FINRA Securities Industry Essentials Exam (SIE) SIE Question # 97 Topic 10 Discussion
SIE Exam Topic 10 Question 97 Discussion:
Question #: 97
Topic #: 10
A broker-dealer (BD) is underwriting an initial public offering (IPO). According to industry rules, which of the following customers is eligible to participate in the IPO?
A.
An unregistered sales assistant employed by the BD
B.
The BD ' s branch office manager ' s unemployed spouse
C.
A customer of the BD who is the president of a local bank
D.
The chief financial officer of a fast-food chain, whose brother is a registered representative employed by the BD
FINRA Rule 5130 restricts participation in IPOs for certain individuals (e.g., restricted persons) to prevent potential conflicts of interest. Restricted persons include employees of broker-dealers and their immediate family members.
C is correct because the president of a local bank is not considered a restricted person under FINRA Rule 5130.
A is incorrect because employees (registered or not) of broker-dealers are restricted.
B is incorrect because immediate family members of broker-dealer employees are restricted, even if unemployed.
D is incorrect because the immediate family of a registered representative is restricted.
[Reference: FINRA Rule 5130 (Restrictions on the Purchase and Sale of IPOs), , , , , ]
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