SIE - Practice Exam question

@Justin - HI Justin, I came across the below question in my practice test, I am confused about the correct answer listed in the image below, can you please elaborate on this when you get a chance?


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Hi @Dual_pink_thrush - I can answer this for you.

As we discuss in The regulators chapter, a statutory disqualification is any event in an applicant’s past that would prevent them from being registered (and effectively working in the securities industry). These include:

  • Conviction of any felony in the last 10 years
  • Conviction of a securities-related misdemeanor in the last 10 years
  • Suspension or revocation of registration from another securities regulator (e.g. SEC) or SRO (e.g. MSRB)
  • Proof of false statements made to securities regulators or SROs

The prompt asks for the one answer that does not involve a statutory disqualification. The answer is a drug-related felony arrest. While arrests must be reported on Form U-4, only convictions are considered to be statutory disqualifications. A person may be mistakenly arrested, then the charges are dropped, or they are found not guilty in court.

All of the other answers are statutory disqualifications. Two are felony convictions within the last 10 years and the other is a suspension due to an MSRB rule violation.

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Thank you , Make sense now

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