Under the Securities Exchange Act, who must file reports of beneficial ownership (Forms 3, 4, 5)?

Insiders — officers, directors, and beneficial owners of more than 10% of a registered equity class. Form 4 (changes) is due within 2 business days of the transaction.

What is a Schedule 13D and its filing deadline?

Filed by anyone acquiring more than 5% beneficial ownership of a registered equity security; due within 5 business days (recent rule) of crossing the 5% threshold.

What does a firm-commitment underwriting mean?

The underwriters purchase the entire issue from the issuer and resell it to the public, assuming the full financial risk of any unsold shares.

What is a best-efforts underwriting?

The underwriter acts as agent and sells only what it can, with no obligation to buy unsold shares; the issuer bears the risk of unsold securities.

Distinguish 'all-or-none' (AON) from 'mini-max' best-efforts offerings.

AON: the entire issue must be sold or the offering is canceled and money returned. Mini-max: a minimum must be sold before any closing, up to a maximum amount.

In a syndicate, what is the difference between a Western (divided) and an Eastern (undivided) account?

Western: each member is liable only for its own allotment. Eastern: each member is liable for its proportionate share of any unsold securities regardless of its own sales.

What is the underwriting spread, and how is it divided?

The spread is the difference between the public offering price and the proceeds to the issuer. It is divided into the manager's fee, the underwriting (syndicate) fee, and the selling concession.

What is a syndicate (selling group) member's selling concession?

The portion of the spread paid to the firm that actually sells the security to the public — it is the largest component of the spread.

What does Rule 5130 (the 'new issue' rule) prohibit?

Prohibits FINRA member firms from selling shares of an equity IPO (a 'new issue') to restricted persons, such as member firms, their associated persons, and certain immediate family members.

Under the FINRA new-issue rules, who is generally a 'restricted person'?

Broker-dealers, their associated persons, finders and fiduciaries to the offering, portfolio managers, and immediate family of associated persons — they may not buy at the IPO public offering price.

🇺🇸 FINRA Series 7 / SIE Exams · flashcards

FINRA Series 7 / SIE Exams Series 7: Securities Regulation, Underwriting, and Professional Conduct Flashcards

50 question-and-answer cards covering Series 7: Securities Regulation, Underwriting, and Professional Conduct as it is examined in FINRA Series 7 / SIE Exams. 24 of them are printed below, taken from across the deck — no signup, no paywall on the preview.

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24 sample cards from the Series 7: Securities Regulation, Underwriting, and Professional Conduct deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

