Series 63 Practice
To be registered as a broker-dealer, the Administrator typically requires the posting of a surety bond in the amount of: A. $5,000 B. $10,000 C. $25,000 D. $50,000
B Under the Uniform Securities Act, the Administrator typically requires the posting of a $10,000 surety bond to be registered as a broker-dealer (though each state administrator can set this amount)
An agent persuades a client with a conservative risk tolerance to invest in speculative securities. On settlement date, he tells the client to sell those investments and use the proceeds to buy other speculative securities. This pattern continues for several months. This is called: A. selling away B. excessive trading C. front running D. free riding and withholding
B There are really 2 violation her- unsuitable recommendations and churning (excessive trading) of the customer account. Since only excessive trading is offered as a choice it is the best answer
which form must be signed by the customer in order to open a margin account? A. New account form B. Hypothecation Agreement C. Loan consent agreement D. All of the Above
B. There is no customer signature required on a new account form- this allows cash accounts to be opened over the phone, if a firm so desires. However a customer signature is required on the hypothecation agreement- this is the legal pledge of securities in the account as collateral for the margin loan from the broker dealer to the customer.
Which of the following statements are TRUE regarding customer funds or securities and broker-dealer's funds or securities? I Broker-dealers are allowed to commingle customer funds or securities with their own funds or securities positions II Broker-dealers are prohibited from commingling customer funds or securities with their own funds or securities positions III An agent can take customer securities into his or her own possession to deliver to the broker-dealer IV An agent cannot take customer securities into his or her possession to deliver to the broker-dealer A. I and III B. I and IV C. II and III D. II and IV
D agents and broker dealers are prohibited from commingling customer funds and securities with their own funds and securities. The agent cannot take these customers securities into his possession- this a violation. He can have the customer send them directly to the broker dealer for delivery on the sale however
An agent of a broker-dealer puts up a website that promotes the benefits of dollar cost averaging, including the caveat that it is suitable for investors only if they can maintain their periodic payments regardless of economic conditions and that it requires a long-term investment time horizon. If the website is viewed by an individual in another State where both the broker-dealer and agent are not registered, which of the following disclosures are required on the site in order not to be in violation of the Uniform Securities Act in that State? I "The broker-dealer or agent may only transact business in the State if registered in the State or if exempted or excluded from registration" II "Follow ups or individualized responses to persons in the State that involve either effecting or attempting to effect transactions in securities will not be made absent compliance with State registration requirements or an applicable exemption or exclusion" III "The services being offered do not represent an offer to sell securities or a solicitation of an offer to buy the securities in the State unless the subject securities are registered or are subject to an applicable exclusion" IV "The Securities and Exchange Commission has not approved, nor has it disapproved of offering made in this advertisement" A. I and II only B. II and IV only C. I, II, III D. All of them
A
All of the following statements are true about surety bond coverage required for a registration application EXCEPT: A. if there is a surety bond requirement, the Administrator is not permitted to accept cash or securities as a substitute B. in lieu of posting a surety bond, the Administrator must accept a deposit of cash in the appropriate amount C. in lieu of posting a surety bond, the Administrator must accept a deposit of securities in the appropriate amount D. the Administrator is permitted to waive the surety bond requirement for registrants whose net capital or net worth exceeds a stated dollar amount
A It is untrue that if there is a surety bond requirement, the Administrator is not permitted to accept cash or securities as a substitute. It is true that, in lieu of posting a surety bond, the Administrator must accept a deposit of cash in the appropriate amount, or a deposit of securities in the appropriate amount. The Administrator is permitted to waive the surety bond requirement for registrants whose net capital or net worth exceeds a stated dollar amount.
