Section 3: Trading, Customer Accounts, and Prohibited Activities, Practice Questions
Section 3 (Trading, Customer Accounts, and Prohibited Activities) is 31% of the SIE® exam: 23 of the 75 scored questions. It’s also the section where stale prep hurts most, because it owns the facts that changed: T+1 settlement rewrote the date arithmetic in 2024, and the dividend-date sequence moved with it. Our sixteen sets here, 324 questions, are verified against the current rules, and the explanations say so, source by source. Start with a mixed set at section scope:
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The sixteen Section 3 topics
Trading mechanics:
Order Types: market, limit, stop, stop-limit, and exactly where each triggers
Quotes and Bid-Ask: reading quotes, spreads, firm vs. subject
Trading Capacity: agency vs. principal and how each gets paid
Long and Short Positions: short-sale mechanics and the unlimited-risk side
Settlement: T+1 for regular way, the exceptions, and what “good delivery” means
Corporate Actions: splits, reverse splits, tenders, and how positions adjust
Dividends and Returns: the declaration-ex-record-payable sequence as T+1 reshaped it
Customer accounts:
Account Types: cash vs. margin, options approval, discretion
Account Registrations: individual, JTWROS vs. tenants in common, custodial, trust
Retirement Accounts: traditional vs. Roth, employer plans, early-withdrawal rules
Conduct and compliance:
AML: placement, layering, integration; SARs, CTRs, and the dollar thresholds
Books and Records and Reg S-P: retention periods and customer privacy
Communications: the three categories and who must approve what
Insider Trading: material nonpublic information, tippers and tippees, penalties
Reg BI and Suitability: best interest vs. suitability and when each applies
Prohibited Activities: the exam’s biggest scenario block: churning, front-running, marking the close, guarantees, selling away
How to attack this section
Two clusters carry the section. The trading-mechanics run (orders through dividends) rewards doing the sets in sequence, because settlement dates feed the dividend questions and order behavior feeds the prohibited-practices scenarios. The conduct cluster is scenario-heavy: Prohibited Activities alone is 46 questions, and it borrows vocabulary from everything before it. Save it for last and it grades your whole Section 3. The SIE study guide pairs a chapter with each cluster if you want the rules laid out before the drilling starts.
Products feed the scenarios here, so pair this section with Section 2: Understanding Products and Their Risks, together they’re 75% of your score. The conduct rules continue into Section 4: Overview of the Regulatory Framework, where the registration side lives. Or step back to all SIE practice questions by topic and the free practice exam for the full mix.
