Updated 2026
SIE Regulations
(The Exhaustive Guide)
Every act, regulation, and rule you need to know — organized so you actually remember them. From Securities Acts to FINRA rules to Blue Sky Laws.
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SIE Priority Guide: Everything here is useful knowledge, but items tagged
Bonus Detail are lighter on the SIE.
Items tagged Series 63 or
Series 65/66
are primarily tested on those exams — great to know, but don't stress them for the SIE.
Major Federal Securities Acts
Section 1 of 6 · 5 regulations
Securities Act of 1933
"Paper Act" / "New Issues Act"
Requires
Registration Statement (S-1) filed with the SEC, plus a final prospectus delivered to every buyer
Key Principle
Full & fair disclosure — the SEC does not approve or disapprove of the security; it only ensures adequate disclosure
The IPO Timeline (3 Phases)
1. Pre-Filing (Pre-Registration)
No offers, no sales, no advertising allowed. The issuer is preparing the registration statement.
2. Cooling-Off Period (20 days minimum)
Begins when the registration statement is filed with the SEC. During this period:
• Solicitations of Interest are permitted (conversations with potential buyers)
• No sales, no money accepted — only indications of interest
• The Red Herring Prospectus (preliminary prospectus) can be distributed — it has all info except the final price and effective date, marked in red ink on the cover
• Tombstone Ads may be published — bare-bones announcements (name, type, price range, where to get a prospectus). These are not considered offers to sell
• SEC may issue a deficiency letter requiring amendments (resets the 20-day clock)
• SEC may issue a stop order halting the registration entirely
3. Post-Effective
The SEC has declared the registration statement effective. Now:
• Sales can begin — final prospectus must be delivered to buyers
• Prospectus delivery requirement: 25 days for IPOs, 40 days for non-listed/non-Nasdaq issues
• The final prospectus replaces the red herring — includes the final public offering price (POP) and effective date
No offers, no sales, no advertising allowed. The issuer is preparing the registration statement.
2. Cooling-Off Period (20 days minimum)
Begins when the registration statement is filed with the SEC. During this period:
• Solicitations of Interest are permitted (conversations with potential buyers)
• No sales, no money accepted — only indications of interest
• The Red Herring Prospectus (preliminary prospectus) can be distributed — it has all info except the final price and effective date, marked in red ink on the cover
• Tombstone Ads may be published — bare-bones announcements (name, type, price range, where to get a prospectus). These are not considered offers to sell
• SEC may issue a deficiency letter requiring amendments (resets the 20-day clock)
• SEC may issue a stop order halting the registration entirely
3. Post-Effective
The SEC has declared the registration statement effective. Now:
• Sales can begin — final prospectus must be delivered to buyers
• Prospectus delivery requirement: 25 days for IPOs, 40 days for non-listed/non-Nasdaq issues
• The final prospectus replaces the red herring — includes the final public offering price (POP) and effective date
Expert Tip — "Access Equals Delivery": Under current SEC rules, if the final prospectus is filed on the SEC's EDGAR system, it is considered delivered to investors — no physical or email delivery required. This is increasingly tested on modern exams.
Exempt Securities
These do not need to register under the '33 Act:
• U.S. Government & agency securities
• Municipal bonds
• Commercial paper (≤ 270 days maturity)
• Bank securities
• Insurance policies (regulated by states)
• U.S. Government & agency securities
• Municipal bonds
• Commercial paper (≤ 270 days maturity)
• Bank securities
• Insurance policies (regulated by states)
Exempt Transactions
The transaction is exempt, not the security itself:
• Reg D — Private placements (Rule 506)
• Reg A+ — Mini-IPO (up to $75M)
• Reg S — Offshore sales
• Rule 147 / 147A — Intrastate offerings
• Reg CF — Crowdfunding (up to $5M)
• Reg D — Private placements (Rule 506)
• Reg A+ — Mini-IPO (up to $75M)
• Reg S — Offshore sales
• Rule 147 / 147A — Intrastate offerings
• Reg CF — Crowdfunding (up to $5M)
Common Exam Trap
The SEC never "approves" a security. Saying "SEC-approved" in any communication is a violation. The SEC only ensures disclosure requirements are met. Also: exempt securities are always exempt, but exempt transactions only exempt that specific sale — the security itself may still need registration for other transactions.
