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SIE regulatory framework practice test

Free SIE exam questions for the outline section Overview of the Regulatory Framework (9% of the scored items): registration, Forms U4 and U5, continuing education and employee conduct.

Tap an answer to check it, or open "Show the answer and rationale" under each question. Customers in the questions are fictional. Exam practice only, not investment advice.

Question 1 of 20

Once FINRA Rule 3290 takes effect on October 25, 2027, which outside job will generally no longer need to be reported to the firm?

  1. Advising friends on crypto assets
  2. Working weekends as a bartender
  3. Selling insurance part-time
  4. Serving as a part-time bank teller
Show the answer and rationale

Answer: B

Rule 3290 focuses on investment-related activities (securities, crypto assets, banking, insurance). Non-investment jobs such as bartending will not be reportable under it. Until then, Rule 3270 requires notice.

📚 Learn it: Side Hustles: Tell Your Firm First

Question 2 of 20

Without any pay, a rep helps his sister sell shares of her private company to their brother. Under Rule 3280, this is generally:

  1. Allowed only if the firm records it as its own trade
  2. A violation unless filed with the state regulator
  3. Prohibited, because all family deals require FINRA approval
  4. Excluded, as a family deal with no pay
Show the answer and rationale

Answer: D

Rule 3280 excludes transactions among immediate family members where no associated person receives selling compensation. No FINRA or state filing is required for it.

📚 Learn it: Selling Away: The Deal Your Firm Never Saw

Question 3 of 20

A municipal finance professional gives $200 to a governor candidate in a state where she cannot vote. The candidate wins. What is the risk under G-37?

  1. None, because $200 is below $250
  2. She must register as a state lobbyist within 30 days
  3. A two-year ban for her firm with that issuer
  4. Her firm must ask the campaign to refund the money
Show the answer and rationale

Answer: C

The $250 de minimis requires the contributor to be entitled to vote for the official. Because she cannot vote for this candidate, even $200 can trigger the two-year ban on municipal securities business with that issuer.

📚 Learn it: Gifts, Dinners and Campaign Checks

Question 4 of 20

A rep left the industry 30 months ago and did not elect MQP. She last registered then, after passing the SIE five years ago. To re-register as a general securities rep she generally must:

  1. Retake the Series 7 but not the SIE
  2. Only finish this year's Regulatory Element
  3. Retake both the SIE and the Series 7
  4. Simply have her new firm file a Form U4
Show the answer and rationale

Answer: A

Her Series 7 lapsed after two years out. The SIE runs four years from the later of passing it or last registration, and she was registered 30 months ago, so the SIE is still valid. CE alone or a U4 filing is not enough.

📚 Learn it: Continuing Education and Keeping Your Exams Alive

Question 5 of 20

A person's only felony conviction was 12 years ago. Which statement is generally accurate?

  1. It permanently disqualifies the person from all FINRA member firms
  2. It is deleted from CRD and never has to be disclosed again
  3. It disqualifies the person from principal roles only
  4. It is no longer a statutory disqualification but must still be disclosed on U4
Show the answer and rationale

Answer: D

The felony-based statutory disqualification looks back 10 years, so a 12-year-old conviction no longer disqualifies. Form U4 still asks whether the person has ever been convicted of a felony, so it is disclosed.

📚 Learn it: Disqualified: Felonies, 8210 and FINRA Discipline

Question 6 of 20

After receiving a rep's notice of an outside business activity, the firm should:

  1. Forward it to the SEC for a determination of legality
  2. File the notice with FINRA within 10 business days
  3. Assess the activity's risks to customers and duties
  4. Automatically approve it if the rep is not paid by it
Show the answer and rationale

Answer: C

The firm must evaluate whether the activity could interfere with the person's duties, be seen by customers as part of the firm's business, or really be a private securities transaction. Notices are not filed with FINRA or the SEC.

📚 Learn it: Side Hustles: Tell Your Firm First

Question 7 of 20

A rep pays personally for a customary wedding gift to a longtime friend who works at another firm. Under FINRA's guidance, the gift is:

  1. Counted toward the $300 limit
  2. Prohibited in all circumstances
  3. Excluded as a personal gift
  4. Reportable to FINRA within 30 days
Show the answer and rationale

Answer: C

Personal gifts for life events such as weddings, if customary, reasonable and not business-related, are excluded from the limit. A gift paid by the firm would be presumed business-related.

📚 Learn it: Gifts, Dinners and Campaign Checks

Question 8 of 20

A rep agrees to serve, without pay, as a director of a friend's privately held software company. Under Rule 3270, is prior written notice required?

  1. Yes, being a director of another company is covered
  2. No, unpaid positions are never covered by it
  3. No, private companies are exempt from the rule
  4. Only if the company has over $1 million in sales
Show the answer and rationale

Answer: A

Rule 3270 lists serving as an employee, officer, director or partner of another person, paid or not, alongside compensated activities, so notice is required. There is no private-company or size exemption.

📚 Learn it: Side Hustles: Tell Your Firm First

Question 9 of 20

Under Rule 3270, notice is required when a registered person will receive or reasonably expects compensation from:

  1. Interest on a savings account at a bank
  2. Any business activity outside the member firm
  3. The member firm's regular payroll
  4. Dividends on stock in a personal account
Show the answer and rationale

Answer: B

Compensation, or a reasonable expectation of it, from business activity outside the member relationship triggers notice. Firm pay and passive investment income do not.

