Regulators and Key Statutes
Core flashcards linking the SEC, FINRA, MSRB, SIPC, and state regulators to the foundational federal securities laws.
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Questions Covered in This Set
10 cards to master
Securities Act of 1933 — nickname and scope?
The "Paper Act" / "Truth in Securities" law; governs the PRIMARY market (new issues), requiring SEC registration and prospectus delivery.
Securities Exchange Act of 1934 — what did it do?
The "People Act": created the SEC, regulates the SECONDARY market, registers broker-dealers/exchanges/associated persons, mandates issuer reporting (10-K, 10-Q, 8-K), and contains antifraud Rule 10b-5.
What does the Investment Company Act of 1940 cover?
Classifies and regulates investment companies: face-amount certificate companies, unit investment trusts, and management companies (open- and closed-end funds); sets diversification, board, and $100,000/100-shareholder seed capital rules.
What does the Investment Advisers Act of 1940 require?
Registration of investment advisers (advice about securities, for compensation, as a business), fiduciary duty, Form ADV delivery, and advertising/custody rules.
What did the Maloney Act of 1938 accomplish?
Amended the '34 Act to allow SRO registration for the OTC market, creating the NASD (FINRA's ancestor).
What is FINRA and what does it do?
The largest SRO — a private, non-governmental membership organization formed in 2007 from NASD and NYSE member regulation; registers BDs and reps (Form BD, U4/U5), administers exams, writes conduct rules, runs arbitration, BrokerCheck, and TRACE.
Key limitation on the MSRB?
The MSRB writes rules for municipal dealers and advisors and runs EMMA, but has NO enforcement power — FINRA, the SEC, and bank regulators enforce its rules.
What is the Tower Amendment?
The SEC and MSRB cannot require municipal issuers to file documents before an offering.
What does SIPC protect, and how much?
Created by the Securities Investor Protection Act of 1970; protects customers if a broker-dealer FAILS (not market loss), up to $500,000 per separate customer (including up to $250,000 cash).
Does the SEC approve securities?
No — it only clears registration statements for effectiveness. Claiming SEC approval or endorsement of a security is a violation.