'33 = NEW — The 1933 Act is about new issues entering the market for the first time
Securities Exchange Act of 1934
"People Act" / "Exchange Act"
Created
The SEC (Securities and Exchange Commission) — enforces both the '33 and '34 Acts
Regulates
Broker-dealers, exchanges, transfer agents, clearing agencies, SROs (FINRA, exchanges), and all secondary market trading
Ongoing Reporting Requirements
Public companies with 2,000+ shareholders or $10M+ in assets must file:
• 10-K — Annual report (audited financials)
• 10-Q — Quarterly report (unaudited)
• 8-K — Current report for material events (mergers, bankruptcy, CEO change, etc.)
• Annual Report — Sent to shareholders before annual meeting
• Proxy Statements — Required when soliciting shareholder votes
• 10-K — Annual report (audited financials)
• 10-Q — Quarterly report (unaudited)
• 8-K — Current report for material events (mergers, bankruptcy, CEO change, etc.)
• Annual Report — Sent to shareholders before annual meeting
• Proxy Statements — Required when soliciting shareholder votes
Insider Reporting & Ownership Rules
Who is an "insider"? Officers, directors, and anyone owning 10%+ of a class of equity securities
• Section 13(d) — Must file a Schedule 13D within 10 days of acquiring 5%+ of a company's stock
• Section 16(a) — Insiders must report changes in ownership (Form 4) within 2 business days
• Section 16(b) — Short-Swing Profit Rule: Any profit from buying and selling (or selling and buying) within 6 months must be returned to the company. This is a strict liability rule — intent doesn't matter. The 6-month window is measured from trade date to trade date.
• Section 13(d) — Must file a Schedule 13D within 10 days of acquiring 5%+ of a company's stock
• Section 16(a) — Insiders must report changes in ownership (Form 4) within 2 business days
• Section 16(b) — Short-Swing Profit Rule: Any profit from buying and selling (or selling and buying) within 6 months must be returned to the company. This is a strict liability rule — intent doesn't matter. The 6-month window is measured from trade date to trade date.
Prohibited Activities (High-Yield SIE Topics)
Section 10b & Rule 10b-5 (Anti-Fraud)
The broadest anti-fraud provision in securities law. Prohibits any manipulative or deceptive device in connection with the purchase or sale of any security. Applies to everyone — not just insiders.
Insider Trading
Trading on material, non-public information (MNPI). Includes:
• Tippers — the person who shares MNPI (liable even if they don't trade)
• Tippees — the person who receives and trades on MNPI (liable if they knew or should have known it was insider info)
• Misappropriation Theory — even outsiders (lawyers, accountants, printers) who steal MNPI and trade on it are guilty
• Penalties: Up to $5M fine and/or 20 years prison for individuals
Market Manipulation
• Churning — Excessive trading in a customer's account to generate commissions
• Front-Running — A broker trades ahead of a large customer order to profit from the expected price move
• Painting the Tape — Traders collude to buy/sell among themselves to create the illusion of active trading
• Matched Orders / Wash Trading — Simultaneously placing buy and sell orders in the same security to fake volume
• Marking the Close — Trading at the end of the day to manipulate closing prices
• Pump and Dump — Hyping a stock (usually micro-cap) to inflate the price, then selling
• Spoofing — Placing large orders with the intent to cancel before execution, designed to move the price artificially. A major enforcement focus in recent years.
The broadest anti-fraud provision in securities law. Prohibits any manipulative or deceptive device in connection with the purchase or sale of any security. Applies to everyone — not just insiders.
Insider Trading
Trading on material, non-public information (MNPI). Includes:
• Tippers — the person who shares MNPI (liable even if they don't trade)
• Tippees — the person who receives and trades on MNPI (liable if they knew or should have known it was insider info)
• Misappropriation Theory — even outsiders (lawyers, accountants, printers) who steal MNPI and trade on it are guilty
• Penalties: Up to $5M fine and/or 20 years prison for individuals
Market Manipulation
• Churning — Excessive trading in a customer's account to generate commissions
• Front-Running — A broker trades ahead of a large customer order to profit from the expected price move
• Painting the Tape — Traders collude to buy/sell among themselves to create the illusion of active trading
• Matched Orders / Wash Trading — Simultaneously placing buy and sell orders in the same security to fake volume
• Marking the Close — Trading at the end of the day to manipulate closing prices
• Pump and Dump — Hyping a stock (usually micro-cap) to inflate the price, then selling
• Spoofing — Placing large orders with the intent to cancel before execution, designed to move the price artificially. A major enforcement focus in recent years.