📚 Learn it: Side Hustles: Tell Your Firm First

Question 10 of 20

A firm disapproves a rep's request to take part in a compensated private securities transaction. The rep:

  1. May not take part in it in any manner
  2. May proceed if the customer signs a waiver
  3. May proceed if no firm customers invest
  4. May proceed if he gives up the fee later
Show the answer and rationale

Answer: A

Under Rule 3280, if the firm disapproves, the person may not participate, directly or indirectly. Waivers, avoiding firm customers or forgoing pay after the fact do not cure a disapproval.

📚 Learn it: Selling Away: The Deal Your Firm Never Saw

Practice 10 more overview of the regulatory framework questions free →

A timed or tutor-mode set in the app, scored by SIE section, with every miss saved for review. Free, no sign-up needed.

Question 11 of 20

A rep gave a $200 gift in February to a pension manager at another company. In May he wants to give the same person $150. Under FINRA Rule 3220 as amended in 2026:

  1. Permitted, since each gift is under $300
  2. Permitted, since the limit is per gift
  3. Not permitted; the total tops $300
  4. Not permitted; any second gift is barred
Show the answer and rationale

Answer: C

The $300 limit is per person per year, so $200 + $150 = $350 exceeds it. The limit is cumulative, not per gift, and a second gift within the limit would be fine.

📚 Learn it: Gifts, Dinners and Campaign Checks

Question 12 of 20

Which written customer complaint must a firm report to FINRA within 30 calendar days under Rule 4530(a)?

  1. One about a quarterly fee
  2. One about a slow website
  3. One about phone hold times
  4. One alleging theft of funds
Show the answer and rationale

Answer: D

Rule 4530(a) requires reporting written complaints alleging theft, misappropriation of funds or securities, or forgery. Service and fee complaints are counted in the quarterly statistics instead.

📚 Learn it: Your Own Accounts and Events You Must Report

Question 13 of 20

Which new hire is most likely to be placed under heightened supervision?

  1. A clerk who handles only mail
  2. A rep who just passed the SIE and Series 7
  3. A rep with many recent complaints
  4. A rep transferring with a clean record
Show the answer and rationale

Answer: C

Heightened supervision targets people whose history, such as complaints or disciplinary events, suggests extra risk. A new rep or a clean transfer is supervised normally, and a clerk does no securities business.

📚 Learn it: Supervision: Every Rep Has a Principal

Question 14 of 20

Which statement about the SIE's role in becoming a registered representative is accurate?

  1. Only employees sponsored by a member firm may take it
  2. Passing it alone lets a person sell stocks to the public
  3. It replaces the need for state agent registration
  4. It is a corequisite, paired with a qualification exam
Show the answer and rationale

Answer: D

The SIE is a corequisite: a person must also pass a qualification exam such as the Series 7 and be registered through a firm. It needs no firm sponsorship, and it does not replace state registration.

📚 Learn it: Who Needs a License (and Who Doesn't)

Question 15 of 20

Which of these would an investor generally be able to see on BrokerCheck?

  1. The broker's home address and personal phone
  2. The broker's Social Security number and birth date
  3. Customer complaints and regulatory actions
  4. The broker's commission payout rate
Show the answer and rationale

Answer: C

BrokerCheck shows registration, employment history and disclosures such as customer complaints and regulatory actions. Personal identifiers, home contact details and pay arrangements are kept confidential.

📚 Learn it: U4 In, U5 Out: The Forms That Follow You

Question 16 of 20

Who develops and delivers the Regulatory Element content?

  1. Each state's securities regulator
  2. The SEC
  3. FINRA
  4. Each firm's training department
Show the answer and rationale

Answer: C

FINRA delivers the Regulatory Element to all registered persons. Firms design the separate Firm Element; the SEC and states do not deliver either one.

📚 Learn it: Continuing Education and Keeping Your Exams Alive

Question 17 of 20

A statutorily disqualified person may still associate with a member firm if:

  1. He waits 90 days after the event and then reapplies
  2. He passes the SIE and Series 7 a second time
  3. A customer signs a written waiver
  4. FINRA approves an application filed by the firm
Show the answer and rationale

Answer: D

A member may apply to FINRA for relief to employ a disqualified person, and FINRA decides whether to approve. Waiting, re-testing or customer waivers do not remove the disqualification.

📚 Learn it: Disqualified: Felonies, 8210 and FINRA Discipline

Question 18 of 20

Under today's rules, who may restrict or prohibit a rep's outside business activity?

  1. The member firm
  2. The MSRB
  3. The rep's state of residence
  4. The rep's customers
Show the answer and rationale

Answer: A

The firm reviews the notice and may impose conditions or prohibit the activity. Customers do not decide, and the MSRB and states do not review individual side jobs.

📚 Learn it: Side Hustles: Tell Your Firm First

Question 19 of 20

FINRA Rule 3280 on private securities transactions applies to:

  1. Branch managers only
  2. All associated persons
  3. Only reps with complaints
  4. Registered persons only
Show the answer and rationale

Answer: B

Rule 3280 reaches every associated person, registered or not. Rule 3270 is the one limited to registered persons.

📚 Learn it: Selling Away: The Deal Your Firm Never Saw

Question 20 of 20

How long does a G-37 ban on municipal securities business with an issuer last after a disqualifying contribution?

  1. Two years
  2. One year
  3. Five years
  4. Six months
Show the answer and rationale

Answer: A

G-37 bans the dealer from municipal securities business with that issuer for two years after the contribution. The other periods are not in the rule.

📚 Learn it: Gifts, Dinners and Campaign Checks

Practice 10 more overview of the regulatory framework questions free →

A timed or tutor-mode set in the app, scored by SIE section, with every miss saved for review. Free, no sign-up needed.

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