Core securities industry vocabulary and regulatory concepts tested on the SIE exam.
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- What does the abbreviation SIE stand for?
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Securities Industry Essentials- Which organization administers and writes the rules for the SIE exam?
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FINRA (Financial Industry Regulatory Authority)- What is the primary U.S. federal regulator of the securities industry?
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The Securities and Exchange Commission (SEC)- What does MSRB stand for?
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Municipal Securities Rulemaking Board- What is a self-regulatory organization (SRO)?
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A non-governmental body that creates and enforces rules for its industry, such as FINRA- What is a broker-dealer?
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A firm that acts as a broker for clients and as a dealer trading for its own account- What is the primary market?
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The market where new securities are issued and sold for the first time- What is the secondary market?
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The market where already-issued securities are traded between investors- What does IPO stand for?
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Initial Public Offering- What is a prospectus?
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A legal document disclosing the details of a securities offering to investors- What is a red herring in securities offerings?
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A preliminary prospectus issued before the offering's price and final details are set- What is an underwriter's role in a securities offering?
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An investment bank that helps the issuer structure, price, and sell new securities- What is firm commitment underwriting?
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The underwriter buys the entire issue itself and assumes the risk of reselling it- What is best efforts underwriting?
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The underwriter sells as much of the issue as it can without guaranteeing the full amount- What are blue sky laws?
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State laws that regulate securities sales to protect investors from fraud
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