general requirements
      ◦ Do-not-call list
    • Suitability requirements
      ◦ Know-your-customer (KYC)
      ◦ General requirements (e.g., what constitutes a recommendation)
  • 3.3.1 Market Manipulation

    • Definition of market manipulation
    • Types of market manipulation (e.g., market rumors, pump and dump, front running, excessive trading, marking
      the close, marking the open, backing away, freeriding)
  • 3.3.2 Insider Trading

    • Definition of insider trading
    • Definition of material nonpublic information
    • Identifying involved parties
    • Penalties (e.g., fines, expulsion, incarceration)
  • 3.3.3 Other Prohibited Activities

    • Restrictions preventing associated persons from purchasing initial public offerings (IPOs)
    • Use of manipulative, deceptive or other fraudulent devices
    • Improper use of customers’ securities or funds
      ◦ Borrowing from customers
      ◦ Sharing in customer accounts
    • Financial exploitation of seniors
    • Activities of unregistered persons
      ◦ Prohibition against paying commissions to unregistered persons
      ◦ Prohibition against solicitation of customers and taking orders
    • Falsifying or withholding documents
      ◦ Signatures of convenience
      ◦ Responding to regulatory requests
    • Prohibited activities related to maintenance of books and records (e.g., falsifying records and improper
      maintenance/retention of records)
  • Rules

  • 4.1.1 Registration and Continuing Education

    • SRO qualification and registration requirements
      ◦ Definition of registered vs. non-registered person
      ◦ Permitted activities of registered and non-registered persons
      ◦ Ineligibility for membership or association
      ◦ Background checks
      ◦ Fingerprinting
      ◦ Statutory disqualification
      ◦ Failing to register an associated person
    • State registration requirements (e.g., blue-sky laws)
    • Continuing Education (CE) requirement
      ◦ Firm Element
      ◦ Regulatory Element
  • 4.2.1 Employee Conduct

    • Form U4 and Form U5 (e.g., purpose, when to update forms)
    • Consequences of filing misleading information or omitting information
    • Customer complaints
    • Potential red flags
  • 4.2.2 Reportable Events

    • Outside business activities
    • Private securities transactions
    • Reporting of political contributions and consequences for exceeding dollar contribution thresholds
    • Dollar and value limits for gifts and gratuities and non-cash compensation
    • Business entertainment
    • Felony, financial-related misdemeanors, liens, bankruptcy
  • Rules

  • FINRA Rules

    2266 – SIPC Information
    2269 – Disclosure of Participation or Interest in Primary or Secondary Distribution
    5250 – Payments for Market Making

  • MSRB Rules

    G-11 – Primary Offering Practices
    G-32 – Disclosures in Connection with Primary Offerings
    G-34 – CUSIP Numbers, New Issue and Market Information Requirements

  • SEC Rules and Regulations

    Securities Act of 1933
    Section 7 – Information Required in a Registration Statement
    Section 8 – Taking Effect of Registration Statements and Amendments Thereto
    Section 10 – Information Required in Prospectus
    Section 23 – Unlawful Representations
    215 – Accredited Investor
    431 – Summary Prospectuses
    Schedule A – Schedule of Information Required in Registration Statement
    Schedule B – Schedule of Information Required in Registration Statement
    Securities Exchange Act of 1934
    Section 3(a) – Definitions and Application of Title
    Section 12 — Registration Requirements for Securities
    Section 15 – Registration and Regulation of Brokers and Dealers
    Section 15A – Registered Securities Associations
    Regulation D – Rules Governing the Limited Offer and Sale of Securities Without Registration Under the
    Securities Act of 1933
    144 – Persons Deemed Not to Be Engaged in a Distribution and Therefore Not Underwriters
    144A – Private Resales of Securities to Institutions
    145 – Reclassification of Securities, Mergers, Consolidations and Acquisitions of Assets
    147 – “Part of an Issue,” “Person Resident,” and “Doing Business Within” for Purposes of Section 3(a)(11)
    164 – Post-filing Free Writing Prospectuses in Connection with Certain Registered Offerings

  • Common Stock

    Grants holder a percentage right to:

    • Profit
    • Voting on Corporate Policy
    • Voting on Board Members

    Wiki

  • Preferred stock

    Features

    • Preference in dividends (if dividends are paid, must pay all preferred shareholders first)
    • Preference in assets, in the event of liquidation.
    • Convertibility to common stock.
    • Call-ability (Redeemable)
    • Nonvoting.
    • Higher dividend yields.

    Wiki

  • Rights

    Option to purchase from the issuing corp at a fixed price. Shorter lifetimes than warrents

  • Warrents

    Entitles holder to buy a security at a fixed value until until an expiry date

    Vs Calls

    • Issued by Private parties, not exchanges
    • Come from newly issued stock
    • Longer expiration time than rights

    #links

    Wiki

  • American Depositary Receipts (ADRs)

    Securities issued by foreign entities but traded on American exchanges in USD

    Wikipedia

  • Ownership

    Order of Liquidation

    • Secured creditors are first in line. (They get the collateral back)
    • Next are unsecured creditors, including employees who are owed money. (They get their wages)
    • Stockholders are paid last. (Haha)
  • Treasury Securities

    Treasury securities (e.g., bills, notes, receipts, bonds)

    TBill

    • #Zero_Coupon Bond
    • No Interest
    • Maturity 4/8/13/26/52 weeks.
    • Sold at Discount of Par Value. Matures to face value

    T bills are sold on a schedule and I bet someone would quiz you on that

    Formula

    T note

    • Six Month #Coupon
    • 2/3/5/7/10 Maturities
    • $100 Increments

    T Bond

    • Six Month #Coupon
    • 30 Year Maturity
  • Agency (e.g., asset-backed and mortgage-backed securities)

    Regulation AB Definition

    “a security that is primarily serviced by the cash flows of a discrete pool of receivables or other financial assets”

    RegAB

    #TODO Expand

    AssetWiki
    MortgageWiki

  • Corporate Bond

    Terms

    • Face/Par: Principle value
    • Coupon: Interest at intervals
    • Maturation: Date principle is owed in full

