Securities Regulation Quiz

Which of the following is the primary purpose of the Securities Act of 1933?

• To regulate the trading of securities on national exchanges

• To protect investors by requiring full disclosure during securities offerings

• To regulate the activities of investment advisers

• To create the Securities and Exchange Commission (SEC)

The Securities Exchange Act of 1934 primarily addresses which of the following?

• The regulation of securities offerings

• The registration of securities brokers and dealers

• The regulation of securities transactions in the secondary market

• The establishment of retirement accounts

The Investment Advisers Act of 1940 regulates which of the following activities?

• The registration of securities with the SEC

• The disclosure of information in securities offerings

• The conduct of investment advisers and their fiduciary duty to clients

• The regulation of trading on exchanges

Which of the following is required under the Securities Act of 1933 for a company issuing new securities?

• The company must register the securities with the SEC and provide full disclosure.

• The company must file quarterly earnings reports with the SEC.

• The company must provide financial statements to investors.

• The company must register with the SEC, but no disclosure is required.

Under the Securities Act of 1933, a prospectus is required to be provided to:

• All potential buyers of the securities

• Only institutional investors

• The SEC before offering securities to the public

• Only accredited investors

A registered investment adviser (RIA) must file Form ADV with the SEC and:

• The Federal Reserve

• The Financial Industry Regulatory Authority (FINRA)

• State regulators

• The Federal Deposit Insurance Corporation (FDIC)

Which of the following statements is true about the role of the Securities and Exchange Commission (SEC)?

• The SEC sets the interest rates for bonds issued by the government.

• The SEC enforces federal securities laws and regulates the securities industry.

• The SEC directly sets the prices of securities traded on the exchanges.

• The SEC only regulates stock exchanges, not investment advisers.

Under the Investment Advisers Act of 1940, which of the following is considered an investment adviser?

• A broker-dealer providing investment recommendations to clients for a fee

• A mutual fund manager overseeing a fund’s operations

• A person or firm that provides investment advice for compensation

• A bank offering savings accounts to customers

A firm is required to register as an investment adviser with the SEC if:

• The firm advises more than 25 clients annually

• The firm manages over $110 million in assets

• The firm only advises institutional investors

• The firm has a net worth of over $5 million

A “proxy” refers to:

• A written document authorizing another person to vote on behalf of a shareholder

• A formal complaint filed with the SEC by an investor

• A regulatory body overseeing securities trades

• A financial instrument used for hedging