Keentune

Securities Regulation curriculum

9 chapters
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181 concepts
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free
Everything the adaptive question bank can teach and test in Securities Regulation, from foundations through advanced practice. Work through it in order, or start practising and let the questions find your level.
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A free 16-minute primer — the mental model, the mistakes beginners make, and what to practise first.
A. Trading & orders
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Certainty of execution vs certainty of price (computed fill family).
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Protection logic; stops become market orders; gap risk (computed).
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May never fill (computed).
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Buy-limit/sell-stop below market; sell-limit/buy-stop above.
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Borrow/locate (Reg SHO), unlimited risk, mandatory buy-in concept.
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Commission vs markup; acting as both on one trade = violation.
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Best execution; payment-for-order-flow disclosure basics.
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Day, good-til-cancelled, all-or-none, fill-or-kill, immediate-or-cancel, not-held — what each qualifier changes.
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What must be on an order ticket before entry, and why the time stamp is the audit trail.
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Confirmation content and delivery timing in concept; disclosing the capacity the firm acted in.
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When a markup must be disclosed, and why the 5% figure is a policy rather than a rule.
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Buying into inventory to fill a customer order, and the disclosure that transaction requires.
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How open buy-limit and sell-stop orders are reduced on an ex-dividend date (computed).
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Marking an order long, short, or short-exempt, and the locate that must precede it.
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Threshold securities and the mandatory close-out duty on a persistent fail.
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Which side reports an OTC trade and inside what window, in concept.
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Handling a trade error: the error account, the approval, and the records it leaves.
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The pattern-day-trader designation and the account requirements that attach in concept.
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Direct market access and algorithmic order flow, and how a firm supervises what it cannot see by hand.
B. Customer accounts
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Required new-account fields; CIP identity verification.
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What's required to OPEN vs to RECOMMEND.
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Margin agreement parts: hypothecation, credit, loan consent.
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Reg T 50% initial; 25%/30% maintenance; margin-call math (computed family).
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New issues (30 days), mutual funds, OTC penny stocks — what can't be margined.
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JTWROS vs tenants in common — the death-outcome grid.
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One custodian, one minor, irrevocable, minor's SSN, taxed to the minor.
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Written authorization BEFORE trading; the time/price exception.
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Deductibility vs tax-free qualified withdrawals; penalties and RMD concept (mechanics, never year-limits).
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401(k) match, rollover vs transfer, ERISA scope.
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Contributor limits, state-tax angle, K-12 provisions.
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Separate-customer coverage arithmetic (computed scenarios); excess SIPC.
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Individual, joint, corporate, partnership, trust and estate registrations, and what each needs to open.
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Who may give instructions versus who owns the assets; third-party trading authorization.
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Transfer-on-death registration and why a beneficiary designation overrides a will for that account.
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Revocable vs irrevocable trusts, and the document that establishes a trustee's authority.
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Letters testamentary, letters of administration, and court appointment as the authority to trade.
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Corporate resolutions and partnership agreements: who is authorized to trade and to margin.
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Prudent-investor duties and the legal-list concept in fiduciary accounts.
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Automated account transfers: validation, the timetable in concept, and non-transferable positions.
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What a customer must receive and how often, in concept, and who is responsible for sending it.
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Requests that raise supervisory flags, and the controls a firm puts around them.
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The margin risk disclosure and what a customer signs before the first margin trade.
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Market value, debit balance, equity, and buying power on a long account (computed family).
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Credit balance and equity in a short margin account, and how a rally erodes it (computed).
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Fed calls vs maintenance calls, and what the firm may do when neither is met.
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Defined-benefit vs defined-contribution plans; SEP and SIMPLE structures in concept.
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Required-distribution mechanics, the early-withdrawal penalty, and the recognized exceptions in concept.
C. Prohibited activities & AML
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Material nonpublic information; tipper/tippee liability; treble penalties.
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Pump-and-dump, wash trades, matched orders, marking the close.
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Trading ahead of a block or research.
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Excessive trading for commissions vs unauthorized trading.
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Private securities transactions vs outside business activities — notice vs approval.
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Guarantees, sharing in accounts (proportionate exception), borrowing from customers.
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Commingling and misuse of customer funds/securities; prompt transmittal.
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Trusted contact and temporary holds (FINRA 2165).
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Placement, layering, integration — match the scenario.
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CTRs ($10k+ cash) vs SARs (suspicious, don't tip off); structuring.
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OFAC sanctions screening; AML compliance-program requirements.
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Retail vs correspondence vs institutional; approval and retention basics.