    They don’t pay back the face value until maturation date

    Zero-Coupon Bond

    • Sold at a discount
    • Face value paid at Maturation

    wiki

  • Municipal Bond

    Wiki

  • FINRA Rules

    2010 – Standards of Commercial Honor and Principles of Trade
    2020 – Use of Manipulative, Deceptive or Other Fraudulent Devices
    2040 – Payments to Unregistered Persons
    2090 – Know Your Customer
    2111 – Suitability
    2120 – Commissions, Mark Ups and Charges
    2150 – Improper Use of Customers’ Securities or Funds; Prohibition Against Guarantees and Sharing in Accounts
    2165 – Financial Exploitation of Specified Adults
    2210 – Communications with the Public
    2231 – Customer Account Statements
    2251 – Forwarding of Proxy and Other Issuer-related Materials
    2264 – Margin Disclosure Statement
    2232 – Customer Confirmations
    3150 – Holding of Customer Mail
    3210 – Accounts at Other Broker-Dealers and Financial Institutions
    3230 – Telemarketing
    3240 – Borrowing from or Lending to Customers
    3250 – Designation of Accounts
    3260 – Discretionary Accounts
    3310 – Anti-money Laundering Compliance Program
    4210 – Margin Requirements
    4370 – Business Continuity Plans and Emergency Contact Information
    4511 – General Requirements
    4512 – Customer Account Information
    4514 – Authorization Records for Negotiable Instruments Drawn From a Customer’s Account
    5130 – Restrictions on the Purchase and Sale of Initial Equity Public Offerings
    5210 – Publication of Transactions and Quotations
    5220 – Offers at Stated Prices
    5230 – Payments Involving Publications that Influence the Market Price of a Security
    5240 – Anti-intimidation/Coordination
    5270 – Front Running of Block Transactions
    5280 – Trading Ahead of Research Reports
    5290 – Order Entry and Execution Practices
    5310 – Best Execution and Interpositioning
    5320 – Prohibition Against Trading Ahead of Customer Orders
    6438 – Displaying Priced Quotations in Multiple Quotation Mediums

  • MSRB Rules

    G-8 – Books and Records to be Made by Brokers, Dealers, Municipal Securities Dealers, and Municipal Advisors

    13
    G-9 – Preservation of Records
    G-13 – Quotations
    G-14 – Reports of Sales or Purchases
    G-15 – Confirmation, Clearance, Settlement and Other Uniform Practice Requirements with Respect to Transactions
    with Customers
    G-18 – Best Execution
    G-21 – Advertising
    G-25 – Improper Use of Assets
    G-39 – Telemarketing
    G-41 – Anti-money Laundering Compliance Program
    G-47 – Time of Trade Disclosure

  • SEC Rules and Regulations

    Regulation M
    Regulation S-P – Privacy of Consumer Financial Information and Safeguarding Personal Information
    Securities Exchange Act of 1934
    Section 10 – Regulation of the Use of Manipulative and Deceptive Devices
    Section 11(d) – Trading by Members of Exchanges, Brokers and Dealers – “Prohibition on Extension of Credit by
    Broker-Dealer”
    Section 14 – Proxies
    Section 15 – Rules Relating to Over-the-Counter Markets
    Section 20A – Liability to Contemporaneous Traders for Insider Trading
    Section 21A – Civil Penalties for Insider Trading
    10b-1 – Prohibition of Use of Manipulative or Deceptive Devices or Contrivances with Respect to Certain
    Securities Exempted from Registration
    10b-3 – Employment of Manipulative and Deceptive Devices by Brokers or Dealers
    10b-5 – Employment of Manipulative and Deceptive Devices
    10b5-1 – Trading on Material Nonpublic Information in Insider Trading Cases
    10b5-2 – Duties of Trust or Confidence in Misappropriation Insider Trading Cases
    10b-10 – Confirmation of Transactions
    15c1-2 – Fraud and Misrepresentation
    15c1-3 – Misrepresentation by Brokers, Dealers and Municipal Securities Dealers as to Registration
    15c2-12 – Municipal Securities Disclosure
    17a-3 – Records to be Made by Certain Exchange Members, Brokers and Dealers
    17a-4 – Records to be Preserved by Certain Exchange Members, Brokers and Dealers
    Investment Company Act of 1940
    17a-6 – Exemption for Transactions with Portfolio Affiliates
    17a-7 – Exemption of Certain Purchase or Sale Transactions Between an Investment Company and Certain
    Affiliated Persons Thereof

  • Insider Trading & Securities Fraud Enforcement Act of 1988 (ITSFEA)

  • Federal Reserve Board

    Regulation T

  • Federal Trade Commission

    Telemarketing Sales Rule

  • USA PATRIOT Act

    Section 314 – Cooperative Efforts to Deter Money Laundering
    Section 326 – Verification of Identification
    Section 352 – Anti-Money Laundering Programs

  • FINRA By-Laws

    Article I – Definitions
    Article III – Qualifications of Members and Associated Persons
    Article IV – Membership
    Article V – Registered Representatives and Associated Persons
    Article VI – Dues, Assessments, and Other Charges
    Article XII – Disciplinary Proceedings
    Article XV – Limitations of Power

  • FINRA Rules

    0100 Series – General Standards
    1000 Series – Member Application and Associated Person Registration
    1122 – Filing of Misleading Information as to Membership or Registration
    1250 – Continuing Education Requirements
    2060 – Use of Information Obtained in Fiduciary Capacity
    2263 – Arbitration Disclosure to Associated Persons Signing or Acknowledging Form U4
    2267 – Investor Education and Protection
    2310(c) – Non-cash Compensation
    2320(g)(4) – Non-cash Compensation
    2341(l)(5) – Non-cash Compensation
    3110(e) – Responsibility of Member to Investigate Applicants for Registration
    3220 – Influencing or Rewarding the Employees of Others
    3270 – Outside Business Activities of Registered Persons
    3280 – Private Securities Transactions of an Associated Person
    4513 – Written Customer Complaints
    4330 – Customer Protection – Permissible Use of Customers’ Securities
    4530 – Reporting Requirements
    5110(h) – Non-cash Compensation
    8312 – FINRA’s BrokerCheck Disclosure

  • CBOE Rule

    7.10 – Fingerprint-based Background Checks of Exchange Directors, Officers, Employees and Others

  • MSRB Rules

    G-2 – Standards of Professional Qualifications
    G-3 – Professional Qualification Requirements
    G-7 – Information Concerning Associated Persons
    G-10 – Delivery of Investment Brochure
    G-20 – Gifts, Gratuities and Non-cash Compensations
    G-37 – Political Contributions and Prohibitions on Municipal Securities Business

  • SEC Rules and Regulations

    Securities Exchange Act of 1934
    Section 3(a)(39) – Definitions and Application of Title (Statutory Disqualification)
    17f-2 – Fingerprinting of Securities Industry Personnel