Proxy Rules
• Shareholders must receive proxy materials before voting
• A proxy is a written authorization to vote on behalf of a shareholder
• Proxies are solicited by management but can also be contested (proxy fight)
• A proxy is a written authorization to vote on behalf of a shareholder
• Proxies are solicited by management but can also be contested (proxy fight)
Rule 144 (Restricted & Control Stock)
• 6-month holding period (fully paid)
• Volume limits: greater of 1% outstanding or avg weekly volume (4 weeks)
• Form 144 filed if sale >5,000 shares or >$50K in 90 days
• Rule 144A: Allows resale of restricted securities to QIBs (Qualified Institutional Buyers) without registration
• Volume limits: greater of 1% outstanding or avg weekly volume (4 weeks)
• Form 144 filed if sale >5,000 shares or >$50K in 90 days
• Rule 144A: Allows resale of restricted securities to QIBs (Qualified Institutional Buyers) without registration
Common Exam Trap
Short-swing profits (Section 16b) don't require proof of insider information — it's automatic and measured trade date to trade date. If an insider buys and sells within 6 months at a profit, the profit goes back to the company, period. Also: the 5% ownership trigger (Schedule 13D) and the 10% insider threshold (Section 16) are different — the exam loves mixing these up.
'34 = PEOPLE — The 1934 Act is about people trading in the market they created
Quick Check
A company is issuing stock for the first time. Which act primarily governs this?
Securities Act of 1933
This is a new issue (IPO), so it falls under the '33 Act. Remember: '33 = NEW
This is a new issue (IPO), so it falls under the '33 Act. Remember: '33 = NEW
Trust Indenture Act of 1939
Purpose
Requires a trustee for corporate debt securities offerings over $50M
Not Applicable To
Municipal bonds, Treasuries, commercial paper
Investment Company Act of 1940
Board Requirement
40% independent directors minimum
Voting
Majority vote required for changes
Leverage Limits
300% asset coverage for bank borrowings
Registration
Must register with SEC
Investment Advisers Act of 1940 Series 65/66
Registration Thresholds (RAUM) Tested on 65/66
Under $100M → State registration
$100M–$110M → May choose SEC or state (buffer zone)
$110M+ → Must register with SEC
Under $90M → Must withdraw SEC registration
For the SIE, just know IAs exist and have a fiduciary duty. The RAUM thresholds are tested in depth on the Series 65/66.
$100M–$110M → May choose SEC or state (buffer zone)
$110M+ → Must register with SEC
Under $90M → Must withdraw SEC registration
For the SIE, just know IAs exist and have a fiduciary duty. The RAUM thresholds are tested in depth on the Series 65/66.
Fiduciary Duty
Must act in client's best interest at all times
Exemptions
Broker-dealers (solely incidental), banks, lawyers
Required Form
Form ADV — the standard registration form for IAs
Federal Reserve Board Regulations
Section 2 of 6 · 4 regulations
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SIE focus: Reg T is the big one here — know the 50% initial margin and the basics. Regs U, G, and Fed Reg D are good to recognize but rarely tested in depth on the SIE.
Regulation T
"The Broker-Dealer Rule"
Authority
Securities Exchange Act of 1934, Section 7
Initial Margin
50% (Reg T requirement)
Payment Deadline
T+3 (Trade + 1 day settlement + 2 days Reg T) — legacy phrasing: "S+2"
Current Settlement Cycle 2025 Standard
Industry moved to T+1 settlement (effective May 2024). This means payment is now due by T+3: trade date + 1 day to settle + 2 additional Reg T days. Older materials may reference T+2 settlement — that's outdated.
Extension
Broker may request extension from SRO (FINRA)
Free-Riding
Prohibited — results in 90-day account freeze penalty
T = "They lend to customers" — Reg T governs broker-dealers extending credit
Regulation U Bonus Detail
Covers
Banks lending for securities purchases
Margin Requirement
Same 50% initial margin
U = "yoU borrow from a bank" — banks extending margin credit
Regulation G Bonus Detail
Covers
Non-broker, non-bank lenders extending securities credit
Margin Requirement
Same 50% initial margin
Regulation D (Federal Reserve) Bonus Detail
Covers
Sets reserve ratios for depository institutions
Common Exam Trap
The Fed's Reg D (reserve requirements) is completely different from the SEC's Reg D (private placements). Don't confuse them!
