Exercise

Choose the best answer.

1. Which of the following is not an SRO?

A. The MSRB

B. The SEC

C. FINRA

D. The NYSE

2. FINRA’s automated surveillance system uncovered some suspicious trading activity in municipal bonds by the firm of Offenbach and Garner. An initial investigation discovered that the firm executed municipals transactions without being registered with the MSRB and that two of its traders were suspected of insider trading violations. Which of the following FINRA responses is most likely? FINRA would:

A. Turn the matter over to the MSRB for further investigation and enforcement

B. Send its files to the Comptroller of the Currency to investigate insider trading

C. Report the entire matter to the SEC for prosecution

D. Fine Offenbach and Garner for trading municipals without proper registration

Match the term to its description.

A. Municipal bonds

B. Securities Exchange Act of 1934

C. Investment Company Act of 1940

D. MSRB

E. FINRA

F. Securities Act of 1933

G. NYSE

3. _____ Creates rules, subject to SEC approval, for the municipal securities industry.

4. _____ Regulates secondary markets for securities and established the SEC.

5. _____ Regulates mutual funds.

6. _____ Helps enforce MSRB rules for broker-dealers.

7. _____ The largest auction market for stocks in the U.S.

8. _____ Requires the registration of all nonexempt securities and prohibits fraud in the issuance of new securities.

9. _____ Exempted from the registration requirements of the 1933 Act.

Answers

1. B. A self-regulatory organization (SRO) is an industry group