A customer buys 1,000 shares of XYZZ stock in a margin account and pays the required 50% margin on settlement date. The customer requests that the broker-dealer transfer the securities into the customer's name and ship them to his home address. Which statement is TRUE? A. This request cannot be honored because the securities must be paid for, in full, to process a transfer and ship request B. This request cannot be honored because all customer securities must be held in a depository C. This request cannot be honored unless the customer makes it in writing D. This request should be honored as given
A Securities held in margin accounts cannot be transferred and shipped - they are kept in "street" name as collateral for the customer margin loan.The customer must pay off the loan on the securities in order for the brokerage firm to transfer them into his or her name and ship them.There is no requirement for such a request to be made in writing.
Making an intentional omission of material fact when recommending a security to a customer would be considered fraudulent if: A. a reasonable man would attach decision making importance to the omitted information B. the information was not available to the general public at the time that the recommendation was made C. the maker of the recommendation did not perform due diligence to determine the relevancy of the omitted information D. under the circumstances, the maker of the recommendation did not, and could not, have known of the importance of the omitted information to the buyer of the securities
A reasonable man would attach decision making importance to the omitted information
An investment adviser charges a fee equal to the greater of 1% of assets annually or $1,000. When examining the investment adviser, the Administrator would review this policy in relation to: A. account with balances under $20,000 B. accounts with balances over $20,000,000 C. accounts that give the adviser discretion D. new accounts as compared to existing accounts
A. NASSA rules prohibit investment advisers from charging "unreasonable fees," without actually state what those are. A 1% fee pretty reasonable- there are advisers that charge 2% or even 3% annual fees. The flat $1,000 fee also seems pretty reasonable, however a $1,000 annual fee charged on an account with $20,000 of assets amounts to a 5% annual fee-- which is high. The question ignores the fact that most advisers with such a fee structure will not accept an account unless it has a minimum asset size-- typically $50,000 or so of assets
All of the following information must be included on a customer conformation EXCEPT: A. whether the transaction was solicited or unsolicited B. Whether a payment for order flow was made C. the customer name and account number D. the price of execution
A. Whether a trade is solicited or not is required on an order ticket, but not on trade confirmation. The amount of commission charged and if a payment was made for order flow must be disclosed. Finally, the customer name, account number, sizes of the trade, and price of execution must all be on the confirmation
An investment adviser has a soft dollar arrangement with DEF Brokerage Company. An investment adviser representative brings a big new account to the RIA and the account owner tells the IAR to direct 50% of his trades to XYZ Brokerage Company. If execution is not an issue, then the IAR should: A. send 50% of the customer's trades to the DEF Brokerage Company B. send 50% of the customer's trades to the XYZ Brokerage Company C. send 25% of the customer's trades to the DEF Brokerage Company and 25% of the customer's trades to the XYZ Brokerage Company D. close the customer's account because of the conflict of interest between the DEF Brokerage Company and the XYZ Brokerage Company
B Since "execution is not an issue, we must presume that the quality of trade execution and cost of trade execution at XYZ brokers is as good as the received from DEF brokers. Since the customer wants 50% of his trades directed to XYZ brokers instead of to DEF brokers (which has the "soft dollar" arrangement with the adviser), follow the customers instructions
An Investment Adviser falls below the minimum net capital required by the State on Monday. The IA must notify the Administrator no later than: A. Tuesday of that week B. Wednesday of that week C. Thursday of that week D. 10 business days after the event
B The NASSA model rule for investment adviser financial requirements states that "every adviser required to be registered in the state shall, by the close of business the next business day, notify the administrator if such investment advisers net worth is less than the minimum required. " after transmitting such notice, each investment adviser shale file, by the close of business on the next business day, a report with the administrator of its financial condition, including a: - trial balance of all ledger accounts - statement of all client funds which are not segregated complication of the aggregate amount of client debit balances _Statement as to the number of customer accounts since this IA net capital fell below the minimum on Monday, notice to the administrator must be given on Tuesday and the report filed on Wednesday