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[Text](https://legcounsel.house.gov/Comps/Investment%20Company%20Act%20Of%201940.pdf)\n\n## The Investment Adviser Act of 1940\nRequires firms/sole practitioners who make money advising others about securities to register with the SEC\n\n* [Wiki](https://en.wikipedia.org/wiki/Investment_Advisers_Act_of_1940)\n* [Text](https://legcounsel.house.gov/Comps/Investment%20Advisers%20Act%20Of%201940.pdf)\n\n## Links\n* [Source Outline](https://www.finra.org/sites/default/files/SIE_Content_Outline.pdf)"},{"_id":"520b66dbfb1e2014c200009f","treeId":"520ba99dac83621967000090","seq":19786010,"position":0.25,"parentId":"520ba95bac83621967000093","content":"# Section 1: Knowledge of Capital Markets"},{"_id":"520b9620ac83621967000098","treeId":"520ba99dac83621967000090","seq":19785895,"position":1,"parentId":"520b66dbfb1e2014c200009f","content":"# 1.1 Regulatory Entities, Agencies and Market Participants"},{"_id":"520b24e0fb1e2014c20000ce","treeId":"520ba99dac83621967000090","seq":19786701,"position":0.5,"parentId":"520b9620ac83621967000098","content":"# 1.1.1 The Securities and Exchange Commission (SEC)\n\n## Outline\n* The high-level purpose and mission of securities regulation\n* Definition, jurisdiction and authority of the SEC\n\n\n## SEC Mission\nThe mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.[1](https://www.sec.gov/Article/whatwedo.html)\n\n\n\n# Links\n[Homepage](https://www.sec.gov/)\n[Wikipedia](https://en.wikipedia.org/wiki/U.S._Securities_and_Exchange_Commission)"},{"_id":"520b1c28fb1e2014c20000cf","treeId":"520ba99dac83621967000090","seq":19786704,"position":0.75,"parentId":"520b9620ac83621967000098","content":"# 1.1.2 Self-regulatory Organizations (SROs)\n* Purpose and mission of an SRO\n* Jurisdiction and authority of SROs (e.g., CBOE, FINRA, MSRB)\n\n## Legacy\n* NASD (National Association of Securities Dealers) NASDAQ Yo\n* Exchange Enformencement Arms [NYSE](https://www.nyse.com/regulation)\n\n## CBOE \n\n## FINRA\n\n### Links\n[Home](https://www.finra.org/)\n[Wikipedia](Financial Industry Regulatory Authority)\n\n## Links\n[Wikipedia](https://en.wikipedia.org/wiki/Self-regulatory_organization)"},{"_id":"520ba8e6ac83621967000094","treeId":"520ba99dac83621967000090","seq":19786026,"position":1,"parentId":"520b9620ac83621967000098","content":"# 1.1.3 Other Regulators and Agencies\n* Department of the Treasury/IRS\n* State regulators (e.g., NASAA)\n* The Federal Reserve\n* Securities Investor Protection Corporation (SIPC)\n* Federal Deposit Insurance Corporation (FDIC)\n# 1.1.4 Market Participants and their Roles\n* Investors (e.g., accredited, institutional, retail)\n* Broker-Dealers (e.g., introducing, clearing, prime brokers)\n* Investment advisers\n* Municipal advisors\n* Issuers and underwriters\n* Traders and market makers\n* Custodians and trustees\n* Transfer agents\n* Depositories and clearing corporations (e.g., Depository Trust & Clearing Corporation (DTCC), Options Clearing\nCorporation (OCC)) \n"},{"_id":"520ba4d7ac83621967000095","treeId":"520ba99dac83621967000090","seq":19785977,"position":2,"parentId":"520b9620ac83621967000098","content":"# 1.2 Market Structure\n# 1.2.1 Types of Markets\n* The primary market\n* The secondary market (e.g., electronic, over-the-counter (OTC), physical)\n* The third market\n* The fourth market "},{"_id":"520ba22fac83621967000096","treeId":"520ba99dac83621967000090","seq":19785978,"position":3,"parentId":"520b9620ac83621967000098","content":"# 1.3 Economic Factors\n\n# 1.3.1 The Federal Reserve Board’s Impact on Business Activity and Market Stability\n* Monetary vs. fiscal policy\n* Open market activities and impact on economy\n* Different rates (e.g., interest rate, discount rate, federal funds rate)\n# 1.3.2 Business Economic Factors\n* Purpose of financial statements (e.g., balance sheet, income statement)\n* Business cycle (e.g., contraction, trough, expansion, peak)\n* Indicators (e.g., leading, lagging, coincident, inflation)\n* Basic effects on bond and equity markets (e.g., cyclical, defensive, growth) \n\n* Principal economic theories (e.g., Keynesian, Monetarist)\n# 1.3.3 International Economic Factors\n* U.S. balance of payments\n* Gross domestic product (GDP), gross national product (GNP)\n* Exchange rates "},{"_id":"520b97aaac83621967000097","treeId":"520ba99dac83621967000090","seq":19785971,"position":4,"parentId":"520b9620ac83621967000098","content":"# 1.4 Offerings\n* Roles of participants (e.g., investment bankers, underwriting syndicate, municipal advisors)\n* Types of offerings\n* Public vs. private securities offering\n* Initial public offering (IPO), secondary offering and follow-on offering\n* Methods of distribution (e.g., best efforts, firm commitment)\n* Shelf registrations and distributions (e.g., definition, purpose)\n* Types and purpose of offering documents and delivery requirements (e.g., official statement, program disclosure\ndocument, prospectus)\n* Regulatory filing requirements and exemptions (e.g., SEC, blue-sky laws)\n"},{"_id":"520b2f8bfb1e2014c20000bd","treeId":"520ba99dac83621967000090","seq":19785984,"position":5,"parentId":"520b9620ac83621967000098","content":"# Rules"},{"_id":"520b2f5efb1e2014c20000be","treeId":"520ba99dac83621967000090","seq":19785988,"position":1,"parentId":"520b2f8bfb1e2014c20000bd","content":"\n# FINRA Rules\n2266 – SIPC Information\n2269 – Disclosure of Participation or Interest in Primary or Secondary Distribution\n5250 – Payments for Market Making\n"},{"_id":"520b2ee9fb1e2014c20000bf","treeId":"520ba99dac83621967000090","seq":19785986,"position":2,"parentId":"520b2f8bfb1e2014c20000bd","content":"# MSRB Rules\nG-11 – Primary Offering Practices\nG-32 – Disclosures in Connection with Primary Offerings\nG-34 – CUSIP Numbers, New Issue and Market Information Requirements\n"},{"_id":"520b2dc7fb1e2014c20000c0","treeId":"520ba99dac83621967000090","seq":19785987,"position":3,"parentId":"520b2f8bfb1e2014c20000bd","content":"# SEC Rules and Regulations\nSecurities Act of 1933\nSection 7 – Information Required in a Registration Statement\nSection 