SIE (Securities Industry Essentials) Practice Exam 2026 - Free SIE Practice Questions and Study Guide

In the context of contributions by employees of broker-dealers to candidates for public office, the Securities and Exchange Commission (SEC) has established specific rules to prevent conflicts of interest and maintain the integrity of the municipal securities business.

When an employee of a broker-dealer wishes to contribute to a political campaign, particularly in municipal securities, there are limits to how much they can donate in order to avoid any potential influence over the firm's business activities in that area. Specifically, under the MSRB (Municipal Securities Rulemaking Board) rules, an individual associated with a broker-dealer may only contribute up to $250 per election to a candidate for municipal office to ensure that their contributions do not materially affect the broker-dealer's municipal securities activities.

However, the limit for contributions of employees of a broker-dealer to candidates for state and local offices, as per the regulations, is capped at $250 for each election. It is important to note that if the mayoral candidate is running for reelection, this limit applies to each election cycle.

In this scenario, the correct answer indicates that an employee of Broker-dealer ABC can contribute $50, but this value actually represents an interpretation of additional permissible contributions over and above an existing contribution made by another