Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What is the jurisdiction of the SEC?

1. Insurance regulation

2. Foreign exchange regulation

3. Broker and dealer regulation

4. Real estate regulation

The correct answer is: Broker and dealer regulation

The jurisdiction of the Securities and Exchange Commission (SEC) primarily covers the regulation of broker-dealers, investment advisors, and the securities markets within the United States. This includes overseeing the activities of entities that trade securities, ensuring compliance with applicable laws and regulations, and protecting investors from fraudulent practices. The SEC enforces securities laws, which are designed to maintain fair, orderly, and efficient markets. Understanding this jurisdiction is essential, as it highlights the SEC's role in maintaining market integrity and investor confidence. The focus on broker and dealer regulation encompasses not only the registration and regulation of these financial intermediaries but also the enforcement of conduct standards, which are critical for a well-functioning capital market. The other areas mentioned, such as insurance regulation, foreign exchange regulation, and real estate regulation, fall under the purview of different regulatory bodies, such as state insurance departments, the U.S. Department of the Treasury for currency regulation, and various state and federal agencies for real estate. Recognizing the specific domain of the SEC helps clarify the broader regulatory landscape and the specialization of different agencies in overseeing financial markets and products.