SIE Plan

SIE practice question: Knowledge of Capital Markets

Knowledge of Capital MarketsDifficulty 2/5

A broker-dealer fails and a retail customer cannot access the securities in their account. Which body is relevant?

  1. ASIPC, which protects customers of a failed broker-dealer up to its limits
  2. BFDIC, which protects customers of a failed broker-dealer up to its limits
  3. CThe SEC, which reimburses customers of a failed broker-dealer directly
  4. DFINRA, which reimburses customers of a failed broker-dealer from member fees
Show answer and rationale

Correct: A. SIPC exists for exactly this situation: a broker-dealer failure in which customer assets are missing. It protects against the firm failing, not against securities losing value.

  • B — The FDIC insures deposits at banks; it has no role when a broker-dealer fails.
  • C — The SEC regulates and enforces; it does not reimburse individual customers for losses.
  • D — FINRA is a self-regulatory organisation and does not compensate customers of failed firms.

Concept being tested

12 of the 75 scored items. Regulators and their jurisdiction, from the SEC to self-regulatory organisations, the Treasury and IRS, state regulators, the Federal Reserve, SIPC and FDIC; the market participants and what each one does; primary, secondary, third and fourth markets; monetary versus fiscal policy, the business cycle and economic indicators; and the mechanics of offerings. — 16% of the exam. Study guide for Knowledge of Capital Markets.

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Primary references

  1. Securities Industry Essentials (SIE) Examination Content Outline — Financial Industry Regulatory Authority (FINRA) · primary · retrieved 2026-09-22, verified 2026-09-22
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