An investment adviser is ready to open an account for a new customer. In the advisory contract, the adviser has included a clause that the customer has 48 hours to rescind the contract. The adviser gives the customer the brochure, takes payment from the customer, but forgets to have the customer sign the contract. Which statement is TRUE under NASAA rules? A. even though the customer did not sign the contract, he or she still has 48 hours to rescind the contract B. Event thought the customer did not sign the contract, he or she has 5 business days to rescind the contract C. the contract is null D. the contact is binding and the customer cannot rescind the contract
B. Under NASAA rules, the brochure is required to be delivered to clients no less than 48 hours prior to enter into a written or verbal contact to provide advisory services. As an alternative to the "2 day free look." the customer can be given he brochure at the time of contact signing, as long as the contract provides for a 5 business day period following signing where the customer can terminate without penalty. In this case, the customer was not given the brochure 48 hours prior to enter into the contact. By signing and giving the adviser a check, the customer has "entered into the contract" to buy the advisory services. So this customer has 5 business days under NASAA rules to rescind the contract
An investment adviser may be compensated with which of the following? I Wrap fees charged to customers for all services rendered by the adviser II Soft dollars paid by an executing broker to the adviser in return for trades sent to the broker by the adviser III 12b-1 fees paid by a mutual fund to the adviser based on annual net assets IV Commissions paid to an affiliated broker-dealer on trades recommended by the adviser A. I and II B. III and IV C. I, II and IV D. All of them
C
An investment adviser has obtained written discretion from a client. If the IA wishes to assign the advisory contract to a Sub-Adviser, which statement is TRUE? A) The transfer can be effected without notification to the client because the investment Advisor has written discretion from the client B) The transfer is not permitted unless the customer signs a new advisory contract with the Sub-Adviser C) The transfer can be effected if the client is notified in writing and gives written consent to the transfer. D) The transfer is not permitted unless the customer signs a new advisory contract with the sub-adviser
C Just because a customer has given an investment adviser discretionary authority in writing does not mean that this gives the IA the power to assign the customers contract. Discretionary authority only gives the IA the power to make investment decisions in the account without needing the customers advance consent to each transaction. To assign the contract to a different adviser requires that the customer signature consenting to the transfer
ACME Securities is a registered broker-dealer in State A. ACME is soliciting individuals to work for the firm in their spare time, from a home office. For selling ACME's products to customers, these individuals will be paid 25% of commissions generated. Since these individuals are not working in ACME's office, ACME has classified them as independent contractors. Which statement is TRUE? A. These individuals are not required to be registered as representatives in State A because they are not ACME employees B. These individuals must register themselves as representatives in State A because they are not ACME employees C. These individuals must be registered as representatives in State A by ACME Securities D. These individuals only need to be registered in State A by ACME if they become full-time representatives
C These individuals must be registered as representatives in State A by ACME Securities
An Investment Adviser is set up as a sole proprietorship. The owner has hired an Investment Adviser Representative (IAR) to market the firm to potential clients. The most important consideration in the firm's Business Continuity and Succession Plan would be: A. the identification of the business model of the Investment Adviser including size of the firm, types of services provided, and the number of locations B. making provision for the Investment Adviser Representative to notify the clients of the Investment Adviser in the event of business interruption caused by the owner's death or unexpected permanent incapacitation C. making provision for the IAR to contact clients to get their permission to assign advisory contracts to a 3rd party in the event that the owner dies or is unexpectedly unavailable D. providing for an appropriate emergency contact person when the investment adviser representative is away on vacation
C When an Investment Advisor is formed as a sole proprietorship, the client's legal relationship is with the sole proprietor. With the death or permanent disability of the sole proprietor, the sole proprietorship is terminated as a legal entity, as would any advisory contracts. The IA must have a succession plan that immediately addresses this issue if the sole proprietor becomes unavailable. Otherwise, the clients would have no one to manage their funds held at the defunct IA because the existing investment advisory contracts are now void.
