SIE practice questionmediumPurpose of SRO Registration
Why is SRO registration required for broker-dealers?
- AFor tax purposes
- BTo ensure compliance with ethical and operational standards✓ Correct answer
- CTo allow them to operate outside the SEC’s jurisdiction
- DSo they can open bank accounts
Explanation
Why B — To ensure compliance with ethical and operational standards
SRO registration ensures firms adhere to industry rules and standards.
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Related Regulatory Framework questions
- Which statement best compares FINRA and the MSRB?
- A broker-dealer that is a member of both FINRA and the MSRB must follow whose rules?
- A broker-dealer found in violation of SRO rules may be subject to which of the following penalties?
- Which statement is true about firms that are not SRO members?
- What is a key ongoing obligation of SRO member firms?
- After exhausting the SRO's internal appeals, a firm can appeal disciplinary decisions to:
- If an SRO rule conflicts with a state securities law, which prevails?
- What can an SRO do to ensure compliance among its members?