SIE (Securities Industry Essentials) Practice Exam

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Which piece of legislation pertains to the secondary market?

  1. Securities Act of 1933

  2. Investment Company Act of 1940

  3. Securities Exchange Act of 1934

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

The correct answer is: Securities Exchange Act of 1934

The Securities Exchange Act of 1934 specifically pertains to the secondary market, which is where investors can buy and sell already-issued securities such as stocks on a stock exchange. This act was created to regulate and facilitate the secondary market, which differs from the Securities Act of 1933 and the Investment Company Act of 1940, which pertain to the primary market for new securities issuances and the regulation of investment companies, respectively. The Dodd-Frank Wall Street Reform and Consumer Protection Act, while important for financial regulation, does not specifically focus on the secondary market.

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