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Zorluk: ZorRegulatory Entities and Self-Regulatory Organizations (SROs)

An associated person of a FINRA member broker-dealer is involved in municipal securities underwriting and secondary market trading. Following a compliance audit that revealed potential fair-pricing violations of Municipal Securities Rulemaking Board (MSRB) standards, an enforcement action is initiated against the firm. Which entity has the statutory authority to conduct the formal examination of the broker-dealer and directly enforce compliance with MSRB rules?

  1. Financial Industry Regulatory Authority (FINRA)Cevap
  2. B
    Municipal Securities Rulemaking Board (MSRB)
  3. C
    Securities Investor Protection Corporation (SIPC)
  4. D
    Depository Trust & Clearing Corporation (DTCC)

Cevap

Financial Industry Regulatory Authority (FINRA)
While the Municipal Securities Rulemaking Board (MSRB) formulates rules governing the municipal securities industry, it has no authority to enforce its rules or inspect broker-dealers. FINRA, alongside the SEC and appropriate banking regulators, is empowered by statute to examine member broker-dealers and enforce MSRB rules.

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1
Identify the rulemaking body versus the enforcing regulatory body for municipal securities.
The Municipal Securities Rulemaking Board (MSRB) creates regulations governing municipal securities activities, but by statute it has no inspection or enforcement powers.
Congress established a strict separation between rulemaking and enforcement for municipal securities to avoid creating redundant regulatory inspection teams.
2
Determine which entity performs examinations and enforces MSRB rules for securities firms.
FINRA (for broker-dealers) and federal bank regulators (for bank dealers) are granted explicit authority to examine firms and enforce MSRB rules.
As an SRO supervising broker-dealers, FINRA conducts compliance exams and disciplinary proceedings for violations of both SEC rules and MSRB rules.

Anahtar Kavram

Division of authority between MSRB (rulemaking) and FINRA/SEC/bank regulators (enforcement and examination)
Tahmini Süre:1m 15s
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Konular

Regulatory Entities and Self-Regulatory Organizations (SROs)

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