Regulatory Framework — SEC and FINRA

SEC Role

• The SEC administers the federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934. In the investment banking context, the SEC oversees registration, disclosure, tender offer rules, proxy rules, reporting obligations, and antifraud provisions.
• Key concepts include registration statements, prospectus delivery, material disclosure, Rule 10b-5 antifraud standards, and tender offer filing requirements under the Williams Act framework.

FINRA Role

• FINRA regulates broker-dealers and associated persons through rules on registration, supervision, communications, conflicts, suitability or best-interest obligations where applicable, public offerings, research, and conduct.
• For investment banking, FINRA rules address underwriting compensation review, conflicts in public offerings, research analyst restrictions, private placement practices, and fair dealing obligations.

Investment Banking Context

• Bankers must manage information barriers, restricted lists, MNPI handling, conflicts committees, recordkeeping, and supervisory review. Transactions may trigger filing, waiting period, shareholder approval, or fairness-related process requirements depending on structure and issuer status.
• Anti-manipulation and market conduct rules also matter around distributions, stabilization, and insider trading risk.

Series 79 focus

• Be able to distinguish SEC statutory authority from FINRA member-rule authority and identify which regulator is implicated by disclosure, offering conduct, licensing, supervision, or trading restrictions. Questions often test offerings under the 1933 Act, secondary trading under the 1934 Act, and FINRA's role over broker-dealer practices.