State registration of non-exempt securities is a requirement of the : A. Securities Act of 1933 B. Securities exchange act of 1934 C. Blue Sky Laws D. Uniform transfer of securities act
C state blue sky laws actually predate the federal securities acts, and require registration of securities offered in each state(unless and exemption is available). In addition, blue sky laws require the registration of broker dealer, investment advisers and their agents in each state (unless an exemption is available)
An investment adviser is opening that day's mail and receives a check from a customer made out to the "Jones Cleaning Service" - the check was mailed in error to the adviser. The same day, the investment adviser mails the check back to Jones Cleaning Service. Under NASAA rules, the investment adviser: I is deemed to have taken custody of the customer's funds II has not taken custody of the customer's funds III must keep a record of the check received IV is not required to keep a record of the check received A. I and III B. I and IV C. II and III D. II and IV
C If a client inadvertently gives securities or funds to an investment adviser, as long as they are returned within 3 business days, then the adviser has NOT taken custody.If the adviser inadvertently receives a check made out to a third party (as is the case here), as long as the adviser mails the check to the third party within 3 business days, then the adviser has NOT taken custody. Regardless, the adviser must keep a record of the receipt of the check.
An agents registration becomes effective: A. immediately when filed in the sate B. 10 days after filing in the state C. 30 days after filing in the state D. 90 days after filing in the state
C an agents registration becomes effective after 30 days have passed since meeting all registration filing and qualification requirements
A customer invests $100,000 and opens a discretionary account with an agent specifying an investment objective of long-term growth. The agent decides that it is best to diversify and spreads the monies among a number of income funds within the same fund family. Which statement is TRUE? A. the agent acted prudently as it is best to diversify a portfolio to reduce risk B. the agent acted prudently as long as the manager approves of the transaction C. the agent acted inappropriately and fraudulently D. the agents actions are acceptable le if there is a profit on the investments made
C the customer specified an investment objective of long term growth, not income. if the agent places the funds in a number of income, funds the action is inappropriate and fraudulent
Under the Uniform Securities Act, an investment adviser is permitted to take physical custody of a customers monies or securities: A. under no circumstances B. only if the Administrator does not prohibit this by rule and the adviser has notified the customer that he has, or will take, custody C. only if the Administrator does not prohibit this by rule and the adviser notifies the Administrator that he has, or will take, custody D. if the Adviser is properly registered with the State Administrator
C. An investment adviser is permitted to take physical custody of a customer monies or securities only if the Administrator does not prohibit this by rule, and if the adviser notifies the Administrator that he has, or will take, custody. In addition , the customer must be sent a quarterly statement of account by the adviser
An investment adviser's office located along the coast of Texas is severely damaged in a hurricane. The firm's personnel cannot come to the office and they find that they cannot access the firm's business continuity plan remotely. Some of the personnel working remotely have access to client phone numbers kept on their own computers and use this to call clients and let them know the details of the business disruption. Is this a violation of NASAA rules? A. No, because natural disasters do not come under NASAA's Business Continuity Plan Rule B. No, because customers can be called and given the details of the business disruption C. Yes, because the rule requires that alternate means of accessing records and communicating with customers be provided D. Yes, because the rule requires that a second physical back-up location be available to be put into service in the event of a severe business disruption C. Yes, because the rule requires that alternate means of accessing records and communicating with customers be provided
C. One of the key points about NASAA's "Business Continuity Plan" requirement is that it is mainly focused on business disruptions due to natural disasters. It requires the firm to keep records accessible in an alternate place (typically now in the "cloud") and provide alternate means of accessing these records and communicating with clients. In this example, because records cannot be accessed, this is a violation of the NASAA BCP rule.
