TAKING THE SIE EXAM? MAKE SURE THAT YOU ARE FAMILIAR WITH THE RULES OF THE SECURITIES INVESTORS PROTECTION CORPORATION (SIPC)

Why should you study the rules of SIPC if you are taking the Securities Industry Essentials (SIE) Exam? The answer is that exam questions about SIPC could likely show up on your exam. Why do I say this? I say it because FINRA publishes a 2024 Content Outline for the Securities Industry Essentials Exam, and FINRA specifically mentions SIPC rules  in Section 1.1.3 of the Content Outline.

According to SIPC rules, the following persons are not eligible for SIPC relief in the event that they hold an account with a brokerage firm that goes into SIPC liquidation. Here is what SIPC says about those ineligible:

"Most customers with cash and securities missing from customer accounts are eligible for SIPC protection. SIPC's funds may not be used to pay the claim of any customer of a brokerage firm in liquidation under the Securities Investor Protection Act if that customer is:

  • A general partner, officer, or director of the firm.
  • The beneficial owner of five percent or more of any class of equity security of the firm (other than certain nonconvertible preferred stocks).
  • A limited partner with a participation of five percent or more in the net assets or net profits of the firm.
  • Someone with the power to exercise a controlling influence over the management or policies of the firm.
  • A broker or dealer or bank acting for itself rather than for its customers."                    (https://www.sipc.org/for-investors/investor-faqs)
Bob Eder includes an informative section about SIPC in his Study for the Securities Industry Essentials (SIE) Exam.

Here is the link to FINRA's Content Outline for the SIE Exam dated 2024. Bob Eder's Study for the SIE Exam closely follows FINRA's Content Outline so that you don't waste time in studying material not asked on the Exam.

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 Securities Investors Protection Corp., 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 posting a written review of Bob Eder's Study for the SIE Exam on Amazon and/or Goodreads. Your opinion matters!

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