SIE (Securities Industry Essentials) Practice Exam

Which act's main purpose does NOT include keeping the investing public fully informed when a security is being introduced in the primary market?

1. The Uniform Securities Act

2. The Securities Act of 1933

3. The Securities Exchange Act of 1934

4. Dodd-Frank Wall Street Reform and Consumer Protection Act

The correct answer is: The Uniform Securities Act

The Uniform Securities Act's primary purpose is to establish a framework for regulating the securities industry at the state level, not to specifically govern the flow of information to investors about new securities. This act aims to protect investors by requiring securities practitioners to be registered and by preventing fraudulent practices, but it does not directly focus on the detailed disclosure of information regarding newly issued securities in the primary market. In contrast, the Securities Act of 1933 is specifically designed to require that investors receive significant information about securities being offered for public sale, focusing on transparency and preventing fraud. Similarly, the Securities Exchange Act of 1934 regulates trading in secondary markets and imposes reporting requirements on publicly traded companies to keep the investing public informed. The Dodd-Frank Act, also, while focusing primarily on broader financial reforms, includes provisions that aim at protecting investors and enhancing transparency in financial markets. As such, the Uniform Securities Act does play a role in protecting investors but is not primarily focused on the introduction of securities in the primary market and the requisite disclosure to investors.