Securities Exchange Act Of 1934

The Securities Exchange Act of 1934:

1. A.Created the SEC and regulates secondary-market tradingCorrect - the 1934 Act governs trading and created the SEC.
2. B.Governs only new issuesNew issues belong to the 1933 Act. The 1934 Act takes over from there, governing what happens once a security has been sold to the public and begins trading.
3. C.Created the Federal ReserveThe central bank was established by separate legislation two decades earlier. What the 1934 Act created was the SEC, the agency charged with overseeing the trading markets.
4. D.Exempts all securities from regulationThis inverts the statute's purpose. The Act extended federal oversight to exchanges, broker-dealers, and trading practices rather than removing securities from regulation.

Why: The 1934 Act created the SEC and regulates the secondary market (trading, exchanges, broker-dealers).

Insider trading is prohibited under the:

1. A.Investment Company Act of 1940The 1940 Act governs how mutual funds and other investment companies are organized and run. It has nothing to say about trading on inside information.
2. B.Trust Indenture ActThe Trust Indenture Act deals with the terms of corporate bond indentures and the role of the trustee protecting bondholders. It is a debt-documentation statute, not a trading-conduct one.
3. C.Securities Exchange Act of 1934Correct - the 1934 Act governs insider trading.
4. D.Securities Act of 1933The 1933 Act does carry antifraud provisions, which makes this a reasonable guess, but its reach is the offering process itself. Trading on material nonpublic information in the open market is addressed by the 1934 Act.

Why: The Securities Exchange Act of 1934 (and later insider-trading acts) prohibits trading on material nonpublic information.

The Securities and Exchange Commission was created by which law?

1. A.The Securities Exchange Act of 1934Correct — the 1934 Act created the SEC and governs secondary-market trading.
2. B.The Securities Act of 1933The 1933 Act governs new issues and prospectus delivery — it predates the SEC by a year.
3. C.The Maloney Act of 1938The Maloney Act authorized SROs for the OTC market (leading to the NASD, FINRA's predecessor) — it did not create the SEC.
4. D.The Investment Advisers Act of 1940The Advisers Act regulates investment advisers; the SEC already existed by 1940.

Why: The Securities Exchange Act of 1934 — the law governing the secondary market — established the SEC and gave it authority over exchanges, broker-dealers, and the SROs.

Which subject falls under the Securities Exchange Act of 1934 rather than the Securities Act of 1933?

1. A.Delivery of a prospectus to purchasers of a new issueWrong. Prospectus delivery for new issues is a 1933 Act requirement.
2. B.Exemptions for private placements of newly issued securitiesWrong. Registration exemptions such as Regulation D live in the 1933 Act.
3. C.The cooling-off period before an offering becomes effectiveWrong. The cooling-off period is part of the 1933 Act registration process.
4. D.Registration and regulation of broker-dealers and exchangesCorrect. The 1934 Act governs the participants and the trading markets, along with ongoing reporting and manipulation rules.

Why: Registration and regulation of broker-dealers and exchanges is 1934 Act territory, along with trading practices, ongoing reporting, and market manipulation.