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Untrue statements and omitted material facts — the core of the general antifraud rule.
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Recommending outside the customer's profile; reasonable-basis, customer-specific and quantitative suitability.
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Fund switching with no benefit to the customer, and fee-based accounts with almost no activity.
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Steering a customer into a costlier share class or a smaller purchase than a breakpoint would reward.
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A market maker failing to honor its own firm quote for the displayed size.
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Withholding hot-issue shares from the public and selling to restricted persons.
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Concealing true ownership by holding positions in someone else's name.
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Signing a customer's name — even with permission — and altering an executed document.
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What counts as a customer complaint and what the firm must do the moment one arrives.
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Identifying the natural persons who own or control a legal-entity customer.
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Money-laundering red flags and the duty to escalate rather than resolve them alone.
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Funds-transfer records and the information that must travel with a transmittal, in concept.
D. Employee conduct & registration
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Form U4 (register, disclose) vs U5 (terminate, 30 days); fingerprints.
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What triggers it: felonies (10-yr), securities misdemeanors.
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The gift limit vs business entertainment (value lives in the vertical guide's registry — TIME-SENSITIVE).
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Political contributions; MSRB G-37 two-year timeout concept.
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What unregistered persons may do (no solicitation or recommendations).
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Regulatory Element (annual) vs Firm Element; the MQP concept.
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Representative-level vs principal-level registrations, and what each category permits its holder to do.
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The SIE plus a representative qualification: why the exam was split in two and what each half tests.
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The associated-person definition, and the clerical/ministerial staff who fall outside it.
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What happens to a registration after termination, and when re-examination becomes necessary.
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Criminal, regulatory, civil-judicial, customer-complaint, and financial disclosure categories.
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Supervision plans for statutorily disqualified persons and for firms with a disciplinary history.
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Opening an account away from the firm: prior notice and duplicate confirmations.
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Employee trading limits and the specific conflicts each restriction is designed to remove.
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Compensated vs uncompensated private securities transactions, and the different approval each needs.
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The narrow permitted lending relationships with customers and the written approval required.
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Business communications on personal devices and messaging apps, and the recordkeeping duty that follows.
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Reporting protections in concept, and why a firm may not impede an employee from contacting a regulator.
E. The regulatory framework
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New issues, registration, prospectus — the "paper act".
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Created the SEC; secondary market and BD regulation — the "people act".
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The discriminating grid — a top SIE confusion.
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The 1940 Act fund trichotomy: face-amount, UIT, management company.
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Who must register; the ABC (advice-business-compensation) test.
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Trust Indenture Act 1939 and SIPA 1970 — what each covers.
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Suitability/KYC → Regulation Best Interest; Form CRS for retail recommendations.
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USA PATRIOT Act/BSA as the AML basis; Regulation S-P privacy notices and opt-out.
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What counts as a security; the investment-contract test and the instruments it sweeps in.
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Why government, municipal and bank securities sit outside '33 Act registration in the first place.
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Annual, quarterly and current reports as the '34 Act's ongoing disclosure engine.
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Solicitation, the proxy statement, and shareholder proposals in concept.
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Large-holder schedules and insider ownership forms — who files what, and when.
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Recapturing an insider's round-trip profit inside six months, regardless of intent.
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Liability for a defective registration statement or prospectus, and the due-diligence defense.
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Why the general antifraud rule reaches ANY purchase or sale, exempt security or not.
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Diversified vs non-diversified funds and the diversification test in concept.
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Executive certification and internal control; systemic-risk and whistleblower provisions in concept.
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Emerging growth companies, scaled disclosure, and testing the waters.
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The net-capital rule and the customer-protection rule: reserve formula and possession-or-control, in concept.
F. State securities law — the Uniform Securities Act
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What the Uniform Securities Act is, and why every state adopts a variant rather than the model itself.
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The state Administrator's powers: rulemaking, investigation, orders — and the limits on each.
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The state definition of "security" and the standard exclusions (insurance, fixed annuities, commodities).
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Who is a "person" under the Act, and when a firm becomes a broker-dealer in a given state.
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When an individual is an agent — and the clerical/administrative carve-out that keeps some staff out.
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The state investment adviser definition and its exclusions.
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Investment adviser representative: who must register, and in which state.
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Coordination, qualification, and notice filing at the state level, and which offering uses which.
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Limited contacts with a state that stop short of triggering registration.
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Dealings with institutions and with pre-existing clients as exempt activity.
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Federal covered, government, bank and nonprofit securities under state law.
