STUDY FOR THE SECURITIES INDUSTRY ESSENTIALS EXAM (SIE) EXAM

Exercise on most options on stocks settle by delivery of the underlying shares. This means that upon settlement, the writer of a call on GM stock must deliver or sell 100 shares of GM stock. The holder of a put on IBM stock will, upon settlement, deliver or sell 100 shares of IBM stock. However, when it comes to exercise of index options, such as puts and calls on the S&P 100 Index, settlement of exercise is done solely in cash, and not by delivery of the underlying index. Why? Because it would be nearly impossible to deliver the index. How exercise of options is settled is included in FINRA's Content Outline for the SIE exam. See 2.1.3 of the Content Outline. Bob Eder's  Study for the Securities Industry Essentials (SIE) Exam  closely follows FINRA's SIE Content Outline. It lists Content Outline  reference numbers  for each major paragraph in the text, and it links each of the questions in the two end-of-text tests to the SIE Content Outline. Why is this im...

Use caution when purchasing an SIE study text or SIE practice questions. Why? Because some study texts on the market don't follow or use FINRA's Content Outline for the SIE test. Instead, some books or study aids throw in material from other FINRA exams, even though it does not apply to the SIE and is not mentioned in the SIE Content Outline. Bob Eder's Study for the Securities Industry Essentials (SIE) Exam follows FINRA's SIE Content Outline. It lists Content Outline reference numbers for each major paragraph in the text, and it links each of the questions in the two end-of-text tests to the SIE Content Outline. Why is this important? Because it assures the student/reader that the text and practice questions in Study for the Securities Industry Essentials (SIE) Exam stick closely to the items listed by FINRA in its Content Outline, thus saving the reader/student from spending useless hours on materials that are neither important nor relevant for the SIE exam. Here i...

For anyone taking thee Securities Industry Essentials (SIE) exam, one of the confusing topics is Regulation T and the difference between it and regular-way delivery, or settlement of trades. Regulation T is a regulation of the Federal Reserve Board. It requires that a broker/dealer or brokerage firm receive money from retail customers no later than four business days from the trade date. So if Granma Wilkins places an order to purchase 100 shares of XYZ Corp. on Monday, June 1, then Regulation T requires that the broker/dealer receive the monies for the purchase from Grandma Wilkins no later than Friday, June 5. We can abbreviate this rule by saying that Regulation T requires full payment from a retail customer no later than T+4. Regular-way settlement is a different rule. It specifies that the "regular way" of  settling purchases and sales in the brokerage business is T+2, or two business days following trade. Two points to notice. First, both Reg T and regular-way settlemen...

Be careful in preparing for the Securities Industry Essentials exam. Why? Because many study texts include excess material that the SIE exam does not ask about. Many SIE texts on the market today include everything including the kitchen sink. By choosing such a study aid, you could be wasting hours of studying unnecessary subjects. Bob Eder's Study for the Securities Industry Essentials Exam (SIE) avoids unnecessary extraneous topics, and thus unnecessary study hours. How do we do this?  We insert the numerical reference numbers of the SIE Content Outline or syllabus published by FINRA, the creator and administrator of the SIE exam. Furthermore, we insert these outline reference numbers next to each question in the two final exams at the end of the text. These numbers allow the reader or student to easily confirm that the indicated topic is indeed covered by the SIE exam.  For example, the Content Outline for the SIE exam lists certain types of debt instruments that a candid...

When studying for the Securities Industry Essentials (SIE) exam, it is important to study those subjects that are tested on the exam. It would be a waste of time to study materials not on the exam. How do we know what is covered by the SIE exam? The answer is that FINRA publishes a Content Outline for the test. This is why Bob Eder's book Study for the SIE Exam indicates the references numbers of the Content Outline for each major paragraph in the text.  For example, the Content Outline for the SIE exam lists certain types of debt instruments that a candidate needs to know about. These include municipal securities, such as general obligation bonds, revenue bonds, and various other types. Bob Eder's book lists the Content Outline's references numbers - 2.1.2 - next to the topic heading.  Here is the link to FINRA's Content Outline for the SIE exam. Bob Eder J.D.'s book  Study for the Securities Industry Essentials (SIE) Exam  covers the important rules and regulatio...

Study for the Securities Industry Essentials Exam by Bob Eder J.D. includes discussion of Regulation Best Interest, or Regulation BI, which now applies to dealing with retail customers.  Regulation Best Interest now requires every registered representative to view his/her recommendations through the prism of whether such recommendation is in the retail customer's best interests. Regulation BI went into effect on June 30, 2020. Prior to this date, a representative was required merely to assure that his/her recommendations met the test of suitability.  Furthermore, there was no requirement to present a retail customer with conflicts of interest in writing. Regulation BI now requires this disclosure. Regulation BI applies to recommendations also on which type of accounts to recommend to retail customers, not just to securities recommendations. This means before a representative puts a retail customer into a mutual fund account, or into a margin account, or into a wrap fee accoun...

Are you planning to obtain registration as either a Series 6 Mutual Fund/Variable Annuity representative or a Series 7 General Securities representative?  If so, you will need to take and pass the Securities Industry Essentials exam (SIE) before your Series 6 or Series 7 registration will become effective. Bob Eder J.D.'s book  Study for the Securities Industry Essentials (SIE) Exam  covers the important rules and regulations of FINRA and the other SRO's.  Bob Eder's book is available from Amazon in both paperback and Kindle e-book versions.  Here is the link to Bob Eder's book on Amazon . Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law in 2001.