8 – Taking Effect of Registration Statements and Amendments Thereto\nSection 10 – Information Required in Prospectus\nSection 23 – Unlawful Representations\n215 – Accredited Investor\n431 – Summary Prospectuses\nSchedule A – Schedule of Information Required in Registration Statement\nSchedule B – Schedule of Information Required in Registration Statement\nSecurities Exchange Act of 1934\nSection 3(a) – Definitions and Application of Title\nSection 12 — Registration Requirements for Securities\nSection 15 – Registration and Regulation of Brokers and Dealers\nSection 15A – Registered Securities Associations\nRegulation D – Rules Governing the Limited Offer and Sale of Securities Without Registration Under the\nSecurities Act of 1933\n144 – Persons Deemed Not to Be Engaged in a Distribution and Therefore Not Underwriters\n144A – Private Resales of Securities to Institutions\n145 – Reclassification of Securities, Mergers, Consolidations and Acquisitions of Assets\n147 – \"Part of an Issue,\" \"Person Resident,\" and \"Doing Business Within\" for Purposes of Section 3(a)(11)\n164 – Post-filing Free Writing Prospectuses in Connection with Certain Registered Offerings "},{"_id":"520b674cfb1e2014c200009e","treeId":"520ba99dac83621967000090","seq":19785892,"position":1.25,"parentId":"520ba95bac83621967000093","content":"# Section 2: Understanding Products and Their Risks"},{"_id":"520b8e86ac83621967000099","treeId":"520ba99dac83621967000090","seq":19785902,"position":1,"parentId":"520b674cfb1e2014c200009e","content":"# 2.1 Products\n\n"},{"_id":"520b8d87ac8362196700009a","treeId":"520ba99dac83621967000090","seq":19795175,"position":1,"parentId":"520b8e86ac83621967000099","content":"# 2.1.1 Equity Securities\nKnowledge of:\n* Ownership (e.g., order of liquidation, limited liability)\n* Voting rights\n* Convertible\n* Control and restrictions (e.g., SEC Rule 144)\n\n## Links\n[Kahn Academy](https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds)"},{"_id":"51f0f28eb6b21c22520000dc","treeId":"520ba99dac83621967000090","seq":19795137,"position":1,"parentId":"520b8d87ac8362196700009a","content":"# Common Stock\nGrants holder a percentage right to:\n* Profit\n* Voting on Corporate Policy\n* Voting on Board Members\n\n## Links\n[Wiki](https://en.wikipedia.org/wiki/Common_stock)"},{"_id":"51f0f250b6b21c22520000dd","treeId":"520ba99dac83621967000090","seq":19795154,"position":2,"parentId":"520b8d87ac8362196700009a","content":"# Preferred stock\n\n## Features\n* Preference in dividends (if dividends are paid, must pay all preferred shareholders first) \n* Preference in assets, in the event of liquidation.\n* Convertibility to common stock.\n* Call-ability (Redeemable)\n* Nonvoting.\n* Higher dividend yields.\n\n## Links\n[Wiki](https://en.wikipedia.org/wiki/Preferred_stock)"},{"_id":"51f0df15b6b21c22520000de","treeId":"520ba99dac83621967000090","seq":19797134,"position":3,"parentId":"520b8d87ac8362196700009a","content":"# Rights\nOption to purchase from the issuing corp at a fixed price. Shorter lifetimes than warrents\n"},{"_id":"51f0d4fab6b21c22520000df","treeId":"520ba99dac83621967000090","seq":19797135,"position":4,"parentId":"520b8d87ac8362196700009a","content":"# Warrents\nEntitles holder to buy a security at a fixed value until until an expiry date\n\n## Vs Calls\n* Issued by Private parties, not exchanges\n* Come from newly issued stock\n* Longer expiration time than rights\n\n#links\n<a src=\"https://en.wikipedia.org/wiki/Warrant_(finance)\">\nWiki\n</a>"},{"_id":"51f0cc95b6b21c22520000e0","treeId":"520ba99dac83621967000090","seq":19795171,"position":5,"parentId":"520b8d87ac8362196700009a","content":"# American Depositary Receipts (ADRs)\nSecurities issued by foreign entities but traded on American exchanges in USD\n\n## Links\n[Wikipedia](https://en.wikipedia.org/wiki/American_depositary_receipt)"},{"_id":"51e4c8e77c1ac2d4860000e1","treeId":"520ba99dac83621967000090","seq":19797223,"position":6,"parentId":"520b8d87ac8362196700009a","content":"# Ownership\n\n## Order of Liquidation\n* Secured creditors are first in line. (They get the collateral back)\n* Next are unsecured creditors, including employees who are owed money. (They get their wages)\n* Stockholders are paid last. (Haha)\n"},{"_id":"520b8c6dac8362196700009b","treeId":"520ba99dac83621967000090","seq":19795125,"position":2,"parentId":"520b8e86ac83621967000099","content":"# 2.1.2 Debt Instruments\n* Municipal securities\n* General obligation (GO) bonds\n* Revenue bonds\n* Others (e.g., special type bonds, taxable municipal securities, short-term obligations)\n* Others (e.g., money market instruments, certificate of deposit (CD), bankers’ acceptance, commercial paper)\nKnowledge of:\n* Varying maturities\n* Generate income (e.g., interest)\n* Coupon value\n* Par value\n* Yield\n* Ratings and rating agencies\n* Callable and convertible features\n* Short-term vs. long-term characteristics\n* Relationship between price and interest rate\n* Negotiated vs. competitive offerings via underwriters and syndicates\n* Auction"},{"_id":"520070aefb1e2014c20000da","treeId":"520ba99dac83621967000090","seq":19791503,"position":1,"parentId":"520b8c6dac8362196700009b","content":"# Treasury Securities \nTreasury securities (e.g., bills, notes, receipts, bonds)\n\n## TBill\n* #Zero_Coupon Bond \n* No Interest\n* Maturity 4/8/13/26/52 weeks.