Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

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Which federal law governs the registration of RRs and their firms?

The Securities Exchange Act of 1934
The Investment Advisors Act of 1940
The Securities Act of 1933
The Trust Indenture Act of 1939

The correct answer is: The Securities Exchange Act of 1934

The Securities Exchange Act of 1934 governs the registration of registered representatives (RRs) and their firms. This Act established the framework for regulating the securities industry, including the registration of broker-dealers and their representatives, and the oversight of the financial markets to ensure fair practices. The 1934 Act is crucial because it created the Securities and Exchange Commission (SEC), which is responsible for enforcing federal securities laws, regulating the securities industry, and protecting investors. Under this Act, the registration requirements for broker-dealers and their representatives ensure that these individuals meet certain standards and qualifications, promoting integrity in the financial markets. The other acts mentioned have different focuses; for example, the Securities Act of 1933 primarily deals with the registration of securities for public offerings to ensure transparency and investor protection at the time of sale. The Investment Advisors Act of 1940 regulates investment advisors' conduct but does not address the registration of broker-dealers. The Trust Indenture Act of 1939 pertains to debt securities and ensures that indentures meet certain requirements, but it does not concern the registration of representatives or firms.