FINRA Rules & Regulations
Section 3 of 6 · 7 rules
FINRA Rule 2111
Suitability
Reasonable-Basis
Understand the product itself
Customer-Specific
Suitable for THIS customer's profile
Quantitative
Not excessive trading (churning)
Foundation
Know Your Customer (KYC) requirement
Note: Reg BI (2020) established a higher standard than suitability for broker-dealers
FINRA Rule 2210
Communications with the Public
Retail Communication
General public — principal approval required
Correspondence
25 or fewer retail investors
Standard
All communications must be fair, balanced, and not misleading
FINRA Rule 4512
Customer Account Information
Required Info
Name, address, SSN/TIN, employment, annual income, net worth, investment objectives, risk tolerance
Update Frequency
At least every 36 months
Trusted Contact Person
Firms must make reasonable efforts to obtain the name of a trusted contact person for each customer's account (especially specified adults age 65+). If financial exploitation is suspected, the firm can place a temporary hold on disbursements for up to 25 business days while investigating.
FINRA Rule 5130
New Issue Allocations
Cannot Buy IPOs
Registered reps, immediate family, finders & fiduciaries
Purpose
Prevents insiders from flipping hot issues
De Minimis Exemption
10% rule
FINRA Rule 5131
Spinning
Prohibition
Cannot give IPO allocations to executives in exchange for investment banking business. Applies to executive officers and directors.
FINRA Rule 3220 Updated 2026
Gifts & Gratuities
Annual Gift Limit
$300 per person per year (increased from $100, effective March 30, 2026)
Applies To
Gifts to employees of other broker-dealers, institutional clients, vendors, and counterparties
Does NOT Apply To
Gifts to a firm's own employees, or to individual retail customers
Business Entertainment
NOT subject to the $300 limit if the giver is present. Must be reasonable and not excessive.
Exempt from Limit
De minimis items (pens, tote bags), personal gifts (wedding, bereavement), commemorative deal toys, disaster donations
Ticket Valuation
Higher of cost or face value. All other gifts valued at cost (excluding tax & delivery).
Aggregation
Firms must aggregate all gifts from the firm and its associated persons to each recipient per year. Gifts must be reviewed by someone other than the giver.
FINRA Rule 3110 AI Focus
Supervision
Core Requirement
Every firm must establish and maintain a supervisory system reasonably designed for its business, including written supervisory procedures (WSPs).
AI & Technology (Regulatory Notice 24-09)
FINRA's rules are technology-neutral. AI tools — including generative AI — must be supervised under the same framework as any other technology. AI-generated communications are subject to Rule 2210. Third-party AI vendors do not relieve the firm of its supervisory obligations. Firms must also address AI-related cybersecurity risks such as deepfakes and synthetic identities.
“AI Washing”
Misrepresenting a firm's use of AI violates anti-fraud provisions. The SEC has brought enforcement actions for overstating AI capabilities.
Recordkeeping
AI-generated outputs that are business communications must be retained under the same books-and-records rules as human-written content.
Quick Check
Can a registered rep purchase shares in a hot IPO for their personal account?
No — FINRA Rule 5130
Registered reps are restricted persons and cannot purchase IPO shares. This prevents industry insiders from benefiting unfairly from hot new issues.
Registered reps are restricted persons and cannot purchase IPO shares. This prevents industry insiders from benefiting unfairly from hot new issues.
State Regulations (Blue Sky Laws) Primarily Series 63
Section 4 of 6 · 4 topics
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SIE note: The SIE may reference that state securities laws exist, but the three registration methods (Coordination, Qualification, Filing) are classic Series 63 material. Good to be aware of, but don't lose sleep memorizing these for the SIE.
Uniform Securities Act (USA) Series 63
What It Is
Not a federal law — serves as a template for individual states. Each state can adopt or modify. Defines securities, registration, and fraud at the state level.
Registration by Coordination Series 63
How It Works
Register simultaneously with the SEC and state(s). Most common for interstate offerings. State registration becomes effective when SEC declares effective.
