Study session step 1 of 13

The **SEC** (Securities and Exchange Commission) is the primary federal regulator, established by the Securities Exchange Act of 1934. The SEC administers the '33 Act (registration of offerings), '34 Act (markets and intermediaries), Investment Company Act of 1940 (mutual funds), Investment Advisers Act of 1940 (RIAs), and the Sarbanes-Oxley and Dodd-Frank amendments.

**Self-Regulatory Organizations (SROs):**

• **FINRA** (Financial Industry Regulatory Authority) — SRO for broker-dealers, registered representatives, and OTC equities. Created in 2007 by consolidating NASD with NYSE member regulation. Administers the SIE and Series 6/7/63/65/66/etc.

• **MSRB** (Municipal Securities Rulemaking Board) — writes rules for municipal securities dealers and municipal advisors. MSRB rules are enforced by FINRA for broker-dealers and by the SEC/federal banking regulators for bank dealers. Key: MSRB Rule G-17 (fair dealing), G-19 (suitability), G-20 (gifts).

• **CBOE** — options exchange, Series 9/10 supervisory.

• **Exchanges** (NYSE, Nasdaq) — listing standards and market operations rules, subject to SEC approval under §19 of the '34 Act.

**State regulators** (Blue Sky laws): each state regulates securities offerings and investment advisers within its borders. NASAA (North American Securities Administrators Association) coordinates state policy. State registration requirements coexist with federal; NSMIA preempts state registration for covered securities (listed, Reg D Rule 506, mutual funds).