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