Materiales de Estudio

Every question on the Series 6 sits on top of a legal skeleton built in the 1930s and 1940s. You do not need to be a lawyer, but you must know which law does what, who enforces it, and where a mutual fund or variable contract fits in. The exam loves questions that hand you a scenario and ask "which act governs this?" or "who has jurisdiction here?" This chapter gives you the map. Because the SIE is a co-requisite, some of this overlaps SIE material — here we anchor it specifically to the products a Series 6 representative sells.

The four foundational laws

Think of the federal securities laws as a timeline that each solved the problem of the moment.

The Securities Act of 1933 — the "paper" act (issuance). After the 1929 crash, Congress decided the cure for bad securities was disclosure: before a new security is sold to the public, the issuer must register it with the SEC and deliver a prospectus to buyers. The 1933 Act governs the primary market — the issuance of new securities. For a Series 6 rep this is the single most important act, because mutual fund shares and variable contracts are continuously offered new securities. A mutual fund is always issuing new shares, so every mutual fund purchase is a primary-market transaction requiring a prospectus. The 1933 Act is about full and fair disclosure; it does not mean the SEC approves or guarantees the security — the exam tests that the SEC never approves or endorses any security.

The Securities Exchange Act of 1934 — the "people and places" act (trading). The 1934 Act governs the secondary market (trading among investors), and — critically — it created the SEC and set up the regulation of the industry: broker-dealers, registered representatives, exchanges, and self-regulatory organizations. Antifraud rules, registration of broker-dealers and their reps (Form U4), and the concept of a self-regulatory organization all trace to the 1934 Act.

The Investment Company Act of 1940 — the "product" act (funds). This is the act that defines and regulates investment companies — the pooled vehicles that are the Series 6 product set. It classifies investment companies into three types (face-amount certificate companies, unit investment trusts, and management companies), sets rules for how a fund is organized and governed (the board, the advisory contract, the custodian), forbids certain conflicts, and requires a fund to register. When a question is about how a mutual fund is structured — its board, its diversification, its ability to charge a 12b-1 fee — the governing law is the 1940 Act. Chapter 2 is devoted to it.

The Investment Advisers Act of 1940 — the "advice for a fee" act. This act regulates people and firms in the business of giving investment advice for compensation. For Series 6 purposes, know that a mutual fund's investment adviser (the firm that manages the portfolio) is regulated here, and that giving advice for a separate fee can trigger adviser registration. A registered representative selling funds for commissions is generally not acting as an investment adviser — but the distinction (transaction-based commission vs. ongoing advisory fee) is testable.

Who's who: the regulators

• SEC (Securities and Exchange Commission) — the federal government agency, created by the 1934 Act. It is the top of the pyramid: it writes and enforces the federal securities rules, oversees the SROs, and administers Reg BI. The SEC does not guarantee or approve securities.
• FINRA (Financial Industry Regulatory Authority) — the self-regulatory organization (SRO) for broker-dealers. FINRA is not a government agency; it is a member organization that writes conduct rules (the FINRA Rulebook), licenses representatives (it owns the Series 6, Series 7, and SIE), examines member firms, and disciplines them, under SEC oversight. When you take the Series 6, you are taking a FINRA qualification exam.
• MSRB (Municipal Securities Rulemaking Board) — writes rules for the municipal securities market. It is relevant to Series 6 because 529 plans and ABLE accounts are "municipal fund securities" and fall under MSRB rules (Chapter 8). The MSRB writes rules but does not enforce them itself — enforcement for broker-dealers is done by FINRA and the SEC.
• State securities regulators ("Blue-Sky," under the Uniform Securities Act) — states also register securities and license reps within their borders. The Series 63 or Series 66 is the state-law exam that usually accompanies the Series 6; the state-law fine print is tested lightly on the 6 itself.

Where the Series 6 products sit

Here is the mental model that answers most "which act?" questions:

The variable-contract row is the one the exam loves: a variable annuity is a dual product — regulated as a security (so it needs a prospectus and a securities license) and as insurance (so the rep also needs a state insurance license, and the insurer's general account and guarantees are state-regulated). Fixed annuities, by contrast, are insurance only, not securities — no prospectus, no securities license.

### Key facts & numbers — Chapter 1 - 1933 Act = new issues / prospectus / primary market. Every mutual fund purchase is a new-issue (primary) transaction → prospectus required. - 1934 Act = created the SEC; regulates trading, broker-dealers, and reps (Form U4). - Investment Company Act of 1940 = defines & regulates investment companies (the fund product itself — board, diversification, 12b-1, advisory contract). - Investment Advisers Act of 1940 = advice for compensation. - SEC = federal agency (government). FINRA = SRO (not government); owns the Series 6. MSRB = writes municipal (529/ABLE) rules; does not enforce. - The SEC never approves, endorses, or guarantees a security — registration = disclosure only. Saying otherwise is a prohibited representation. - Variable annuity/variable life = security and insurance → needs a prospectus and a state insurance license. Fixed annuity = insurance only, not a security. - Series 6 requires firm sponsorship (Form U4) and fingerprinting; SIE does not.

Worked example — "which act, which regulator?"

Scenario. A customer buys 200 shares of the Growth Fund, an open-end mutual fund, directly from the fund's distributor. Three questions the exam might attach:

1. Is this a primary or secondary market transaction? Primary. An open-end fund continuously issues new shares; the customer is buying newly issued shares from the fund, not from another investor. Therefore —
2. What document must be delivered, and under which act? A prospectus, under the Securities Act of 1933, because this is the sale of a new issue.
3. If a dispute later arises about whether the fund's board had enough independent directors, which law governs that? The Investment Company Act of 1940 — board composition is a structure question, not an offering question.

Notice how one scenario touches three different laws depending on what the question is really asking: the sale/disclosure (1933), the structure of the fund (1940), and — if the customer had instead sold shares to another investor on an exchange, which a closed-end fund allows — the secondary-market trading (1934).

Named exam traps

• "The SEC approved this fund, so it's safe." Always wrong. SEC registration is disclosure, not approval or a safety guarantee. Telling a customer the SEC approved or endorsed the security is a prohibited practice.
• Confusing 1933 vs. 1934. Mnemonic: "'33 = issue (one number, one event: the sale); '34 = the floor" (the ongoing trading, the SEC, the people). Mutual-fund purchases are a '33 event (new issue), even though the customer feels like they're just "buying."
• FINRA is not a government agency. It is an SRO. The SEC is the government agency. A question that calls FINRA "a federal agency" is wrong.
• MSRB writes but doesn't enforce. For a 529 sold by a broker-dealer, FINRA/SEC handle enforcement of the MSRB's rules.
• Fixed vs. variable annuity licensing. A fixed annuity is not a security — a rep with only an insurance license can sell it; a variable annuity also requires a securities registration (Series 6/7) and a prospectus. Mixing these up is a classic distractor.
• Series 6 vs. Series 7 scope. The Series 6 is a limited license: packaged products (funds, variable contracts, UITs, closed-end funds at IPO, 529s). If an answer choice involves listed options, buying stock on margin, or trading an individual corporate bond in the secondary market, it is outside a Series 6 rep's authority — a favorite wrong-scope trap.