STUDY FOR THE SECURITIES INDUSTRY ESSENTIALS EXAM (SIE) EXAM

  When investing in stocks and  bonds, an investor needs to be aware that the investing carries various risks and and that it will not always be successful or profitable. Some of these risks entail chances of losing a good part of the investment, and, in some cases, all of it. The Securities Industry Essentials Exam (SIE) asks questions about various investment risks. How do I know this? FINRA publishes a guide to the exam, Securities Industry Essentials Exam Content Outline, and in Section 2.2, FINRA lists "Investment Risks." These risks include capital, credit, currency liquidity, non-systematic, political and prepayment, among others. Bob Eder in his Study for the Securities Industry Essentials (SIE) Exam covers these risks in some detail. Here is an example of Bob Eder's discussion on Investment Risks: Systematic Risk                            ...

  Do you have plans to take the Securities Industry Essentials Exam (SIE)? If so, be forewarned that the SIE exam question bank includes questions on Market Structure, such as the primary market, the secondary market, the third market, and the fourth market. Make sure that you can adequately explain to yourself the differences between these four different market structures. How do we know that the SIE Exam contains questions on these Types of Markets? FINRA tells us in its SIE Content Outline in Section 1.2.1. Bob Eder in his Study for the Securities Industry Essentials (SIE) has a full explanation of these types of markets and  market structure . Here is a sample of Bob Eder's treatment: Third Market                                     (1.2.1) Many times shares of a stock are listed on an exchange, such a...

  Picture yourself CCO (Chief Compliance Officer) of ABC Advisory Firm. One of your I.A. representatives makes use of her personal smart phone to stay in contact with clients by texting, as she finds it easier to communicate in writing on her personal phone when she is out of the office. Does the SEC's Rule on Keeping Written Records of Client Communications include such electronic written messages or SMS if they are sent via personal computers, cell phones, et al? The answer is emphatically yes! The Record Keeping Rule applies, even though the rep or registered associate uses his or her own electronic device or smart phone to send the written communication or message. The SEC recently brought charges against Scotia Capital and HBSC for widespread record-keeping failures, attributed to permitting associates to send written communications via their personal devices. (See SEC Press Release 2023-91.) Here's what the SEC said in this case: "The SEC’s investigation of HSBC Secu...

If you are going to take and pass the Securities Industry Essentials Exam, make sure that you study and know the differences between Short Term Bonds or debt and Long Term Bonds or debt. Why? Because the SIE Exam includes questions on this topic. How do I know? FINRA publishes a Content Outline for the SIE, and Section 2.1.2 lists as required knowledge the Characteristics of Short Term vs Long Term Debt. Bob Eder in his SIE guide,  Study for the Securities Industry Essentials (SIE) Exam , discusses major Short and Long Term Bond Characteristics. Here is a sample of Bob Eder's discussion: Bond Duration vs. Maturity      (2.1.2) A bond’s dollar price will change when interest rates go up or down. The longer the maturity of the bond, the greater will be the percentage price change when interest rates change. However, it is more exact to substitute "duration" for maturity. The greater the duration, the greater the price change when interest rates move up or down. Durat...