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SIE — Trading, Accounts & Regulation flashcards

10 of 65 cards free to study here · 9 topics · the whole deck is built into Willys

Order types, short sales, T+1 settlement, account registrations, KYC and AML, the SEC, FINRA and MSRB, registration, prohibited practices, communications, Reg BI, SIPC and privacy.

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Learn deck · part of FINRA SIE and Series 7 · written against: FINRA content outlines; T+1 settlement (May 2024); SECURE 2.0 RMD ages. Updated 2026-10-10.

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  1. A customer wants out of a stock right now, whatever the price. Which order type fits, and what does it guarantee?
    A market order — it executes immediately at the best available price, guaranteeing execution but not price.
    Orders and Trading
  2. XYZ trades at 42. A customer enters a buy limit at 40. When and at what price can the order fill?
    Only if XYZ falls to 40 or lower; a buy limit fills at the limit price or better.

    Watch out: a limit order guarantees price, not execution — the stock may never reach 40.
    Orders and Trading
  3. When does a regular-way trade of common stock or a corporate bond settle?
    T+1 — one business day after the trade date, the standard since May 2024.
    Settlement
  4. A customer wants to borrow from the firm to buy securities and also sell short. Which account is required, and what must she sign?
    A margin account, opened with a signed margin agreement (credit and hypothecation agreements).

    Watch out: in a cash account the customer must pay for purchases in full and cannot sell short.
    Customer Accounts
  5. Under the Customer Identification Program, what four items must a firm collect from an individual opening an account?
    Name, date of birth, residential or business street address, and an identification number (such as an SSN for a U.S. person).

    Watch out: a P.O. box is not acceptable as the street address.
    KYC and AML
  6. Which federal law governs the registration and disclosure of new securities offerings?
    The Securities Act of 1933 — it requires registration with the SEC and delivery of a prospectus for non-exempt new issues.
    Regulators and Laws
  7. Which form does a member firm file to register a new representative with FINRA?
    Form U4 — it covers personal and employment history and disclosure questions such as criminal charges, regulatory actions and customer complaints.
    Registration
  8. A rep trades a customer's account heavily to generate commissions, with little regard for the customer's objectives. What is this called?
    Churning — excessive trading for the rep's benefit. It is a violation regardless of whether individual trades were profitable.
    Prohibited Activities
  9. A firm emails the same market commentary to 40 retail investors this week. Which communication category is it, and does it need pre-approval?
    A retail communication — distributed to more than 25 retail investors within 30 days — and it generally needs principal approval before use.
    Communications
  10. When does Regulation Best Interest apply to a broker-dealer?
    When it makes a recommendation of a securities transaction or strategy to a retail customer — it must act in that customer's best interest without putting its own interest first.
    Customer Protection

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About these cards

Review status: Second-reader reviewed, with corrections applied.

Checked against:

  • Checked against the FINRA Securities Industry Essentials (SIE) Examination Content Outline (© 2025 FINRA; topic list only; no text copied).
  • Checked against FINRA rule summaries (Rules 2210, 3260, 4512, 2165, 1240) and SEC releases on T+1 settlement, Regulation Best Interest, Regulation SHO and Regulation S-P (reference only).
  • Checked against FinCEN guidance on CTR, SAR and structuring, and SIPC's published coverage explanations (reference only).

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