STUDY FOR THE SECURITIES INDUSTRY ESSENTIALS EXAM (SIE) EXAM

  Thinking of taking the Securities Industry Essentials (SIE) exam? Then make sure that you study the characteristics of Private Placements and Private Offerings because you are likely to see questions about these topics on the SIE exam. How do I know this? FINRA list these topics In its Content Outline for the SIE Exam in Section 1.4, entitled Offerings. Bob Eder in his SIE guide,  Study for the Securities Industry Essentials (SIE) Exam , discusses Private Placements and Offerings in detail. Here is a sample of Bob Eder's discussion: Rule 506 Under Rule 506 of Reg. D, there is no dollar limit on the size of the private offering. Moreover, there may not be more than 35 investors. In addition, Reg. D allows an unlimited number of accredited investors, generally those with sizeable assets or income. In a Rule 506 offering, all purchasers, accredited or non-accredited, must be knowledgeable and sophisticated investors, meaning that they are both familiar with investing and that...

The SIE Exam tests candidates on privacy rules that registered reps must observe for maintaining the confidentiality of financial information and financial status of customers. How do we know this? FINRA publishes a Content Outline for the SIE exam, and Section 3.2.4 of the Content Outline lists the privacy requirements and Regulation S-P as important for the exam. Bob Eder in his SIE guide, Study for the Securities Industry Essentials (SIE) Exam , discusses privacy requirements in detail. Here is a sample of Bob Eder's discussion: Regulation S-P The SEC has adopted Regulation S-P to assure that broker/dealers and investment advisory firms, as well as other firms that collect sensitive financial information of customers, comply with the law on safeguarding the privacy of personal non-public financial information. The notice must be easy to understand, conspicuous, not camouflaged in small type or font. It must be sent to all persons with whom a financial firm initiates or mainta...

FINRA publishes a Content Outline for the Securities Industry Essentials (SIE) Exam. Under Section 3.2.5, FINRA's Content Outline lists "Communications with the Public."  The primary FINRA rule governing communications with the public is FINRA Rule 2210. Before you sit for the SIE Exam, make sure that you are familiar with the main provisions of Rule 2210. Bob Eder has a full treatment of Rule 2210  Communications with the Public  in his  Study for the  Securities Industry Essentials (SIE)   Exam . Here is an example of Bob Eder's treatment: "Correspondence (3.2.5) "FINRA defines "correspondence" as any written or electronic communication that a brokerage firm or representative sends, distributes, or makes available to 25 or fewer retail investors, within any 30-calendar-day period. If a representative sends material to more than 25 retail customers within any 30-day period, then it would be "retail communications." However, FINRA does no...

FINRA requires that every brokerage firm put into writing its policies on Anti-Money Laundering (AML). FINRA's Content Outline for the Securities Industry Essentials Exam lists the AML Compliance Program in Section 3.2.3, thus warning SIE Exam candidates that they should expect questions on the exam. Bob Eder in his book Study for the Securities Industry Essentials (SIE) Exam discusses these rules designed to prevent money laundering in detail. Here is an example from Bob Eder's book: Written Procedures                                                    (3.2.3) A brokerage firm must put in writing its safeguards against money laundering. FINRA Rule 3310 requires that every firm registered with FINRA put in writing its compliance policies and procedures re...

Are you planning to sit for the Securities Industry Essentials (SIE) Exam? Make sure that you are familiar with the definition of Money Laundering and its three stages. FINRA publishes a Content Outline for the SIE exam, and it includes Anti-Money Laundering in Section 3.2.3. The Content Outline specifically mentions the three stages of Money Laundering - Structuring, Layering, and Placement. Bob Eder covers  Money Laundering  in detail in his SIE study guide, Study for the Securities Industry Essentials Exam . Here is a sample of Bob Eder's discussion: "Three Stages of Money Laundering                         (3.2.3) "Criminal justice authorities have identified three stages of money laundering: placement, layering, integrating. "Placement In this initial stage, criminals try to insert monies from criminal activities into the financial system. For example, smuggl...

Taking the Securities Industry Essentials Exam soon? Then be prepared for questions on Types of Orders, such as market orders, limit orders and stop orders. FINRA publishes an SIE Test Content Outline, and in Section 3.1.1 lists Types of Orders. Bob Eder presents a full treatment of Types of Orders  in his Study for the Securities Industry Essentials (SIE) Exam . Here is a brief sample of Bob Eder's discussion: "Stop Orders (3.1.1) "A stop order is really a market order that waits, or depends, on some other trade execution in the same stock to first happen before the stop order can be executed. "Stop Orders Have Triggers "A stop order is "activated," "triggered," or "elected" once the indicated stop price is reached or breached by some other trade. Once a trade touches the stop price or there has been a "trade-through" (i.e., a trade below the stop price on a sell stop order, or a trade above the stop price on a buy ...

Plan on taking the SIE Exam soon? Make sure that you understand the various risks associated with investments. FINRA publishes a Content Outline for the SIE Exam which lists the various investment risks in Section 2.2. Consider currency risk. This is a risk that U.S. investors take when they purchase securities of foreign companies that are denominated in currencies other than the U.S. dollar. Here's an example. Mr. Roberts purchases 100 shares of France Telecom for 75 euros per share, when the euro is at a parity with the U.S. dollar. Mr. Roberts pays US $75 per share. Mr. Roberts holds the shares for six months and France Telecom still is selling for 75 euros. In the meantime, however, the euro declines in value vis-a-vis the U.S. dollar. The result is, Mr. Roberts' investment in France Telecom is worth less than what he paid in terms of U.S. dollars. Bob Eder has devoted a whole chapter in his Study for the Securities Industry Essentials (SIE) Exam to Risks of Investing. He...