\n* Sold at Discount of Par Value. Matures to face value\n\nT bills are sold on a schedule and I bet someone would quiz you on that\n\n### Formula\n![](https://wikimedia.org/api/rest_v1/media/math/render/svg/1c22fda727849f31e6d523bae0a714d93d04460f)\n\n\n# T note\n* Six Month #Coupon\n* 2/3/5/7/10 Maturities\n* $100 Increments\n\n# T Bond\n* Six Month #Coupon\n* 30 Year Maturity\n\n## Links\n* [Wikipedia](https://en.wikipedia.org/wiki/United_States_Treasury_security)\n* [Auctions](https://www.treasury.gov/resource-center/data-chart-center/quarterly-refunding/Documents/auctions.pdf)"},{"_id":"51ffef3efb1e2014c20000db","treeId":"520ba99dac83621967000090","seq":19792016,"position":2,"parentId":"520b8c6dac8362196700009b","content":"# Agency (e.g., asset-backed and mortgage-backed securities)\n\n## Regulation AB Definition\n\"a security that is primarily serviced by the cash flows of a discrete pool of receivables or other financial assets\"\n\n[RegAB](https://www.sec.gov/divisions/corpfin/guidance/regulation-ab-interps.htm) \n\n#TODO Expand\n\n## Links\n\n[AssetWiki](https://en.wikipedia.org/wiki/Asset-backed_security)\n[MortgageWiki](https://en.wikipedia.org/wiki/Mortgage-backed_security)"},{"_id":"51fcd8873822f503c70000d8","treeId":"520ba99dac83621967000090","seq":19792039,"position":3,"parentId":"520b8c6dac8362196700009b","content":"# Corporate Bond\n\n## Terms\n* Face/Par: Principle value\n* Coupon: Interest at intervals\n* Maturation: Date principle is owed in full\n\nThey don't pay back the face value until maturation date \n\n# Zero-Coupon Bond\n* Sold at a discount\n* Face value paid at Maturation\n\n\n## Links\n[wiki](https://en.wikipedia.org/wiki/Corporate_bond)\n"},{"_id":"51fcd80c3822f503c70000d9","treeId":"520ba99dac83621967000090","seq":19792020,"position":4,"parentId":"520b8c6dac8362196700009b","content":"# Municipal Bond\n\n## Links\n[Wiki](https://en.wikipedia.org/wiki/Municipal_bond)"},{"_id":"520b84bafb1e2014c2000097","treeId":"520ba99dac83621967000090","seq":19785860,"position":3,"parentId":"520b8e86ac83621967000099","content":"# 2.1.3 Options\n* Types of options\n* Puts and calls\n* Equity vs. index\nKnowledge of:\n* Hedging or speculation\n* Expiration date\n* Strike price\n* Premium \n\n7\n* Underlying or cash settlement\n* In-the-money, out-of-the money\n* Covered vs. uncovered\n* American vs. European\n* Exercise and assignment\n* Varying strategies (e.g., long, short)\n* Special disclosures (e.g., Options Disclosure Document (ODD))\n* Options Clearing Corporation (OCC) for listed options"},{"_id":"520b8436fb1e2014c2000098","treeId":"520ba99dac83621967000090","seq":19785989,"position":4,"parentId":"520b8e86ac83621967000099","content":"# 2.1.4 Packaged Products\n* Investment companies\n* Types of investment companies\n* Closed-end funds\n* Open-end funds\n* Unit investment trusts (UITs)\n* Variable contracts/annuities\nKnowledge of:\n* Loads\n* Share classes\n* Net asset value (NAV)\n* Disclosures\n* Costs and fees\n* Breakpoints\n* Right of accumulation (ROA)\n* Letter of intent (LOI)\n* Net transactions\n* Surrender charges\n* Sales charges"},{"_id":"520b8393fb1e2014c2000099","treeId":"520ba99dac83621967000090","seq":19785864,"position":5,"parentId":"520b8e86ac83621967000099","content":"# 2.1.5 Municipal Fund Securities\n* 529 Plans\n* Prepaid tuition\n* Savings plans\n* Local government investment pools (LGIPs)\n* ABLE accounts\nKnowledge of:\n* Municipal fund securities\n* Owner vs. beneficiary\n* Restricted use of plan assets\n* Tax advantages\n* Direct or adviser sold"},{"_id":"520b81c1fb1e2014c200009a","treeId":"520ba99dac83621967000090","seq":19785866,"position":6,"parentId":"520b8e86ac83621967000099","content":"# 2.1.6 Direct Participation Programs (DPPs)\n* Types of DPPs\n* Limited partnerships\n* Tenants in common (TIC) \n\n8\nKnowledge of:\n* Pass-through tax treatment\n* Unlisted\n* Generally illiquid"},{"_id":"520b812afb1e2014c200009b","treeId":"520ba99dac83621967000090","seq":19785871,"position":7,"parentId":"520b8e86ac83621967000099","content":"# 2.1.7 Real Estate Investment Trusts (REITs)\n* Types of REITs\n* Private\n* Registered, non-listed\n* Listed\nKnowledge of:\n* Real estate equity or debt\n* Tax-advantaged income without double taxation"},{"_id":"520b80d3fb1e2014c200009c","treeId":"520ba99dac83621967000090","seq":19785874,"position":8,"parentId":"520b8e86ac83621967000099","content":"# 2.1.8 Hedge Funds\nKnowledge of:\n* Minimum investment\n* Partnership structure\n* Private equity\n* Generally illiquid"},{"_id":"520b7f7afb1e2014c200009d","treeId":"520ba99dac83621967000090","seq":19785880,"position":9,"parentId":"520b8e86ac83621967000099","content":"# 2.1.9 Exchange-traded Products (ETPs)\n* Types of ETPs\n* Exchange-traded funds (ETFs)\n* Exchange-traded notes (ETNs)\nKnowledge of:\n* Alternative investments to mutual funds\n* Fee considerations\n* Active vs. passive"},{"_id":"520b5eb6fb1e2014c20000a1","treeId":"520ba99dac83621967000090","seq":19785920,"position":2,"parentId":"520b674cfb1e2014c200009e","content":"# 2.2 Investment Risks"},{"_id":"520b5e59fb1e2014c20000a2","treeId":"520ba99dac83621967000090","seq":19785918,"position":1,"parentId":"520b5eb6fb1e2014c20000a1","content":"* Definition and Identification of Risk Types\n\n* Capital\n* Credit\n* Currency\n* Inflationary/purchasing power\n* Interest rate/reinvestment\n* Liquidity\n* Market/systematic\n* Non-systematic\n* Political\n* Prepayment\n* Strategies for Mitigation of Risk\n* Diversification\n* Portfolio rebalancing\n* Hedging \n\n"},{"_id":"520b5cd6fb1e2014c20000a3","treeId":"520ba99dac83621967000090","seq":19785916,"position":2,"parentId":"520b5eb6fb1e2014c20000a1","content":"# Rules\nFINRA Rules\n2261 – Disclosure of Financial Condition\n2262 – Disclosure of Financial Relationship with Issuer\n2310 – Direct Participation Programs\n2330 – Members’ Responsibilities Regarding Deferred Variable Annuities\n2342 – “Breakpoint” Sales\n2360 – Options\nMSRB Rules\nD-12 – Definition of Municipal Fund Securities\nG-17 – Conduct of Municipal Securities and Municipal Advisory Activities\nG-30 – Pricing and Commissions\nG-45 – Reporting of Information on Municipal Fund Securities\nCBOE Rule\nRule 1.1 – Definitions\nSEC Rules and Regulations\nSecurities Exchange Act of 1934\n3a11-1 – Definition of the Term \"Equity Security\"\n10b-18 – Purchases of Certain Equity Securities by the Issuer and Others\nInvestment Company Act of 1940\nSection 3(a) – Definitions - “Investment Company”\nSection 4 – Classification of Investment Companies\nSection 5 – Subclassification of Management Companies\n12b-1 – Distribution of Shares by Registered Open-end Management Investment Company "},{"_id":"520b5bc5fb1e2014c20000a4","treeId":"520ba99dac83621967000090","seq":19785921,"position":3,"parentId":"520ba95bac83621967000093","content":"# Section 3: