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The SEC is the federal securities regulator that oversees and approves rules proposed by self-regulatory organizations such as FINRA, MSRB, and exchanges. FINRA itself writes rules but cannot implement them without SEC approval. The OCC clears options trades, the MSRB writes rules for municipals, and the Fed oversees monetary policy. The SIE exam requires understanding of the relationships between regulators and SROs.

Gross Domestic Product (GDP) growth is a coincident indicator, meaning it reflects the current state of the economy as it happens. Leading indicators predict future trends (e.g., stock prices, building permits), while lagging indicators confirm trends after they occur (e.g., unemployment rate, corporate profits). The SIE exam requires candidates to classify indicators correctly.

The primary market refers to the issuance of new securities directly from issuers to investors, raising new capital for the issuer. When a corporation issues stock in an IPO or follow-on offering, it is a primary market activity. Secondary market transactions occur between investors—exchanges (NYSE, Nasdaq) or dealer-to-dealer. Mutual fund rebalancing and dealer trading are secondary market. The SIE exam frequently tests candidates on the difference between primary (issuer benefits) and secondary (investor-to-investor) markets and the role of underwriters, registration, and distribution in capital formation.

The Securities and Exchange Commission (SEC) is the federal agency regulating securities markets, including public company disclosure, broker-dealers, and investment companies. FINRA and MSRB are SROs under SEC oversight. OCC clears options but does not regulate markets. The SIE exam requires clear recognition of the SEC’s role as the primary securities regulator.

A market order is executed immediately at the best available price, guaranteeing execution but not price. A limit order guarantees price but not execution. A stop-limit order triggers a limit order, which may not execute. All-or-none orders require full execution of the entire quantity, not partial fills. The SIE stresses order types, their uses, and how execution priorities work on exchanges and in OTC markets.