A hedge clause included in an advisory contract that permits the adviser to transfer the contract to another adviser without needing the customers approval is: A. permitted under the uniform securities act B. permitted under the investment advisers act of 1940 C. a prohibited practice under NASAA rules D. Prohibited unless the transfer is in the best interests of the customer
C. The NASSA statement of policy on Unethical Business Practices states that it is unethical to enter into, extend or renew an advisory contract unless such contract is in writing and discloses that no assignment of such contract shall be made by the investment adviser without the consent of the other party to the contract." Putting a hedge clause in the contract that attempts to negate this rule is not permitted
Why would an investment advisory firm hire an internal auditor? A. to keep the books and records of the firm "current" as required under federal and NASSA rules B. to certify the firms financial reports C. to assess the firms internal control, procedures, and business continuity plan D. to assess the qualification of the firms accounting personnel
C. The purpose of an internal auditor is to review the firms internal controls and procedures, with the emphasis on risk reduction. Part of the internal audit is to assess the firms business continuity plan. The external auditor is hired to certify the firms financial statements, which is required for public companies under SEC rules
When must a Registered Investment Adviser (RIA) send a notice of change in ownership? A. To each client, when the RIA changes it business form from a sole proprietorship to a partnership B. To the State Administrator, when the RIA changes its business form from a sole proprietorship to a partnership C. To each client, when the RIA changes it business form from a partnership to a sole proprietorship D. To the State Administrator, when the RIA changes its business form from a partnership to a sole proprietorship
C. The rule on notifying clients of a change of ownership of an investment adviser only applies to investment adviser organized as partnerships. If there is a change in the majority of the partners (as would be collapsing a partnership into a sole proprietorship), then each client who has signed an advisory contract must be notified of the change. This is a requirement of NASAA rule 502(c) for State registered advisers and also is a requirement of the Investment Advisers Act of 1940 (for Federal Covered Advisers)
An investment adviser that claims that it is a "fee only" adviser could NOT be compensated based on: A. a percentage of assets under management B. a flat annual or hourly fee for all work performed C. 12b-1 fees paid by mutual funds D. a performance based fee for wealthy investors
C. Advisers that are "fee only" can charge hourly fees, fees based on a percentage of assets under management, and can charge performance fees - but only for wealthy investors (those with either at least $1,000,000 under management or a net worth of $2,000,000 as permitted under the Investment Advisers Act of 1940). An adviser that advertises itself as a "fee only" adviser cannot be compensated from the sale of products that it sells. It cannot charge commissions on transactions, nor can it receive 12b-1 fees, which are basically annual commissions paid by a mutual fund to the broker-dealer or advisory firm that placed the customer into the fund. In both of these cases, the adviser has an incentive to either actively trade the customer's account in order to receive higher commissions or to place the customer only in those mutual funds that will pay 12b-1 fees to the adviser. A "fee only" adviser is supposed to be completely unbiased in its selection of securities for the customer and the frequency with which it trades the customer's account.
An individual is being paid to sell securities and is being compensated on a commission basis. The commissions are being paid by both the broker-dealer and the issuer. This person is defined as a(n): A. agent of the issuer only B. agent of the broker-dealer only C. agent of both the issuer and the broker-dealer D. none of the above
C. agent of both the issuer and the broker-dealer
A Registered Investment Adviser that trades securities on the behalf of customers is required to keep a record of the transaction that includes all of the following information EXCEPT the name of the: A. Investment Adviser Representative (IAR) who placed the order B. broker-dealer to which the order was sent for execution C. person at the Investment Adviser who recommended the transaction D. agent at the broker-dealer who executed the transaction
D NASAA state that investment adviser order tickets must contain: - Name of the person at the IA who recommended the transaction - Name of the person who placed the order - date of order entry - Name of account for which order was entered - Name of broker dealer or bank to which the order was sent for execution - Whether the order was discretionary
AN investment adviser is registered in both stat A and state B, and has its principal office in State B. State A would be allowed to do all of the following EXCEPT: A. Review the investment advisers books and records in state A B. Review the investment advisers books and records in state B C. require advertising and sales literature to be filed in state A D. Require advertising and sales literature to be filed in state B
D State A has the authority to inspect the IA books and records, no matter where they are located, so State A can inspect the IA books and records in both state A and B. State a can require the filing of advertising and sales literature used in state A. It cannot require the filing of advertising and sales literature used in state B-- only state B can do this
If an adviser is suspicious about a customer's account activity and believes that there may be illegal activity, then the adviser: I must file a CTR report with FinCEN II must file an SAR report with FinCEN III in 15 days IV in 30 days A. I and III B. I and IV C. II and III D. II and IV
D. If an adviser is suspicious about a customer opening an account, then a "Suspicious Activities Report" must be filed with FinCEN (Financial Crimes Enforcement Network - part of the Department of Treasury) within 30 days. The customer cannot be told that the report is being filed.
