TAKING THE SIE EXAM? DID YOU KNOW THAT THE LARGEST SECTION OF THE TEST IS SECTION 2 PRODUCTS AND THEIR RISKS?

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 persons may own control stock. For example, Marcy, an employee of DEF Corp. is not an officer of DEF. Nor is she an affiliated person or a person who controls the fortunes of DEF Corp. Therefore, Marcy cannot, by definition, own control stock. However, if Marcy purchases control stock from an affiliate or from an officer of XYZ Corp., Marcy's stock becomes "restricted," and subject to the conditions applicable to the sale of restricted stock, including minimum holding periods.

Here is the link to FINRA's Content Outline for the SIE Exam. See the references to Knowledge of Control Stock in Section 2.1.1.

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 Study for the Securities Industry Essentials (SIE) Exam, or questions in general about the SIE Exam, or about Control Stock, 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.