Securities Act of 1933
-Governs the new issuance (primary) market, which involves the money-raising activities of issuers
-requires sellers (issuers) to register their securities when selling to the public
-ensures more transparency in financial statements so investors could ma
Securities Exchange Act of 1934
-Governs trading markets for existing securities and registration requirements of BDs, BD employees, and exchanges
-Ensuring greater financial transparency and accuracy and less fraud or manipulation
Investment Advisers Act of 1940
Governs the regulations of firms that earn fees for providing investment advice
Investment Company Act of 1940
Governs the regulation of packaged products such as mutual funds, closed-end funds, and unit investment trusts
Securities Investor Protection Act of 1970
Covers the protection thresholds for customers in the event of a BD bankruptcy
Insider Trading and Securities Fraud Enforcement Act of 1988
Defines penalties for the misuse of material, no public information, by both firms and individuals
The USA Patriot Act
Covers anti-money laundering policies and procedures that must be followed by financial firms
The Securities and Exchange Commission
Created under the Securities Exchange Act of 1934. It is the securities industry's primary regulatory body. BDs that transact securities business with customers or with other BDs must apply and be approved for registration with the SEC. Additionally, the
Broker-Dealer Registration and Compliance
Must comply with SEC rules and regulations when conducting business. A BD that does not comply is subject to:
-censure;
-limits on activities, functions, or operations;
-suspension of its registration;
-revocation if registration; or
-a fine
Self Regulatory Organization (SROs)
-Function under the SEC's oversight. Each SRO is accountable to the commission for enforcing federal securities laws, as well as supervising securities practices within an assigned jurisdiction
Financial Industry Regulatory Authority (FINRA)
-Type of SRO that regulates all matters related to investment banking, trading over-the-counter market, trading in NYSE-listed securities, and the conduct of associated member firms and associated persons. Also regulates investment companies and limited p
Uniform Practice Code (UPC)
FINRA Code that rules over technical aspects of trading and payment for securities transactions
Code of Procedure (COP)
Covers enforcement of FINRA rules and details the punishment of members who incur rule violations. These decisions can be appealable by the National Adjudicatory Council
Code of Arbitration (COA)
FINRA-run dispute resolution process to settle monetary disputes. Goal of the COA is to provide faster and cheaper resolution versus going through traditional court system (courts are final and binding)
Chicago Board Options Exchange (CBOE)
Regulates all matters related to trading standardized options and related contracts listed on that exchange
The Municipals Securities Rule-making Board (MRSB)
Regulates all matters related to the underwriting and trading of state and municipal securities. MRSB regulates but does not have enforcement powers, it depends on other SRO's for the enforcement of its rules.
The U.S Treasury Department / IRS
-An executive department and the treasury of the U.S federal government
-Administered by the Secretary of Treasury; function is to oversee collection of taxes
-The collection of taxes and enforcement of tax laws is a function of the IRS, which is a bureau
The Federal Reserve Board (FRB)
-Consisting of 12 regional federal reserve banks and hundreds of national and state banks that belong to the system
-FRB determines monetary policy and take actions to implement its policies
-Determines how much money is available for businesses and consu
The Securities Investor Protection Corporation
-SIPC members pay assessments into a general insurance fund that is used to meet claims in the event of a BD bankruptcy
-Basic coverage under SIPC is no more than $500,000 per separate customer, not per account. Of that $500,000 the SIPC will only cover $
The Federal Deposit Insurance Corporation (FDIC)
-Created during the Great Depression of the 1930s in response to widespread bank failures and massive losses to bank customers.
-The FDIC provides deposit insurance of up to $250,000 for each deposit ownership category in each insured bank.