STUDY FOR THE SECURITIES INDUSTRY ESSENTIALS EXAM (SIE) EXAM

Have you looked at FINRA's SIE Exam Content Outline or Test Specifications? You would find that the largest percentage of questions on the SIE Exam comes from Section 2, Understanding Products and Their Risks . Forty-four percent of the questions on your test will come from this Section. For example, Section 2 covers Equity Securities, including knowledge of voting rights, convertible securities, and selling control or restricted stock. Bob Eder in his Study for the Securities Industry Essentials (SIE) Exam has detailed coverage of these items. Here is a sample of Bob Eder's treatment: Control Stock (2.1.1) Control stock denotes shares that have been purchased by a control person or by an affiliated person. When a person owns shares in a company in which he/she is an officer, controlling person, termed an "affiliated person," there are also restrictions on the sale of that stock. The SEC calls the shares, "control shares." Only control or affiliated perso...

One of the most important qualities of a registered securities representative is never to recommend that a customer or client purchase or sell any security unless the recommendation is suitable for the client. Specifically,  FINRA has established a three-fold prong for observing the Suitability rule. There are three questions that a SIE candidate must ask himself/herself in determining Suitability: 1.     Is the security suitable in itself? In other words, would a reasonable person determine that the security incorporates real and reasonable value? 2.     Is the security recommendation suitable for this particular customer? A security recommendation may be highly reasonable for 90 percent of a rep's customers, but highly unreasonable for the remaining 10 percent. 3.     Finally is the recommendation suitable in terms of quantity? This quantitative evaluation means that a 100 shares may be suitable for this customer Mr. Jones or Ms. Smith...