SIE Exam Question 961: Answer and Explanation

Question: 961

Which of the following acts established a non-profit membership corporation that oversees the liquidation of member broker-dealers that close when the broker-dealer is bankrupt or in financial trouble, and customer assets are missing?

• A. Securities Investor Protection Corporation Act of 1970
• B. Securities Act Amendments of 1975
• C. Uniform Prudent Investors Act of 1994
• D. National Securities Market Improvement Act of 1996

Correct Answer: A

Explanation:

The Securities Investor Protection Corporation Act of 1970 established a non-profit membership corporation that oversees the liquidation of member broker-dealers that close when the broker-dealer is bankrupt or in financial trouble, and customer assets are missing.