Finra SIE Exam - Topic 6 Question 1 Discussion

Actual exam question for Finra's SIE exam

Question #: 1
Topic #: 6

[All SIE Questions]

Under SEC Regulation A, which of the following market participants, if deemed to be a bad actor, will disqualify the offering from reliance on this registration exemption?

ACustodian

BUnderwriter

CTransfer agent

DClearing corporation

Show Suggested Answer

Suggested Answer: B

SEC Regulation A provides a registration exemption for smaller public offerings but includes a 'bad actor' disqualification. If certain key parties, such as the issuer, underwriter, or affiliates, have been involved in securities violations, the exemption is forfeited.

B is correct because underwriters are considered essential participants, and their status as bad actors disqualifies the offering.

A, C, and D are incorrect because custodians, transfer agents, and clearing corporations are not included in the 'bad actor' provisions of Regulation A.

by Lea at Feb 08, 2025, 11:57 PM

Limited Time Offer

25%

Off

Get Premium SIE Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Tresa

4 months ago

Underwriters are the ones that can cause disqualification under SEC Regulation A.

upvoted 0 times

...

Hana

4 months ago

Really? I didn't know bad actors could affect the whole offering like that.

upvoted 0 times

...

Jules

4 months ago

No way, it's the custodian!

upvoted 0 times

...

Lemuel

5 months ago

I thought it was the transfer agent?

upvoted 0 times

...

Sheldon

5 months ago

It's definitely the underwriter that can disqualify the offering.

upvoted 0 times

...

Stephaine

5 months ago

I believe the underwriter is the key player here, but I’m not confident about the others. I should have reviewed that section more thoroughly!

upvoted 0 times

...

Phyliss

5 months ago

I’m a bit confused about the roles of each participant. I thought custodians had some responsibility, but I can't recall if they fall under the bad actor rule.

upvoted 0 times

...

Leatha

5 months ago

I feel like we went over a similar question in class, and I think it was the underwriter that could disqualify the offering.

upvoted 0 times

...

Ahmed

5 months ago

I think I remember that underwriters can be considered bad actors, but I'm not entirely sure if they are the only ones that matter in this context.

upvoted 0 times

...

Carmelina

5 months ago

I've got a good feeling about B. Underwriter on this one. The question is focused on market participants, and the underwriter would be a key player in a Regulation A offering, so if they were a bad actor, that would likely disqualify the whole thing. Just my two cents!

upvoted 0 times

...

Crista

5 months ago

I'm a little confused on this one. Is the question asking about who specifically would be considered a "bad actor" under Regulation A? Or is it about which market participant's status as a bad actor would disqualify the offering? I want to make sure I understand the question properly before answering.

upvoted 0 times

...

Golda

5 months ago

Okay, let me see if I can break this down. Regulation A has certain requirements around "bad actors" that would disqualify the offering. Based on the options provided, I think the underwriter would be the most likely to fall into that category if they were deemed a bad actor.

upvoted 0 times

...

Roxane

5 months ago

Hmm, this is a tricky one. I'm not totally sure about the specifics of Regulation A and who would be considered a "bad actor" under that rule. I'll have to think this through carefully.

upvoted 0 times

...

Aleisha

6 months ago

I'm pretty sure the answer is B. Underwriter. The question mentions "market participants" and Regulation A, so I think the key is identifying which of these roles would disqualify the offering if deemed a "bad actor."

upvoted 0 times

...

Goldie

1 year ago

The underwriter is the one who can really mess things up if they're a bad actor. Better keep an eye on those guys!

upvoted 0 times

Billye

1 year ago

That's true, they play a crucial role in the offering process so it's important to make sure they're in compliance.

upvoted 0 times

...

Iluminada

1 year ago

Yeah, underwriters can definitely cause some trouble if they're not on the up and up.

upvoted 0 times

...

Luisa

1 year ago

Underwriter, for sure. Although, I heard the SEC has a sense of humor and might disqualify the offering if the underwriter's name is 'Sir Sketchy McSketcherson'.

upvoted 0 times

Amos

1 year ago

That's true, the SEC takes the role of underwriter very seriously.

upvoted 0 times

...

Rupert

1 year ago

I agree, underwriter is a key player in the offering process.

upvoted 0 times

...

Lorrie

1 year ago

Clearly it's the underwriter. I mean, who else would have that much influence on the offering? Except maybe the clearing corporation, but they're just the middlemen, right?

upvoted 0 times

...