STUDY FOR THE SECURITIES INDUSTRY ESSENTIALS EXAM (SIE) EXAM

If you plan to sit for the Securities Industry Essentials exam, be aware that there are questions on exchange-traded funds (ETFs) and exchanged-traded notes (ETNs), including the differences between the two. FINRA's  specifies Exchange Traded Products (ETPs) in Section 2.1.9 of its SIE Content Outline. Here's an example of what Bob Eder says in his SIE study manual, Study for the Securities Industry Essentials Exam , on pages 131-137: "ETF's Are Not Mutual Funds While most ETF's are considered open-end investment companies and must register under the Investment Company Act as such, the SEC does not consider them to be "mutual funds." Consequently, the rules regarding ETF's are different from those regulating mutual funds. For example, an investor can buy or sell shares of an ETF anytime during the trading day, i.e., during exchange hours of trading. Shares of a mutual fund, by contrast, can be purchased or sold only once daily as of the closing of e...

Plan on taking the Securities Industry Essentials (SIE) exam? If so, be able to distinguish the differences between exchange-traded funds (ETFs) and exchange-traded notes (ETNs). FINRA's Content Outline for the SIE exam lists both ETNs and ETFs in Section 2.1.9. Bob Eder presents a detailed description of ETFs and ETNs in his book Study for the Securities Industry Essentials Exam on pages 131-137, including differentiating characteristics of the two types of exchange-traded products (ETPs). Here is a sample paragraph from Bob Eder's book on the complexity of ETNs: "Complexity (2.1.9) Do not suggest or recommend an ETN to an investor who does not understand or cannot understand how an ETN works, or to a person who is not able to realistically gauge the risk of an ETN. You must first make a determination that the customer can understand the product, and you must document your determination by putting it in writing, giving the reasons and basis for your determination. Thes...