Understanding Trading, Customer Accounts and Prohibited Activities \n"},{"_id":"520b597afb1e2014c20000a5","treeId":"520ba99dac83621967000090","seq":19785924,"position":1,"parentId":"520b5bc5fb1e2014c20000a4","content":"# 3.1 Trading, Settlement and Corporate Actions \n"},{"_id":"520b57f5fb1e2014c20000a6","treeId":"520ba99dac83621967000090","seq":19785925,"position":1,"parentId":"520b597afb1e2014c20000a5","content":"# 3.1.1 Orders and Strategies\n* Types of orders (e.g., market, stop, limit, good-til-canceled (GTC), discretionary vs. non-discretionary, solicited\nvs. unsolicited)\n* Buy and sell, bid-ask\n* Trade capacity (e.g., principal, agency)\n* Long and short, naked and covered\n* Bearish and bullish "},{"_id":"520b567bfb1e2014c20000a7","treeId":"520ba99dac83621967000090","seq":19785930,"position":2,"parentId":"520b597afb1e2014c20000a5","content":"# 3.1.2 Investment Returns\n* Components of return (e.g., interest, dividends, realized/unrealized gains, return on capital)\n* Different types of dividends (e.g., cash, stock)\n* Dividend payment dates (e.g., record date, ex-date, payable date)\n* Concepts of measurement (e.g., yield, yield to maturity (YTM), yield to call (YTC), total return, basis points)\n* Cost basis requirements\n* Benchmarks and indices"},{"_id":"520b55c9fb1e2014c20000a8","treeId":"520ba99dac83621967000090","seq":19785929,"position":3,"parentId":"520b597afb1e2014c20000a5","content":"# 3.1.3 Trade Settlement\n* Settlement time frames for various products (e.g., T, T + 1, T + 2)\n* Physical vs. book entry (e.g., delivery and settlement) \n"},{"_id":"520b556afb1e2014c20000a9","treeId":"520ba99dac83621967000090","seq":19785928,"position":4,"parentId":"520b597afb1e2014c20000a5","content":"# 3.1.4 Corporate Actions\n* Types of corporate actions (e.g., splits, reverse splits, buybacks, tender offers, exchange offers, rights offers,\nmergers and acquisitions (M&A))\n* Impact of stock splits and reverse stock splits on market price and cost basis\n* Adjustments to securities subject to corporate actions\n* Delivery of notices and corporate action deadlines\n* Proxies and proxy voting \n"},{"_id":"520b5480fb1e2014c20000aa","treeId":"520ba99dac83621967000090","seq":19785931,"position":2,"parentId":"520b5bc5fb1e2014c20000a4","content":"# 3.2 Customer Accounts and Compliance Considerations "},{"_id":"520b53bcfb1e2014c20000ab","treeId":"520ba99dac83621967000090","seq":19785932,"position":1,"parentId":"520b5480fb1e2014c20000aa","content":"# 3.2.1 Account Types and Characteristics\n* Cash\n* Margin\n* Options\n* Discretionary vs. non-discretionary\n* Fee-based vs. commission\n* Educational accounts \n"},{"_id":"520b5258fb1e2014c20000ac","treeId":"520ba99dac83621967000090","seq":19785936,"position":2,"parentId":"520b5480fb1e2014c20000aa","content":"# 3.2.2 Customer Account Registrations\n* Individual\n* Joint\n* Corporate/institutional\n* Trust (e.g., revocable, irrevocable)\n* Custodial (e.g., UTMA)\n* Partnerships\n* Retirement (e.g., individual retirement account (IRA), qualified plans)\n* Types and characteristics \n\n* Required minimum distributions\n* Contributions "},{"_id":"520b50b3fb1e2014c20000ad","treeId":"520ba99dac83621967000090","seq":19785937,"position":3,"parentId":"520b5480fb1e2014c20000aa","content":"# 3.2.3 Anti-money Laundering (AML)\n* Definition of money laundering\n* Stages of money laundering (e.g., structuring, layering, placement)\n* AML compliance program\n* Suspicious Activity Report (SAR)\n* Currency Transaction Report (CTR)\n* FinCEN\n* Office of Foreign Asset Control (OFAC) and the Specially Designated Nationals and Blocked Persons (SDNs)\nList \n"},{"_id":"520b4ed4fb1e2014c20000ae","treeId":"520ba99dac83621967000090","seq":19785938,"position":4,"parentId":"520b5480fb1e2014c20000aa","content":"# 3.2.4 Books and Records and Privacy Requirements\n* Books and records retention requirements\n* Confirmations and account statements\n* Holding of customer mail\n* Business continuity plans (BCP)\n* Customer protection and custody of assets\n* Privacy requirements (e.g., Regulation S-P)\n◦ Nonpublic personal information\n◦ Confidentiality of information\n◦ Privacy notifications\n◦ Safeguard requirements "},{"_id":"520b4e4cfb1e2014c20000af","treeId":"520ba99dac83621967000090","seq":19785939,"position":5,"parentId":"520b5480fb1e2014c20000aa","content":"# 3.2.5 Communications with the Public and General Suitability Requirements\n* Communications with the public and telemarketing\n◦ Classifications and general requirements\n◦ Do-not-call list\n* Suitability requirements\n◦ Know-your-customer (KYC)\n◦ General requirements (e.g., what constitutes a recommendation)"},{"_id":"520b4e27fb1e2014c20000b0","treeId":"520ba99dac83621967000090","seq":19785940,"position":3,"parentId":"520b5bc5fb1e2014c20000a4","content":"# 3.3 Prohibited Activities "},{"_id":"520b4dc2fb1e2014c20000b1","treeId":"520ba99dac83621967000090","seq":19785942,"position":1,"parentId":"520b4e27fb1e2014c20000b0","content":"# 3.3.1 Market Manipulation\n* Definition of market manipulation\n* Types of market manipulation (e.g., market rumors, pump and dump, front running, excessive trading, marking\nthe close, marking the open, backing away, freeriding) \n"},{"_id":"520b4d45fb1e2014c20000b2","treeId":"520ba99dac83621967000090","seq":19785944,"position":2,"parentId":"520b4e27fb1e2014c20000b0","content":"# 3.3.2 Insider Trading\n* Definition of insider trading\n* Definition of material nonpublic information\n* Identifying involved parties\n* Penalties (e.g., fines, expulsion, incarceration) "},{"_id":"520b4cdafb1e2014c20000b3","treeId":"520ba99dac83621967000090","seq":19785951,"position":3,"parentId":"520b4e27fb1e2014c20000b0","content":"# 3.3.3 Other Prohibited Activities\n* Restrictions preventing associated persons from purchasing initial public offerings (IPOs)\n* Use of manipulative, deceptive or other fraudulent devices\n* Improper use of customers’ securities or funds\n◦ Borrowing from customers\n◦ Sharing in customer accounts\n* Financial exploitation of seniors\n* Activities of unregistered persons\n◦ Prohibition