If a customer of a broker-dealer fails to pay for a securities purchase by the 4th business day from trade date, the customer's account must be: A. restricted for 30 days B. frozen for 30 days C. restricted for 90 days D. frozen for 90 days
D. Frozen for 90 days. (Many firms call this "putting a CUF" on the account - with CUF standing for Cash Up Front.)
Under NASAA rules, within 120 days of fiscal year end, each customer must be sent an: A. brochure B. Updated brochure C. brochure and brochure supplement D. an updated brochure and brochure supplement
D. NASAA rules require that within 120 days of fiscal year end, the adviser must send each customer a revised brochure (form DV Part 2A) and brochure supplement (Form Adv Part 2B)
AN order ticket for the purchase of stock does NOT contain: A. quantity B. time that the order is placed C. fill price D. market price at the time that the order is placed
D. Order tickets do not contain the market price at the time of placement of the order
A stock in a customer account has been dropping rapidly in value. The investment adviser has attempted to contact the customer to advise her to sell the security, but the adviser is unable to reach that customer. The investment adviser is prohibited from placing the sell order unless the: A. adviser contacts the customer's spouse and gets permission to sell the stock B. adviser believes that selling the stock is in the customer's best interests C. customer approves the executed sell order 24 hours later D. customer had placed an existing sell order 1 year ago
D. There is no mention of the customer having given the adviser discretion to trade the account, so Choices B and C are incorrect. There is no mention of the customer giving the spouse a trading authorization over the account, so Choice A is incorrect. However, if the customer had previously placed a sell order (this would be a stop loss order) in the account, then the sell order would be filled once the stock falls to the stop price. Note that this would be a "GTC" - "Good-Til-Canceled" order. The order sits waiting to be executed. Note that the length of time is open-ended and that the order might have been placed 1 month ago, 6 months ago, 1 year ago, etc.
An agent of a broker-dealer is opening a new client account. The agent has completed the new account application and the suitability determination. The customer has an investment objective of safety of principal and income. The agent makes an initial recommendation of a conservative blue chip stock with a track record of paying a consistent cash dividend. The customer accepts the recommendation. When must the commission charged on the transaction be disclosed to the customer? A. At the time that the order is placed B. At the time when the order is filled C. At the time when the account is opening D. On the confirmation
D. There is no requirement to disclose the commission charged to customers at the time of the trade or at the time of account opening. The only requirement is that the commission be disclosed on the trade confirmation. Also remember that any commission charged must be "fair and reasonable."
