A newly established broker-dealer is mapping out the jurisdiction of key industry regulators. Match each regulatory entity with the primary scope of authority or function that governs its oversight of capital market activities.
- Federal Reserve Board (FRB)Establishes credit extension standards for securities purchases, including Regulation T margin requirements for broker-dealers.
- Municipal Securities Rulemaking Board (MSRB)Creates rules for municipal securities dealers and municipal advisors, but relies on other regulatory bodies for rule enforcement.
- Financial Industry Regulatory Authority (FINRA)Acts as the primary non-governmental SRO directly responsible for licensing, examining, and disciplining member broker-dealers and registered representatives.
- Securities Investor Protection Corporation (SIPC)Restores customer funds and securities up to statutory limits if a registered broker-dealer experiences financial failure.
Cevap
The Federal Reserve Board (FRB) establishes margin requirements under Regulation T; the Municipal Securities Rulemaking Board (MSRB) creates rules for municipal securities without possessing direct enforcement authority; the Financial Industry Regulatory Authority (FINRA) functions as the primary SRO licensing and examining broker-dealers; and the Securities Investor Protection Corporation (SIPC) protects customer funds and securities during broker-dealer liquidation.
Each organization fulfills a distinct regulatory function: the FRB sets credit extension limits via Regulation T; the MSRB formulates municipal market rules without direct enforcement power; FINRA licenses and enforces compliance for member broker-dealers; and SIPC resolves customer claims during broker-dealer insolvency.
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Anahtar Kavram
Division of regulatory jurisdiction among federal agencies, SROs, and investor protection corporations