against paying commissions to unregistered persons\n◦ Prohibition against solicitation of customers and taking orders\n* Falsifying or withholding documents\n◦ Signatures of convenience\n◦ Responding to regulatory requests\n* Prohibited activities related to maintenance of books and records (e.g., falsifying records and improper\nmaintenance/retention of records)"},{"_id":"520b4c7dfb1e2014c20000b4","treeId":"520ba99dac83621967000090","seq":19785952,"position":4,"parentId":"520b4e27fb1e2014c20000b0","content":"# Rules"},{"_id":"520b4af2fb1e2014c20000b6","treeId":"520ba99dac83621967000090","seq":19785954,"position":1,"parentId":"520b4c7dfb1e2014c20000b4","content":"# FINRA Rules\n2010 – Standards of Commercial Honor and Principles of Trade\n2020 – Use of Manipulative, Deceptive or Other Fraudulent Devices\n2040 – Payments to Unregistered Persons\n2090 – Know Your Customer\n2111 – Suitability\n2120 – Commissions, Mark Ups and Charges\n2150 – Improper Use of Customers’ Securities or Funds; Prohibition Against Guarantees and Sharing in Accounts\n2165 – Financial Exploitation of Specified Adults\n2210 – Communications with the Public\n2231 – Customer Account Statements\n2251 – Forwarding of Proxy and Other Issuer-related Materials\n2264 – Margin Disclosure Statement\n2232 – Customer Confirmations\n3150 – Holding of Customer Mail\n3210 – Accounts at Other Broker-Dealers and Financial Institutions\n3230 – Telemarketing\n3240 – Borrowing from or Lending to Customers\n3250 – Designation of Accounts\n3260 – Discretionary Accounts\n3310 – Anti-money Laundering Compliance Program\n4210 – Margin Requirements\n4370 – Business Continuity Plans and Emergency Contact Information\n4511 – General Requirements\n4512 – Customer Account Information\n4514 – Authorization Records for Negotiable Instruments Drawn From a Customer's Account\n5130 – Restrictions on the Purchase and Sale of Initial Equity Public Offerings\n5210 – Publication of Transactions and Quotations\n5220 – Offers at Stated Prices\n5230 – Payments Involving Publications that Influence the Market Price of a Security\n5240 – Anti-intimidation/Coordination\n5270 – Front Running of Block Transactions\n5280 – Trading Ahead of Research Reports\n5290 – Order Entry and Execution Practices\n5310 – Best Execution and Interpositioning\n5320 – Prohibition Against Trading Ahead of Customer Orders\n6438 – Displaying Priced Quotations in Multiple Quotation Mediums"},{"_id":"520b4a90fb1e2014c20000b7","treeId":"520ba99dac83621967000090","seq":19785956,"position":2,"parentId":"520b4c7dfb1e2014c20000b4","content":"# MSRB Rules\nG-8 – Books and Records to be Made by Brokers, Dealers, Municipal Securities Dealers, and Municipal Advisors \n\n13\nG-9 – Preservation of Records\nG-13 – Quotations\nG-14 – Reports of Sales or Purchases\nG-15 – Confirmation, Clearance, Settlement and Other Uniform Practice Requirements with Respect to Transactions\nwith Customers\nG-18 – Best Execution\nG-21 – Advertising\nG-25 – Improper Use of Assets\nG-39 – Telemarketing\nG-41 – Anti-money Laundering Compliance Program\nG-47 – Time of Trade Disclosure "},{"_id":"520b49c4fb1e2014c20000b8","treeId":"520ba99dac83621967000090","seq":19785957,"position":3,"parentId":"520b4c7dfb1e2014c20000b4","content":"# SEC Rules and Regulations\nRegulation M\nRegulation S-P – Privacy of Consumer Financial Information and Safeguarding Personal Information\nSecurities Exchange Act of 1934\nSection 10 – Regulation of the Use of Manipulative and Deceptive Devices\nSection 11(d) – Trading by Members of Exchanges, Brokers and Dealers – “Prohibition on Extension of Credit by\nBroker-Dealer”\nSection 14 – Proxies\nSection 15 – Rules Relating to Over-the-Counter Markets\nSection 20A – Liability to Contemporaneous Traders for Insider Trading\nSection 21A – Civil Penalties for Insider Trading\n10b-1 – Prohibition of Use of Manipulative or Deceptive Devices or Contrivances with Respect to Certain\nSecurities Exempted from Registration\n10b-3 – Employment of Manipulative and Deceptive Devices by Brokers or Dealers\n10b-5 – Employment of Manipulative and Deceptive Devices\n10b5-1 – Trading on Material Nonpublic Information in Insider Trading Cases\n10b5-2 – Duties of Trust or Confidence in Misappropriation Insider Trading Cases\n10b-10 – Confirmation of Transactions\n15c1-2 – Fraud and Misrepresentation\n15c1-3 – Misrepresentation by Brokers, Dealers and Municipal Securities Dealers as to Registration\n15c2-12 – Municipal Securities Disclosure\n17a-3 – Records to be Made by Certain Exchange Members, Brokers and Dealers\n17a-4 – Records to be Preserved by Certain Exchange Members, Brokers and Dealers\nInvestment Company Act of 1940\n17a-6 – Exemption for Transactions with Portfolio Affiliates\n17a-7 – Exemption of Certain Purchase or Sale Transactions Between an Investment Company and Certain\nAffiliated Persons Thereof"},{"_id":"520b4767fb1e2014c20000b9","treeId":"520ba99dac83621967000090","seq":19785958,"position":4,"parentId":"520b4c7dfb1e2014c20000b4","content":"# Insider Trading & Securities Fraud Enforcement Act of 1988 (ITSFEA) \n"},{"_id":"520b4739fb1e2014c20000ba","treeId":"520ba99dac83621967000090","seq":19785961,"position":5,"parentId":"520b4c7dfb1e2014c20000b4","content":"# Federal Reserve Board \nRegulation T"},{"_id":"520b46ddfb1e2014c20000bb","treeId":"520ba99dac83621967000090","seq":19785964,"position":6,"parentId":"520b4c7dfb1e2014c20000b4","content":"# Federal Trade Commission\nTelemarketing Sales Rule"},{"_id":"520b4644fb1e2014c20000bc","treeId":"520ba99dac83621967000090","seq":19785965,"position":7,"parentId":"520b4c7dfb1e2014c20000b4","content":"# USA PATRIOT Act\nSection 314 – Cooperative Efforts to Deter Money Laundering\nSection 326 – Verification of Identification\nSection 352 – Anti-Money Laundering Programs "},{"_id":"520b2ae8fb1e2014c20000c1","treeId":"520ba99dac83621967000090","seq":19785990,"position":4,"parentId":"520ba95bac83621967000093","content":"# Section 4: Overview of the Regulatory Framework \n"},{"_id":"520b2abbfb1e2014c20000c2","treeId":"520ba99dac83621967000090","seq":19785991,"position":1,"parentId":"520b2ae8fb1e2014c20000c1","content":"# 