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Capital Markets

Securities and Exchange Commission (SEC) Created under the Securities Exchange Act of 1934
Securities and Exchange Commission (SEC) securities industry's primary regulatory body
Securities and Exchange Commission (SEC) Broker-dealers that transact securities business with customer or with other broker-dealers must apply and be approved for registration with the SEC
Securities and Exchange Commission (SEC) regulates all exchanges and trading markets
Censure A broker-dealer that does not comply with SEC rules and regulations when conducting business is subject to
limits on activities, functions, or operations A broker-dealer that does not comply with SEC rules and regulations when conducting business is subject to
suspension of its registration (or one of its associated person's license to do business) A broker-dealer that does not comply with SEC rules and regulations when conducting business is subject to
revocation of registration A broker-dealer that does not comply with SEC rules and regulations when conducting business is subject to
fine A broker-dealer that does not comply with SEC rules and regulations when conducting business is subject to
Self-Regulatory Organizations (SROs) function under the SEC's oversight
Self-Regulatory Organizations (SROs) 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) regulates all matters related to investment banking (securities underwriting), trading in the OTC market, trading in NYSE-listed securities and the conduct of FINRA member firms and associated persons.
Financial Industry Regulatory Authority (FINRA) promote the investment banking and securities business, standardize principles and practices, promote high standard of commercial honor, and encourage the observance of federal and state securities laws
Financial Industry Regulatory Authority (FINRA) provide a medium for communication among its members and between its members, the government, and other agencies
Financial Industry Regulatory Authority (FINRA) adopt, administer, and enforce rules designed to prevent fraudulent and manipulative practices as well as to promote just and equitable principles of trade
Financial Industry Regulatory Authority (FINRA) promote self-discipline among members and investigate and resolve grievances between the public and members and between members
Chicago Board Options Exchange (CBOE) regulates all matters related to trading standardized options and related contracts listed on that exchange
Municipal Securities Rulemaking Board (MSRB) regulates all matters related to the underwriting and trading of state and municipal securities, but does not have enforcement powers - depends on other SROs (e.g. FINRA) for the enforcement of its rules.
Department of the Treasury (USDT) executive department and the treasury of the United States federal government. administered by the Secretary of the Treasury, who is a member of the Cabinet.
Internal Revenue Service (IRS) bureau of the Department of the Treasury responsible collection of taxes and enforcement of tax laws
North American Securities Administrators Association (NASAA) voluntary association where members provide insight from their unique perspective to the SEC and SROs as they move forward in their rulemaking process;
North American Securities Administrators Association (NASAA) actively advocates pro-investor policies, provides investor education, and offer resources for the regulatory community and securities industry professionals
Federal Reserve Board (FRB) consists of 12 regional Federal Reserve Banks and hundreds of national and state banks
Federal Reserve Board (FRB) determines monetary policy and takes actions to implement its policies
Federal Reserve Board (FRB) acting as an agent of the U.S. Treasury
Federal Reserve Board (FRB) regulating the U.S. money supply
Federal Reserve Board (FRB)
Federal Reserve Board (FRB) supervising the printing of currency
Federal Reserve Board (FRB) clearing fund transfers throughout the system
Federal Reserve Board (FRB) examining members to ensure compliance with federal regulations
Federal Reserve Board (FRB) its decisions are critical to the US economy because its actions determine how much money is available for businesses and consumers to spend
Securities Investor Protection Act Corporation (SIPC) created under the Securities Investor Protection Act of 1970
Securities Investor Protection Act Corporation (SIPC) nonpofit membership organization - assessments paid by members for a general insurance fund that is used to meet customer claims in the event of a broker-dealer bankruptcy
Securities Investor Protection Act Corporation (SIPC) - banks that deal exclusively in municipal securities - firms that deal exclusively in U.S. government securities - firms that deal exclusively in redeemable investment company securities excluded from SIPC required membership
SIPC Coverage $500,000 per separate customer, including $250,000 cash, only the equity in margin accounts is covered, not the full market value
Federal Deposit Insurance Corporation (FDIC) created during the Great Depression of the 1930s in response to bank failures, independent agency of the US federal government that preserves public confidence in the banking system by insuring deposits, premiums are paid by all participating institutions
Investors someone who provides money or resources for an enterprise, such as a corporation, with the expectation of financial or other gain
Retail investor an individual who makes investments such as he purchase of securities for his or her own personal account rather than for an organization
Institutional Investor an entity that pools money to purchase securities and other investment assets - banks, insurance companies, pensions, hedge funds, mutula funds
Accredited Investor -has a net worth of $1 million or more, not including net equity in a primary residence
Accredited Investor -has had an annual income of $200,000 / $300,000 with a spouse in 2 previous years and has a reasonable expectation to reach the same in the current year
Accredited Investor officers and directors of an issuer of securities are also considered accredited
Broker-Dealers (BD) each member firm BD operates under an individualized membership agreement with FINRA or other SRO. The agreement explains what lines of business the BD undertakes
Broker-Dealers (BD) some are full service; offering all types of products - stocks, bonds, mutual funds, options and many others. some limit to only a few.
Broker-Dealers (BD) some can incorporate proprietary trading, trade in the account of the BD known as market making. some who only make markets choosing not to deal with or accommodate customer retail accounts
Carrying firm (clearing) carries customer accounts and accepts funds and securities from customers - typically rank among the larger BDs.
Carrying firm (clearing) have the capability to do trade executions, clear and settle transactions, take custody of customer funds and securities and handle back office tasks
Carrying firm (clearing) must segregate customer funds and securities held in their custody from the firm's capital and securities
Introducing firm (Fully Disclosed Firm) introduces the customer to a clearing firm, the clearing firm acts as the back office for the introducing firm - may receive customer checks but they must be made out to the clearing firm
Prime Brokers
Created by: Lordemrys