Under the Securities Exchange Act, who must file reports of beneficial ownership (Forms 3, 4, 5)?
Insiders — officers, directors, and beneficial owners of more than 10% of a registered equity class. Form 4 (changes) is due within 2 business days of the transaction.
What is a Schedule 13D and its filing deadline?
Filed by anyone acquiring more than 5% beneficial ownership of a registered equity security; due within 5 business days (recent rule) of crossing the 5% threshold.
What does a firm-commitment underwriting mean?
The underwriters purchase the entire issue from the issuer and resell it to the public, assuming the full financial risk of any unsold shares.
What is a best-efforts underwriting?
The underwriter acts as agent and sells only what it can, with no obligation to buy unsold shares; the issuer bears the risk of unsold securities.
Distinguish 'all-or-none' (AON) from 'mini-max' best-efforts offerings.
AON: the entire issue must be sold or the offering is canceled and money returned. Mini-max: a minimum must be sold before any closing, up to a maximum amount.
In a syndicate, what is the difference between a Western (divided) and an Eastern (undivided) account?
Western: each member is liable only for its own allotment. Eastern: each member is liable for its proportionate share of any unsold securities regardless of its own sales.
What is the underwriting spread, and how is it divided?
The spread is the difference between the public offering price and the proceeds to the issuer. It is divided into the manager's fee, the underwriting (syndicate) fee, and the selling concession.
What is a syndicate (selling group) member's selling concession?
The portion of the spread paid to the firm that actually sells the security to the public — it is the largest component of the spread.
What does Rule 5130 (the 'new issue' rule) prohibit?
Prohibits FINRA member firms from selling shares of an equity IPO (a 'new issue') to restricted persons, such as member firms, their associated persons, and certain immediate family members.
Under the FINRA new-issue rules, who is generally a 'restricted person'?
Broker-dealers, their associated persons, finders and fiduciaries to the offering, portfolio managers, and immediate family of associated persons — they may not buy at the IPO public offering price.
What is the MSRB and who does it regulate vs. not regulate?
The Municipal Securities Rulemaking Board writes rules for municipal securities dealers and brokers. It has NO enforcement authority and does NOT regulate issuers (issuers are exempt).
What is a competitive bid vs. a negotiated municipal underwriting?
Competitive bid: the issuer awards the issue to the syndicate submitting the lowest interest cost (typically GO bonds). Negotiated: the issuer selects an underwriter and negotiates terms directly (typically revenue bonds).
In a competitive municipal bid, what are NIC and TIC?
Net Interest Cost (NIC) is total interest minus premium (or plus discount), ignoring time value of money. True Interest Cost (TIC) accounts for the time value of money (present value); the winning bid is the lowest cost basis specified.
What is the Bond Buyer's 'Official Notice of Sale'?
The notice published by a municipal issuer soliciting competitive bids from underwriters; it states the terms, dates, bidding restrictions, and basis of award (NIC or TIC).
What is a municipal Official Statement?
The disclosure document for a municipal offering, analogous to a prospectus, providing financial and legal information about the issuer and the bond issue; munis are exempt so it is not technically required by the Act of 1933 but is provided under MSRB rules.
Under MSRB Rule G-37, what is the political contribution limit before triggering a ban?
An MFP (municipal finance professional) may contribute up to $250 per election to an official for whom they can vote; exceeding it triggers a 2-year ban on negotiated municipal business with that issuer.
What is a bona fide quote vs. a nominal (subject) quote in municipals?
A bona fide quote is a firm price at which the dealer is ready to trade. A nominal quote is given for informational purposes only and is not a firm offer to trade.
Under FINRA Rule 2210, what are the three categories of communications with the public?
Retail communications (to more than 25 retail investors in 30 days), Correspondence (to 25 or fewer retail investors in 30 days), and Institutional communications (to institutional investors only).
What is the principal-approval requirement for retail communications under Rule 2210?
Retail communications generally require principal approval before first use. Correspondence and institutional communications require supervision/review but not necessarily prior principal approval of each piece.
When must certain retail communications be filed with FINRA's Advertising Regulation Department?
Generally within 10 business days of first use (or 10 days before first use for new member firms in their first year, and pre-filing for certain products like registered investment company communications with rankings).
What are the markup/markdown disclosure requirements under FINRA's 5% policy?
The 5% policy is a guideline (not a rule) for fair markups, markups, and commissions. It is not a fixed ceiling — fairness depends on factors like security type, price, availability, and amount of money involved.
How is a markup calculated and on what price is it based?
Markup = (price to customer − prevailing market price) ÷ prevailing market price. For a dealer (principal) transaction it is based on the current inter-dealer market price, not the dealer's own cost.
What is the FINRA Code of Procedure used for?
It handles disciplinary actions for rule violations by members and associated persons; complaints are brought by FINRA's Department of Enforcement and heard by a Hearing Panel (alleged violations of rules).
What is the FINRA Code of Arbitration and is its decision binding?
It resolves monetary disputes (member vs. member, member vs. associated person, and customer vs. member when agreed). Arbitration decisions are final and binding with no right of appeal. The eligibility/time limit for filing a claim is generally 6 years from the event.

What this deck covers

The Series 7: Securities Regulation, Underwriting, and Professional Conduct deck follows the FINRA Series 7 / SIE Exams Series 7: Securities Regulation, Underwriting, and Professional Conduct syllabus — 3 chapters and 9 topics — so questions land on material that is genuinely examinable rather than trivia around it. That works out to roughly 16.7 cards per chapter.

Answers are written to be recallable, not just readable — averaging about 192 characters, which is long enough to carry the reasoning and short enough to say out loud.

A deck like this earns its keep on the second and third pass. Read the syllabus first so you know the shape of the subject, then use the cards to find the specific facts that have not stuck.

Series 7: Securities Regulation, Underwriting, and Professional Conduct flashcards FAQ

How many Series 7: Securities Regulation, Underwriting, and Professional Conduct flashcards are in this FINRA Series 7 / SIE Exams deck?

50 cards. This page previews 24 of them, sampled evenly across the deck so you can judge the difficulty before installing anything.

Are these FINRA Series 7 / SIE Exams flashcards free?

Yes. The preview here is free to read with no signup, and the full 50-card deck is free inside the Examius app.

What do the Series 7: Securities Regulation, Underwriting, and Professional Conduct cards cover?

They follow the FINRA Series 7 / SIE Exams Series 7: Securities Regulation, Underwriting, and Professional Conduct syllabus — 3 chapters and 9 topics — so the questions track what is actually examinable.

How should I use these flashcards?

Read the syllabus first so you know the shape of the subject, then drill the deck. Examius schedules each card with spaced repetition, so cards you keep missing come back sooner and ones you know drift further apart.