Registration by Qualification Series 63
How It Works
Intrastate offerings only (within one state). No SEC registration needed. State has full authority over timing and approval.
Registration by Filing Series 63
Notice Filing
How It Works
For federally registered securities. State cannot deny registration — can only require filing a notice and paying a fee.
Other Important Acts & Rules
Section 5 of 6 · 8 regulations
Securities Investor Protection Act (SIPA) — 1970
Coverage
$500K per customer ($250K cash limit)
Protects Against
Broker-dealer failure (not market losses)
Does NOT Cover
Market losses, commodities
Funded By
Broker-dealer assessments
Insider Trading & Securities Fraud Enforcement Act — 1988
Damages
Treble damages (3× profit or loss avoided)
Who Can Sue
Contemporaneous traders
Supervisor Liability
Controlling persons liable if they failed to supervise
Telephone Consumer Protection Act (TCPA)
Calling Hours
8 AM – 9 PM (recipient's time zone)
Do Not Call Registry
Must check every 31 days
Firm DNC List
Honor for 5 years
Exemption
Prior business relationship = 18-month exemption
USA PATRIOT Act — 2001
CIP Required Info
Name, address, date of birth, SSN/TIN
SAR Threshold
Suspicious Activity Report for transactions ≥ $5,000
CTR Threshold
Currency Transaction Report for cash ≥ $10,000
Regulation Best Interest (Reg BI) — 2020
Four Obligations
Disclosure, Care, Conflict of Interest, Compliance
Standard
Higher than suitability — must act in customer's best interest
Form CRS
Customer relationship summary required
Securities Act Rule 144
Holding Period
6 months (must be fully paid)
Volume Limit
Greater of 1% shares outstanding or avg weekly volume (last 4 weeks)
Manner of Sale
Routine trading transactions
Notice Filing
Form 144 required if sale >5,000 shares OR >$50,000 in 90 days
Securities Act Regulation D
Rule 506(b)
Unlimited accredited investors, max 35 non-accredited (must be sophisticated)
Rule 506(c)
Unlimited accredited only — can advertise / general solicitation
Registration
No SEC registration required
Filing
Form D filing within 15 days of first sale
Securities Act Regulation A+
Tier 1
Up to $20M — state & federal review required
Tier 2
Up to $75M — federal only, audited financials required
Key Features
Can "test the waters" / general solicitation allowed. Offering circular required (not a full prospectus).
"Regulation Letter Soup" — Quick Reference
Section 6 of 6 · Don't confuse these!
Federal Reserve Regulations (Margin & Credit)
T
Reg T
Credit extended by broker-dealers
T = "They lend" (brokers)U
Reg U Bonus
Credit extended by banks
U = "yoU" (bank lends to you)G
Reg G Bonus
Credit by other lenders (not brokers/banks)
G = "General others"D
Reg D (Fed) Bonus
Bank reserve requirements
NOT the SEC's Reg D! SEC Regulations (Securities)
D
Reg D (SEC)
Private placements exemption (Rule 506)
D = "Direct to investors"A+
Reg A+
Mini-IPO exemption (up to $75M)
A+ = "Almost public" (Tier 1 & 2)S
Reg S
Offshore sales exemption
S = "Seas" (overseas sales)S-P
Reg S-P Updated 2024
Privacy of customer info. Initial notice at account opening, annual notice, opt-out rights for third-party sharing.
2024 Amendments: Firms must now maintain a written incident response program for data breaches. Must notify affected customers within 30 days. Must oversee service providers' safeguards.
S-P = "Super Privacy"BI
Reg BI
Best Interest standard for broker-dealers
BI = "Best Interest" (literal!)Common Exam Trap
Fed's Reg D (reserve requirements) vs SEC's Reg D (private placements) — completely different regulations from different authorities!
Test Yourself
Concept: Securities Acts
Which act created the SEC and primarily regulates trading in the secondary market?
Correct!
The 1933 Act is the "Paper Act" (new issues/IPOs in the PRIMARY market). The 1934 Act is the "People Act" (trading in the SECONDARY market). The 1934 Act created the SEC to enforce both.
We have 1,000+ more questions like this.
Not quite
'33 = NEW issues. '34 = PEOPLE trading (secondary market). The SEC was created by the Exchange Act of 1934 to police the markets.
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