STUDY FOR THE SECURITIES INDUSTRY ESSENTIALS EXAM (SIE) EXAM

Hedge funds formerly were unregulated and not subject to reporting and filing disclosures with the SEC. Those times don't exist any more. Now, hedge funds must register with the SEC as investment advisers, their employees must register with individual states and take and pass the investment adviser representative exam, and hedge funds must file periodic reports and disclosures with the SEC.  Applicants going to sit for the Securities Industry Essentials (SIE) exam  should be ready to answer questions about hedge funds. FINRA's SIE Content Outline lists hedge funds as important in Section 2.1.8. Bob Eder has a full description of hedge funds in his Study for the Securities Industry Essentials (SIE) Exam . Here is an example of what Bob Eder says about hedge funds: Hedge Funds (2.1.8) These funds are private pools of managed money that largely in the past escaped SEC registration as "investment companies." However, today, hedge funds are far from being unregulated pri...

Do you want to get a good grade on the SIE Exam? Make sure you know the little stuff, for example, know the characteristics of hedge funds. Here's what Bob Eder says in his text, Study for the Securities Industry Essentials Exam , about hedge funds: "A key characteristic of hedge funds is that they are almost always set up as limited partnerships, the investment manager being the fund’s general partner. Monies paid out to the investment manager are almost always considered long-term capital gains, subject to a maximum tax rate of only 20 percent for those with high taxable income. When hedge fund managers talk about "carried interest," this is jargon for their share of realized long-term capital gains, on which they will pay maximum tax of only 20 percent." We indicate here only a small example  on Hedge Funds. Bob Eder's book  covers hedge funds in Chapter 7 on Alternate Investments.  Bob Eder's book,  Study for the Securities Industry...