All of the following information must be recorded on an order ticket EXCEPT: A. time of order receipt B. customer account name/number C.name of person entering the order D. time and date of execution
D. Time and date of execution only recorded on an order ticket if it is executed.- which may never happen! The name of the customer and account number must be recorded as well as an identifier of the person who prepared the order ticket. The order ticket must be stamped with time of order receipt, time of order execution (if it is executed) and time of order cancellation (if it is canceled)
All of the following information is required on an order ticket EXCEPT: A. time of order receipt B. time of order execution C. whether the trade was solicited or unsolicited D. whether the order was placed verbally or in writing
D. Time of order receipt is recorded on the order ticket, as is time of order execution. Both of these are required to permit regulators to be able to detect "front running" violations. They are also needed to resolve customer complaints about possible execution errors. The account name and or number must be on the order ticket. It must be recorded whether the trade was solicited or unsolicited. There is no requirement to record the manner in which the order was received
An investment adviser wishes to offer all of the medical professionals at a local hospital a reduced advisory fee in the hopes of attracting new assets to manage. Which statement is TRUE about an adviser offering discounted rates? A. The investment adviser is permitted to offer a discount to any potential customer in order to attract new business B. the investment adviser is not permitted to offer the discount unless the administrator is notified that a discount may be offered C. The investment adviser can offer the discount as long as charges to all of the investment advisers customer are fair and reasonable D. The investment adviser can offer the discount as long as the fact that non-medical professionals that are unaffiliated with the hospital pay a higher fee is disclosed in the Form ADV Part 2A
D. Investment advisers do not have to offer the same rates to all their customers - they are permitted to pursue group business by offering defined groups a discounted rate. However they must offer these discounts to all customers that qualify for the terms of the discount (in this case, they must be medical professionals at the hospital); and the adviser must disclose the existence and terms of the discounts in the Form ADV Part 2A ("the brochure") that is given to clients.
Under the provisions of the Uniform Securities Act, all of the following statements are true about an investment adviser's initial registration EXCEPT: A. if no denial order is in effect and no proceeding is pending, registration becomes effective at noon of the thirtieth day after an application is filed B. the Administrator may, by rule or order specify an earlier effective date than the thirtieth day after an application is filed C. the Administrator may, by order defer the effective date until noon of the thirtieth day after the filing of any amendment D. if no denial order is in effect and no proceeding is pending, the Administrator must give immediate effectiveness to the application if the registrant is transacting business in the state as a registered broker-dealer
D. The wording in the Uniform Securities Act is that: "If no denial order is in effect and no proceeding is pending, registration becomes effective at noon of the thirtieth day after an application is filed." It then goes on to say that: "The Administrator may by rule or order specify an earlier effective date and may by order defer the effective date until noon of the thirtieth day after the filing of any amendment." Choice D is a bunch of nonsense!
Registration by Coordination in a State would MOST likely be used for which securities offering? A. Mutual fund shares registered un the investment company act of 1940 B. secondary offering of a company that is NASDAQ listed C. An initial public offering made under a rule 147 intratstate exemption D. Initial public offering of an issue that will be quoted in the OTC pink market
D. AN IP of a security that will be quoted in the Pink OTC market cannot meet NASDAQ listing standards. It will be registered with the SEC. and since there will be an SEC filing, the easiest state registration method is to register the issue by coordination
All of the following are true regarding rules and orders of the administrator under the Uniform Securities Act EXCEPT: A. rules are general in applicability; orders apply to specific cases B. different penalties apply for violations of rules and orders than for violations of the Acts provisions C. the administrator may enter an order prior to conducting a hearing D. the administrator may make any rule order relating to the Act
The penalties for violations of the uniform securities acts provisions are the same as for violating a rule or order of an administrator that is applying the act. The administrator may make a rule or order applying to the act (the administrator can modify the acts provisions by making its own rules; and can enter suspension of revocation orders against registrants). The administrator can enter an order suspending or revoking a registration, prior to providing a hearing. The only requirement is that an opportunity for a hearing be provided to the person is the subject of the rule order
An Investment Adviser (IA) has its headquarters in State A. The IA has 4 natural clients in States B, C and D - all States where it does not have an office location. An Investment Adviser Representative (IAR) associated with the IA does most of her business in State A. To expand her business, the IAR holds a monthly seminar in State B, inviting interested individuals to attend. In which States must be IAR be registered? A. State A only B. State B only C. States A and B D. States A, B, C and D
c Because IAR is physically located in state A, she must be registered in state A. Because the IAR is regularly in state B soliciting customers, the IAR must be register in State B
