Series 65 Exempt securities, transactions, registration

Creative Financial Solutions (CFS) is a broker-dealer registered with the SEC. CFS has its principal and only office in State A. CFS also does business with clients in State B. Which of these clients would cause CFS to have to register in State B? A) 6 banks doing business in State B B) 4 retail clients residing in State B C) 1 mutual fund registered with the SEC D) 15 other broker-dealers

B) 4 retail clients residing in State B

With regard to the keeping of records, the Uniform Securities Act states that investment advisers must keep records for A) five years. B) three years. C) three years, the first two in the principal office of the adviser. D) five years, the first two in the principal office of the adviser.

D) five years, the first two in the principal office of the adviser

The Securities Act of 1933 regulates

offerings of new securities.

The Securities Act of 1934 regulates

the secondary market, persons (i.e., broker-dealers, associate members), and exchanges.

An investment adviser registered in 4 states would be permitted to enter into an advisory contract with all of the following prospective clients except A) a registered investment company. B) a university endowment fund. C) a single parent. D) a charitable foundation.

A) a registered investment company.

All of the following statements regarding registration of broker-dealers under the Uniform Securities Act are true except A) a successor firm is exempt from filing a consent to service of process until the renewal date. B) no broker-dealer can be required to meet financial requirements in excess of those of the SEC. C) broker-dealers with discretion over client accounts may be required to post a surety bond. D) a successor firm is exempt from paying registration fees until the renewal date.

A) a successor firm is exempt from filing a consent to service of process until the renewal date. When one firm succeeds another, no fees are due until the renewal date. However, the successor firm must file a consent to service of process at the time it registers.

Under state law, all of the following investment advisers are exempt from registration except A) advisers whose only clients are insurance companies. B) advisers solely to venture capital funds. C) advisers solely to private funds with less than $150 million in assets under management in the United States. D) foreign private advisers with no place of business in the United States and less than $25 million in assets under management.

A) advisers whose only clients are insurance companies. It is the federal law, the Investment Advisers Act of 1940, that exempts investment advisers from registration if their only clients are insurance companies. State law does not have that exemption.

A state-registered investment adviser organized as a corporation is required to preserve a copy of its articles of incorporation A) for three years after the termination of the enterprise. B) for five years after the end of the fiscal year in which the most recent entry was made. C) where they are easily accessible for two years in the firm's principal office. D) for three years after the end of the fiscal year in which the most recent entry was made

A) for three years after the termination of the enterprise.

If Somerville Discount Securities has its principal office in New Jersey and recently registered a branch office in Minnesota, which of the following statements is true? A) Each agent must be registered in the appropriate state before soliciting or taking orders. B) Agents working in the branch office that are licensed only in Minnesota may take unsolicited orders from New Jersey residents. C) Agents working in the principal office that are licensed only in New Jersey may take unsolicited orders from Minnesota residents. D) Each agent is automatically registered in both states.

Agents must be registered in every state in which they do business. An agent is not automatically registered in a state just because his employer is registered in that state.

Under current regulations, registration with the SEC is optional for all of the following investment advisers except A) Midwestern Asset Managers, LLC, with $53 million in AUM, required to register in 17 states B) CEF Investment Managers, LTD., a partnership managing a small, registered, closed-end investment company traded on the OTCQB. C) Employee Benefit Specialists, Inc., a pension consultant with $225 million in AUM. D) Grand Visions Advisers, a sole proprietorship with $104 million in AUM

B) CEF Investment Managers, LTD., a partnership managing a small, registered, closed-end investment company traded on the OTCQB. Currently, registration with the SEC is mandatory (not optional) for any investment adviser managing a registered investment company (open- or closed-end)

The Investment Advisers Act of 1940 excludes from the definition of "investment adviser" persons whose advice: relates solely to municipal issues. relates solely to issues issued by or guaranteed by the U.S. Treasury. is solely incidental to their professional practice as an aeronautical engineer. is limited to insurance companies only. A) I, II, III, and IV. B) II and III. C) III and IV. D) I, II, and IV.

B) II and III. Among the exclusions from the definition of" investment adviser "under both state and federal regulations is the case where certain professionals, including engineers, render the advice in a manner solely incidental to the practice of their professions. Unique to the federal law is the exclusion granted to those persons whose advice deals exclusively with federal government issued or guaranteed issues. Advice to solely insurance companies qualifies one for an exemption from registration, but does not exclude the person from the definition of IA.

Who of the following is not exempt from registration as an investment adviser under the Investment Advisers Act of 1940? A) An adviser whose only office is in State G and who deals only with State G residents, none of whom is a private fund, and does not deal in securities listed on any national securities exchange B) An adviser whose clientele consists solely of insurance companies C) An adviser, with total AUM of $125 million, specializing in stocks listed on the New York Stock Exchange, whose only place of business is in State F and whose only clients are 110 State F resident individuals D) An adviser to seven private funds with total assets under management in the United States of $125 million

C) An adviser, with total AUM of $125 million, specializing in stocks listed on the New York Stock Exchange, whose only place of business is in State F and whose only clients are 110 State F resident individuals The intrastate exemption has no numerical limitation, but all of the clients must be residents of the state and none of the clients can be private funds. However, no advice may be given on securities traded on a national stock exchange, and that is what causes this State F adviser to lose the exemption.

One of the terms defined in the Uniform Securities Act is broker-dealer. Which of the following are not included in that definition? An individual employed by a corporate entity to open new customer accounts for the purpose of trading securities A business entity seeking to raise additional capital using the regulated securities markets A person whose primary function is buying securities for his own account and for the accounts of others A person whose primary function is providing advice on what assets belong in clients' investment portfolios A) II and III B) I, II, III, and IV C) III and IV D) I, II, and IV

D) I, II, and IV

Washington, Adams, and Jefferson, Inc., (WAJI) is an investment adviser whose principal and only office is in Alexandria, VA. WAJI's sole business is advising institutional investors. Rutherford Buchanan is employed by the firm in the main office and has the responsibility of servicing the firm's bank and insurance company clients. Which of the following statements is correct regarding Rutherford's licensing requirements? A) Rutherford is exempt from registration because he has fewer than six retail clients. B) Rutherford is exempt from registration because his only clients are institutions. C) Rutherford cannot register as an IAR of WAJI because providing advice exclusively to institutions exempts the firm from registration. D) Rutherford must register as an IAR of WAJI with the State of Virginia.

D) Rutherford must register as an IAR of WAJI with the State of Virginia Regardless of whom the clients are, Rutherford has a place of business in Virginia and that requires registration with the Administrator as an IAR. If WAJI does business in other states where it does not have a place of business, it is exempt from registration because the only clients are institutions. If WAJI is not registered in the state, Rutherford can't register as their IAR. The de minimis exemption for fewer than six retail clients only applies when there is no place of business in the state.

Under all of the following circumstances, the USA requires investment advisers with no place of business in the state to register except A) when an adviser has maintained assets of $100 million or more for 7 out of the last 10 years. B) when an adviser only provides investment advice to 401(k) plans with assets of $250,000 or more. C) when an adviser with numerous clients in the state has not been subject to disciplinary action within any state within the last 10 years. D) when an adviser only provides advice to registered investment companies.

D) when an adviser only provides advice to registered investment companies.

Which of the following must register as an agent? A) An employee of the Fed whose job is selling Treasury bonds to the public B) An individual representing a broker-dealer who sells commercial paper C) An individual who is paid a commission to sell certificates of deposit for ABC National Bank D) An individual who sells commercial paper for ABC National Bank

b