Sign in Subscribe

29 May 2025 1 min read

Table of Contents

Section 1: Knowledge of Capital Markets

1.1 Regulatory Entities, Agencies and Market Participants

1.1.1 The Securities and Exchange Commission (SEC)

1.1.2 Self-regulatory Organizations (SROs)

1.1.3 Other Regulators and Agencies.9

1.1.4 Market Participants and their Roles.12

1.2 Market Structure.21

1.2.1 Types of Markets.21

1.3 Economic Factors.25

1.3.1 The Federal Reserve Board’s Impact on Business Activity and Market Stability.25

1.3.2 Business Economic Factors.28

1.3.3 International Economic Factors.33

1.4 Offerings.36

Section 2: Understanding Products and Their Risks.46

2.1 Products.46

2.1.1 Equity Securities.46

2.1.2 Debt Instruments.54

2.1.3 Options.69

2.1.4 Packaged Products.82

2.1.5 Municipal Fund Securities.94

2.1.6 Direct Participation Programs (DPPs)103

2.1.7 Real Estate Investment Trusts (REITs)108

2.1.8 Hedge Funds.113

2.1.9 Exchange-traded Products (ETPs)117

2.2 Investment Risks.122

Section 3: Understanding Trading, Customer Accounts and Prohibited Activities.137

3.1 Trading, Settlement and Corporate Actions.137

3.1.1 Orders and Strategies.137

3.1.2 Investment Returns.142

3.1.3 Trade Settlement148

3.1.4 Corporate Actions.150

3.2 Customer Accounts and Compliance Considerations.155

3.2.1 Account Types and Characteristics.155

3.2.2 Customer Account Registrations.161

3.2.3 Anti-money Laundering (AML)167

3.2.4 Books and Records and Privacy Requirements.173

3.2.5 Communications with the Public and General Best Interest Obligations and Suitability Requirements.181

3.3 Prohibited Activities.185

3.3.1 Market Manipulation.185

3.3.2 Insider Trading.187

3.3.3 Other Prohibited Activities.190

Section 4: Overview of the Regulatory Framework.207

4.1 SRO Regulatory Requirements for Associated Persons.207

4.1.1 Registration and Continuing Education.207

4.2 Employee Conduct and Reportable Events.215

4.2.1 Employee Conduct215

4.2.2 Reportable Events.218