SIE (Securities Industry Essentials) Practice Exam

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When is a broker-dealer permitted to accept payment for a new issue from a new customer?

After the customer's first transaction is completed
Upon account opening
When the registration is effective
After receiving approval from FINRA

The correct answer is: When the registration is effective

A broker-dealer is not permitted to accept payment for a new issue from a new customer until the registration is effective. This means that the securities being offered have been registered with the appropriate regulatory bodies and all necessary disclosures have been made available to investors. It is important for a broker-dealer to only accept payment from a new customer once the registration is effective to ensure compliance with securities laws and to protect the customer from potential fraudulent activities. Therefore, options A, B, and D are incorrect because they do not involve the completion of the registration process.