Examkin

Question

Difficulty: MediumSelf-Regulatory Organizations (SROs) and FINRA

FINRA operates as a self-regulatory organization (SRO) with direct authority to establish municipal securities rules and regulate municipal bond issuers.

Answer: Answer

Answer

The statement is false. The Municipal Securities Rulemaking Board (MSRB) formulates rules for municipal securities, which FINRA enforces on member broker-dealers. Neither SRO has jurisdiction over municipal bond issuers.
The statement is false because the MSRB establishes municipal securities rules, which FINRA enforces for broker-dealers. Additionally, SROs do not regulate municipal issuers.

Step-by-Step Solution

1
Differentiate rulemaking authority for municipal securities.
The MSRB writes rules governing municipal market transactions, while FINRA enforces MSRB rules for broker-dealers.
SRO responsibilities are divided between rulemaking entities (MSRB) and primary enforcement entities (FINRA).
2
Determine SRO jurisdiction regarding municipal issuers.
Federal law restricts SROs from directly regulating municipal government entities that issue debt.
Municipal issuers are exempt from direct SRO rule mandates under federal statutory provisions.

Key Concept

SRO Jurisdiction and Division of Authority Between FINRA and MSRB
Estimated Time:1m 0s
Rate this question

Topics

Self-Regulatory Organizations (SROs) and FINRA

More questions from this topic