CONSIDERING TAKING THE SIE EXAM? MAKE SURE THAT YOU KNOW ABOUT SRO'S!

The Securities Industry Essentials (SIE) Exam is a necessary first step if you plan to sit for many securities exams, including the Series 6 and Series 7 exams. If you do intend to sit for the SIE Exam, make sure that you know about self-regulatory organizations (SRO's), what they are, who they are, and what their purpose is.

FINRA publishes a Content Outline for the SIE Exam, and Section 1.1.2 specifically talks about Self-Regulatory Organizations(SRO's), indicating that you should expect to see questions about SRO's on your exam.

Bob Eder discusses SRO's in his Study for the Securities Industry Essentials (SIE) Exam. Here is a sample of Bob Eder's treatment:

Self-Regulatory Organizations                                                                      (1.1.2)

Under the SEC's control, and reporting to the SEC, are the several self-regulatory organizations called SRO's. The theory behind this organization is that the SEC cannot regulate the day-to-day practices of participants in the markets as well as organizations that are made up of member broker/dealers themselves, thus the "self-regulatory" part. These SRO's include the New York Stock Exchange (NYSE), the Chicago Board Options Exchange (CBOE), the Municipal Securities Rulemaking Board (MSRB), and the largest of all, the Financial Industry Regulatory Authority (FINRA). Each of the SRO's has direct responsibility over its own members, in accord with the wishes of the SEC. For example, the CBOE makes rules, disciplines, and supervises its members who trade options on the exchange.

Here is a Bob Eder question on SRO's:

All of the following are SRO's except:

a.    NASAA

b.    CBOE

c.    FINRA

d.    MSRB

The answer is (a). NASAA stands for North American Securities Administrators Association and is the organization consisting of the various securities administrators for the states and some other government entities. NASAA is not a self-regulatory organization. However, FINRA, the MSRB and the CBOE are self-regulatory organizations (SRO's) and are made up of broker/dealers for the purpose of self governance and self regulation.

Here is the link to FINRA's Content Outline for the SIE Exam. See the references to Self-Regulatory Organizations(SRO's) in Section 1.1.2. 

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 Self-Regulatory Organizations(SRO's), 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.

P.S. Please consider reviewing Bob Eder's Study for the SIE Exam on Amazon. Your opinion matters!



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