Introduction

The series 57 exam is administered by FINRA and qualifies a person to trade equity and debt securities on an agency or principal basis for a broker dealer. The Series 57 exam will be presented in a 125-question multiple-choice format. Each candidate will have three hours 45 minutes to complete the exam. A score of 70% or higher is required to pass. A candidate is not required to have been passed any other exam prior to taking the series 57 exam. It is recommended that candidates spend at least 50 hours preparing for the exam . The series 57 material has been provided by The Securities Institute to help Investopedia visitors prepare for the exam. In order to successfully complete the exam it is recommended that you read the following material in addition to reading a full textbook and doing as many practice exams as you can. This first chapter will build the foundation upon which the rest of this text is built.

The Securities Act of 1933 was the first major piece of securities industry regulation that was brought about largely as a result of the stock market crash of 1929. Other major laws were also enacted to help prevent another meltdown of the nation’s financial system such as The Securities Exchange Act of 1934, but we will start our review with the Securities Act of 1933 as it regulates the issuance of corporate securities.

The Securities Act of 1933 was the first major piece of securities industry legislation and it regulates the primary market. The primary market consists exclusively of transactions between issuers of securities and investors. In a primary market transaction, the issuer of the securities receives the proceeds from the sale of the securities. The Securities Act of 1933 requires non-exempt issuers (typically corporate issuers) to file a registration state- ment with the Securities Exchange Commission (SEC). The Registration statement formally known as an S-1 is the issuer’s full disclosure document for the Government. The registration statement must contain detailed information relating to the issuer’s operations and financial condition and must include:

  • A balance sheet dated within 90 days of the filing of the registration statement.
  • Profit and loss statements for the last 3 years
  • Company’s capitalization
  • Use of proceeds
  • Shareholders owning more than 10% of the company’s securities
  • Biographical information on the Officers and Directors

The registration statement will be under review by the SEC for a minimum of 20 days. During this time, known as the “cooling off” period, no sales of securities may take place. If the SEC requires additional information regarding the offering, the SEC may issue a deficiency letter or a stop order that will extend the cooling off period beyond the original 20 days. The cooling off period will continue until the SEC has received all of the information it had requested. A Registered Representative may only begin to discuss the potential offering with customers after the filing date.



The Prospectus

Related Articles
  1. Financial Advisor

    Series 6 Exam Prep: What Is A Security?

    Before you take the series 6, you need to understand what a security is as defined by the exam.
  2. Financial Advisor

    Succeeding At The Series 63 Exam

    Your career as a securities agent begins with this test. We'll show you how to score high.
  3. Personal Finance

    Prepare For Your CFA Exams

    Find out how to get yourself ready for these lengthy and often daunting exams.
  4. Personal Finance

    How to Ace the CFA Level I Exam

    Prepare to ace the CFA Level 1 exam by studying systematically.
  5. Financial Advisor

    Who Needs to Take the Series 65?

    Most states require individuals to pass the Series 65 exam in order to act as investment advisors.
  6. Financial Advisor

    Understanding Series 63

    Series 63 is a securities license that entitles the holder to sell securities in a particular state.
  7. Personal Finance

    Becoming A Chartered Market Technician

    The CMT certification involves three tough exams. Find out what you need to do in order to pass.
  8. Financial Advisor

    The Basics of Financial Securities Licenses

    The Financial Industry Regulatory Authority (FINRA) offers several licenses that correspond to specific businesses or investments.
  9. Financial Advisor

    Tips on Passing the CFA Level I on Your First Attempt

    Obtain valuable tips and helpful study instructions that can help you pass the Level 1 Chartered Financial Analyst exam on your first attempt.
  10. Personal Finance

    What to Expect on the CFA Level I Exam

    The Level I exam for the Chartered Financial Analyst designation can be challenging. Here's what to expect.
Frequently Asked Questions
  1. What is the difference between yield and return?

    While both terms are often used to describe the performance of an investment, yield and return are not one and the same ...
  2. What are the Differences Among a Real Estate Agent, a broker and a Realtor?

    Learn how agents, realtors, and brokers are often considered the same, but in reality, these real estate positions have different ...
  3. What is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally ...
  4. Which is better, a fixed or variable rate loan?

    A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest ...
Trading Center