4.1 SRO Regulatory Requirements for Associated Persons \n"},{"_id":"520b2a8dfb1e2014c20000c3","treeId":"520ba99dac83621967000090","seq":19785992,"position":1,"parentId":"520b2abbfb1e2014c20000c2","content":"# 4.1.1 Registration and Continuing Education\n* SRO qualification and registration requirements\n◦ Definition of registered vs. non-registered person\n◦ Permitted activities of registered and non-registered persons\n◦ Ineligibility for membership or association\n◦ Background checks\n◦ Fingerprinting\n◦ Statutory disqualification\n◦ Failing to register an associated person\n* State registration requirements (e.g., blue-sky laws)\n* Continuing Education (CE) requirement\n◦ Firm Element\n◦ Regulatory Element"},{"_id":"520b29d0fb1e2014c20000c4","treeId":"520ba99dac83621967000090","seq":19785993,"position":2,"parentId":"520b2ae8fb1e2014c20000c1","content":"# 4.2 Employee Conduct and Reportable Events"},{"_id":"520b2995fb1e2014c20000c5","treeId":"520ba99dac83621967000090","seq":19785994,"position":1,"parentId":"520b29d0fb1e2014c20000c4","content":"# 4.2.1 Employee Conduct\n* Form U4 and Form U5 (e.g., purpose, when to update forms)\n* Consequences of filing misleading information or omitting information\n* Customer complaints\n* Potential red flags "},{"_id":"520b2876fb1e2014c20000c7","treeId":"520ba99dac83621967000090","seq":19785997,"position":2,"parentId":"520b29d0fb1e2014c20000c4","content":"# 4.2.2 Reportable Events\n* Outside business activities\n* Private securities transactions\n* Reporting of political contributions and consequences for exceeding dollar contribution thresholds\n* Dollar and value limits for gifts and gratuities and non-cash compensation\n* Business entertainment\n* Felony, financial-related misdemeanors, liens, bankruptcy "},{"_id":"520b2815fb1e2014c20000c8","treeId":"520ba99dac83621967000090","seq":19785999,"position":3,"parentId":"520b29d0fb1e2014c20000c4","content":"# Rules"},{"_id":"520b27f7fb1e2014c20000c9","treeId":"520ba99dac83621967000090","seq":19786000,"position":1,"parentId":"520b2815fb1e2014c20000c8","content":"# FINRA By-Laws\nArticle I – Definitions\n Article III – Qualifications of Members and Associated Persons\nArticle IV – Membership\nArticle V – Registered Representatives and Associated Persons\nArticle VI – Dues, Assessments, and Other Charges\nArticle XII – Disciplinary Proceedings\nArticle XV – Limitations of Power "},{"_id":"520b27b5fb1e2014c20000ca","treeId":"520ba99dac83621967000090","seq":19786003,"position":2,"parentId":"520b2815fb1e2014c20000c8","content":"# FINRA Rules\n 0100 Series – General Standards\n1000 Series – Member Application and Associated Person Registration\n 1122 – Filing of Misleading Information as to Membership or Registration\n 1250 – Continuing Education Requirements\n2060 – Use of Information Obtained in Fiduciary Capacity\n 2263 – Arbitration Disclosure to Associated Persons Signing or Acknowledging Form U4\n2267 – Investor Education and Protection\n2310(c) – Non-cash Compensation\n2320(g)(4) – Non-cash Compensation\n2341(l)(5) – Non-cash Compensation\n3110(e) – Responsibility of Member to Investigate Applicants for Registration\n3220 – Influencing or Rewarding the Employees of Others\n3270 – Outside Business Activities of Registered Persons\n3280 – Private Securities Transactions of an Associated Person\n4513 – Written Customer Complaints\n 4330 – Customer Protection – Permissible Use of Customers' Securities\n 4530 – Reporting Requirements\n5110(h) – Non-cash Compensation\n 8312 – FINRA’s BrokerCheck Disclosure "},{"_id":"520b277bfb1e2014c20000cb","treeId":"520ba99dac83621967000090","seq":19786004,"position":3,"parentId":"520b2815fb1e2014c20000c8","content":"# CBOE Rule\n7.10 – Fingerprint-based Background Checks of Exchange Directors, Officers, Employees and Others \n"},{"_id":"520b26d6fb1e2014c20000cc","treeId":"520ba99dac83621967000090","seq":19786006,"position":4,"parentId":"520b2815fb1e2014c20000c8","content":"# MSRB Rules\nG-2 – Standards of Professional Qualifications\nG-3 – Professional Qualification Requirements\nG-7 – Information Concerning Associated Persons\nG-10 – Delivery of Investment Brochure\nG-20 – Gifts, Gratuities and Non-cash Compensations\nG-37 – Political Contributions and Prohibitions on Municipal Securities Business "},{"_id":"520b269dfb1e2014c20000cd","treeId":"520ba99dac83621967000090","seq":19786008,"position":5,"parentId":"520b2815fb1e2014c20000c8","content":"# SEC Rules and Regulations\nSecurities Exchange Act of 1934\nSection 3(a)(39) – Definitions and Application of Title (Statutory Disqualification)\n17f-2 – Fingerprinting of Securities Industry Personnel "},{"_id":"520ad8aefb1e2014c20000d0","treeId":"520ba99dac83621967000090","seq":19786178,"position":2,"parentId":null,"content":"# Practice Exam Notes\n\n## MRSP Political Contributions\n* Topic MSRB\n* Potlical Contributions capped at $250\n* [Source](http://www.msrb.org/Rules-and-Interpretations/MSRB-Rules/General/Rule-G-37.aspx])\n\n\n## Pricing Bonds\n* [Pricing](https://www.graduatetutor.com/corporate-finance-tutoring/yields-bond-valuation-pricing/)\n\n## Stocks vs treasuries\n* Util Stocks maintain value\n* T Bills are short term securities\n* T Bonds are long term securities\n* Blue chip stocks are reliable\n\n## Syndication Desk\n* [Link](https://www.wallstreetoasis.com/forums/syndicate-desk-what-goes-on-there)\n\n\n## Insider Trading\n* Which shit sounds public\n\n## SEC Reg S-P\n[Link](https://www.finra.org/rules-guidance/key-topics/customer-information-protection)\n\n## Government Agency Issues\n[Link](https://www.investopedia.com/terms/a/agencysecurities.asp)\n\n"},{"_id":"520a3355fb1e2014c20000d9","treeId":"520ba99dac83621967000090","seq":19795604,"position":8,"parentId":"520ad8aefb1e2014c20000d0","content":"# Wrong shit\n* Bond Pricing\n* No Load Vs Load Mutual Funds\n* Open Ended Investment Company\n* Gotta Report DUIS\n* Bankrupcty stakeholder order\n* Quaterly reporting of customers position\n"}],"tree":{"_id":"520ba99dac83621967000090","name":"FINRA","publicUrl":"clarkrinker_finra"}}