TAKING THE SIE EXAM? CAN YOU EXPLAIN THE DIFFERENCES BETWEEN ETFS AND MUTUAL FUNDS?

If you plan to sit for the Securities Industry Essentials exam, be aware that there are questions on exchange-traded funds (ETFs) and exchanged-traded notes (ETNs), including the differences between the two.

FINRA's  specifies Exchange Traded Products (ETPs) in Section 2.1.9 of its SIE Content Outline.

Here's an example of what Bob Eder says in his SIE study manual, Study for the Securities Industry Essentials Exam, on pages 131-137:

"ETF's Are Not Mutual Funds

While most ETF's are considered open-end investment companies and must register under the Investment Company Act as such, the SEC does not consider them to be "mutual funds." Consequently, the rules regarding ETF's are different from those regulating mutual funds. For example, an investor can buy or sell shares of an ETF anytime during the trading day, i.e., during exchange hours of trading. Shares of a mutual fund, by contrast, can be purchased or sold only once daily as of the closing of exchange trading. Furthermore, shares of a mutual fund are always consider new issues and purchases must always be accompanied by a prospectus. Not so with ETF's."

Here is the link to FINRA's Content Outline for the SIE exam. See the references to Exchange Traded Products in FINRA's Content Outline, section 2.1.9.

Study for the Securities Industry Essentials (SIE) Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's book on Amazon.

For questions about Bob Eder's SIE manual, Study for the Securities Industry Essentials (SIE) Exam, or questions in general about the SIE exam, for example,  about Exchange-traded Products, feel free to email Bob Eder at bobeder@bobeder.net.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. See Bob Eder's Author Page on Amazon.com.