Securities Industry Essentials (SIE) ExamKnowledge of Capital MarketsHard
A financial institution is acting as a custodian for client assets, providing safekeeping services and processing transactions. Under which regulatory body would this institution primarily fall for its general banking operations?
- ASecurities and Exchange Commission (SEC)
- BOffice of the Comptroller of the Currency (OCC)
- CFinancial Industry Regulatory Authority (FINRA)
- DFederal Deposit Insurance Corporation (FDIC)
Show answer & explanationAnswer & explanation
Correct answer: B. Office of the Comptroller of the Currency (OCC)
While the SEC and FINRA regulate securities activities, the Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises all national banks and federal savings associations, which includes their general banking and custodial operations.
Why the other options are wrong
- A. The SEC regulates securities markets and participants, not general banking operations.
- C. FINRA is a self-regulatory organization (SRO) overseeing broker-dealers and their registered representatives.
- D. The FDIC insures deposits and supervises state-chartered banks not members of the Federal Reserve System.
Office of the Comptroller of the Currency (OCC)
The OCC charters, regulates, and supervises all national banks and federal savings associations.
- Independent bureau of the U.S. Department of the Treasury.
- Ensures national banks and federal savings associations operate safely and soundly.
- Promotes fair access to financial services and compliance with laws.
Memory trick: OCC: 'Our Custodians Control' national banks.