SIE Regulatory Framework
Updated October 27, 2026
Overview of the Regulatory Framework is the smallest part of the SIE, 9% of the exam, but its questions are mostly straightforward facts. Learn who regulates what and the main laws, and you can pick up easy points. Free practice questions follow.
Who regulates
| Regulator | Role |
|---|---|
| SEC (Securities and Exchange Commission) | Federal agency that enforces the securities laws |
| FINRA | Self-regulatory organization (SRO) for broker-dealers and their representatives; writes rules, examines firms and gives qualification exams such as the SIE |
| MSRB (Municipal Securities Rulemaking Board) | Writes rules for the municipal securities market; it doesn’t enforce them itself |
| Federal Reserve | Sets margin credit rules such as Regulation T |
Key laws
| Law | Covers |
|---|---|
| Securities Act of 1933 | New issues (the primary market): registration and the prospectus |
| Securities Exchange Act of 1934 | Trading in the secondary market; created the SEC |
| Investment Company Act of 1940 | Mutual funds and other investment companies |
| Investment Advisers Act of 1940 | Investment advisers |
Registration forms
- Form U4: used to register a representative with a firm, and kept updated.
- Form U5: filed by the firm when a representative leaves.
Passing the SIE
A passing SIE result is valid for four years. To register as a representative, you also need to pass a qualification exam such as the Series 6 or 7, which requires sponsorship by a FINRA member firm.
Free SIE regulatory practice questions
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Which law covers new issues of securities, including registration and the prospectus?Answer: BThe Securities Act of 1933 governs new issues in the primary market, including registration and the prospectus.
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Which law created the SEC?Answer: CThe Securities Exchange Act of 1934 created the SEC and regulates trading in the secondary market.
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Which organization writes rules for the municipal securities market but doesn't enforce them?Answer: DThe MSRB writes municipal securities rules; enforcement is handled by others, such as FINRA and the SEC.
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Which form does a firm file when a registered representative leaves the firm?Answer: AForm U5 is filed when a representative's association with a firm ends. Form U4 is used to register a representative.
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How long is a passing SIE result valid?Answer: BA passing SIE result is valid for four years.
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FINRA is best described as:Answer: CFINRA is a self-regulatory organization (SRO) that writes rules for and oversees broker-dealers and their registered representatives, under SEC oversight.
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Which law regulates mutual funds and other investment companies?Answer: DThe Investment Company Act of 1940 regulates investment companies such as mutual funds. The Investment Advisers Act of 1940 regulates investment advisers.
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Which law requires a trustee and an indenture for most public corporate bond issues?Answer: AThe Trust Indenture Act of 1939 requires public corporate bond issues above a certain size to have a formal indenture and an independent trustee to protect bondholders.
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Which form does a firm file to register a new registered representative with FINRA?Answer: BForm U4 registers a representative and discloses their background. Form U5 is filed when they leave the firm.
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How often must registered representatives complete FINRA's Regulatory Element continuing education?Answer: CSince 2023, FINRA requires the Regulatory Element of continuing education every year, along with the firm's Firm Element training.
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Before taking part in a business activity outside their firm, a registered representative must generally:Answer: DFINRA's outside business activities rule requires prior written notice to the firm. Private securities transactions ("selling away") have stricter rules, including the firm's written approval when the representative is paid.
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How are most disputes between customers and FINRA member firms resolved?Answer: AMost customer account agreements require disputes to go to FINRA arbitration, which is binding and has very limited grounds for appeal.
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Which organization is the primary federal regulator of the securities markets?Answer: BThe Securities and Exchange Commission, created by the Securities Exchange Act of 1934, is the primary federal securities regulator. FINRA is a self-regulatory organization overseen by the SEC.
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A person with a statutory disqualification, such as certain felony convictions within the past 10 years, is generally:Answer: CStatutory disqualification generally bars association with a FINRA member firm unless FINRA approves an eligibility application. Certain felonies within 10 years are among the disqualifying events.
Pass the SIE exam on your first try
- All 228 questions across capital markets, products and risks, trading and accounts, and regulation
- An explanation for every answer, with the law or rule behind it
- Unlimited full 75-question practice exams, with each part in its real share