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Isolated non-issuer, unsolicited, and private-placement transactions — exempt by HOW, not by WHAT.
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Consent to service of process, the application contents, and when a registration becomes effective.
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Surety bonds and minimum-net-worth requirements for state registrants (mechanics only, never a current figure).
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When a withdrawal takes effect, and the Administrator's continuing jurisdiction afterward.
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Subpoena power, sworn testimony, and cooperation across state lines.
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Summary orders, the notice that must follow, and the right to a hearing.
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Grounds for adverse licensing action and the "in the public interest" standard behind them.
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The buyer's rescission remedy: what must be returned, and the limitation period in concept.
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Willful violations and the state's criminal exposure, in concept.
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Model rules and statements of policy as the source of most state conduct standards.
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When an offer is "made in" a state: where it originated, where it was directed, and where it was accepted.
G. Investment adviser regulation
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Advice, business, and compensation — all three, or there is no adviser to register.
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Which advisers register with the SEC and which with the states, and the assets-under-management dividing line in concept.
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Banks, incidental professionals, publishers, and broker-dealers — why each is excluded.
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Private-fund, venture-capital, and intrastate exemptions in concept — exempt is not excluded.
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Part 1 regulatory data, Part 2A brochure, Part 2B supplement, and the relationship summary.
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Delivering the brochure before or at the time of entering an agreement, and updating it annually.
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Duty of care plus duty of loyalty, and how that differs from a suitability obligation.
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Full and fair disclosure of conflicts, and what makes a client's consent informed.
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Assignment consent, notice of a partnership change, and the ban on unilateral amendment.
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When a performance fee is permitted, and the qualified-client concept behind it.
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What constitutes custody, the qualified custodian, and the surprise examination in concept.
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Paying for client referrals: written agreement, disclosure, and the client's acknowledgement.
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Substantiation, required disclosure, and fair-and-balanced presentation in adviser marketing.
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The research-and-brokerage safe harbor, and the expenses that clearly fall outside it.
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Consent required before an adviser trades with a client or crosses two clients.
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Voting authority, written policies, and the client's right to see the voting record.
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Access persons, personal-trading reports, and pre-clearance in concept.
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Privacy notices, opt-out rights, and the duty to safeguard client information.
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Continuity and succession planning treated as part of the fiduciary obligation.
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A bundled advisory-plus-execution fee, and the separate wrap brochure it requires.
H. Communications, supervision & recordkeeping
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Retail communication, correspondence, and institutional communication — the audience-count test that sorts them.
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Which categories need principal approval before use, and which are filed with the regulator.
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Fair and balanced; no exaggerated, promissory, or one-sided claims.
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Showing past performance: required disclosure and the ban on projecting future results.
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What must be disclosed when a customer or a paid promoter speaks for the firm.
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Static posts as retail communication vs interactive posts — and the recordkeeping duty either way.
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Analyst independence, conflict disclosure, and quiet periods around an offering.
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Calling-hour windows, the national do-not-call registry, and the firm-specific list.
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Supplemental sales material that may only accompany or follow a prospectus.
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WSPs as the firm's own rulebook, and why they must track the business actually conducted.
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What a registered principal must review, and which reviews must happen before the fact.
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What makes an office an OSJ, and the inspection cycle that follows in concept.
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The annual compliance interview and the firm-element training plan behind it.
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Testing the supervisory system and certifying it annually — supervision that checks itself.
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Blotters, ledgers, order tickets, customer account records — the core record set and what each proves.
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Lifetime, six-year and three-year record categories, in concept.
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Non-rewriteable storage, indexing, and the audit trail requirement in concept.
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Safeguarding customer data and responding to an incident, in concept.
I. Enforcement, arbitration & investor recourse
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Complaint, hearing panel, appeal to the National Adjudicatory Council, then the SEC and the courts.
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Censure, fine, suspension, bar and restitution — and the one sanction an SRO cannot impose.
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Settling without a hearing, and the minor-rule-violation plan for small lapses.
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Which disputes must go to arbitration and which may still be litigated.
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Public and non-public arbitrators, and how the parties shape the panel.
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Binding awards, the narrow grounds to vacate one, and the payment timeline in concept.
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Voluntary, non-binding mediation running alongside the arbitration forum.
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The eligibility rule for filing a claim — and why it is not a statute of limitations.
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Reporting customer complaints and disciplinary events to the regulator, in concept.
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Injunctions, disgorgement, civil penalties, and officer-and-director bars.
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When a securities matter becomes a criminal prosecution, and who brings it.
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What a customer can recover, from whom — and the loss no forum ever restores.
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