Unit 2

State, SEC

Remember that all Investment Advisor Representatives are registered with the ______ not the ______.

Consent to Service of Process

A permanent document submitted with the initial application for registration.

30

An agent may conduct business in a state in which he is not registered if an existing client is visiting in that state or if the client has moved to the state within the past _____days.

A

An individual who has passed the NASAA examination for registration as an investment adviser representative may begin soliciting advisory clients A) when informed by the investment adviser that the representative's registration is effective B) immediately C) when informed by the Administrator that the representative's registration is effective D) within 48 hours

an individual

An investment adviser representative is always

Administrator

An investment adviser representative of a federal covered investment adviser registers with the

Surety bond, 35,000

Any investment advisor that has discretionary authority or custody of client funds or securities OR requires substantial prepayment of fees (more than $500 6 or more months in advance) must disclose any financial condition that may impair ability to meet contractual commitments to its clients. State Administrators may also require advisors to post a _____________ OR maintain a minimum net worth of $__________

D

James Stillman is an investment adviser representative with Rock, Feller, and Standard (RFS), a covered adviser with its principal office in State O. Stillman works out of an office in State P and has 4 retail clients there. In addition, Stillman has 25 retail clients in State D, 6 retail clients in State M, and 1 retail client in State O. Stillman would be required to register as an investment adviser representative in A) States D and M. B) States P and O. C) States P, D, and M. D) State P.

Investment Company Act of 1940

Congressional legislation regulating companies that invest and reinvest in securities. The act requires an investment company engaged in interstate commerce to register with the SEC. Provides the definition of "Investment Company".

Trust Indenture Act of 1939

Federal law requiring all corporate bonds to be issued under an indenture agreement approved by the SEC and providing for the appointment of a qualified trustee free of conflict of interest with the issuer.

A

Howard Robard is an investment adviser representative with Hughes & Company, a state-registered investment adviser having its principal office in State O and offices in States P and D. Howard works out of an office in State P and has 4 retail clients there. In addition, Howard has 25 retail clients in State D, 6 retail clients in State M, and 1 retail client in State O. Howard would be required to register as an investment adviser representative in A) States P, D, and M. B) States P, D, M, and O. C) State P. D) States D and M.

December 31

State registration of any securities professional expires _______________ unless renewed.

T

T/F: The definition of investment adviser representative includes individuals who solicit for the firm's advisory business.

1

The Administrator may initiate a disciplinary action within _____ year(s) of an agent's withdrawal of registration.

No place of business in the state

The de minimis exemption for fewer than 6 retail clients only applies when there is _________________.

A place of business

The investment adviser representatives of a federal registered adviser are required to register in each state in which they have _____________.

Securities Exchange Act of 1934

This Act regulates the secondary market and its employees and firms. Under Federal Law, it regulates the activities of broker-dealers and associated persons.

State licensing fee

This is required to effectuate annual renewal of the registration of an investment adviser representative affiliated with a federal covered adviser?

Form ADV part 2

This requires investment advisers to prepare narrative brochures that include plain English disclosures of the adviser's business practices, fees, conflicts of interest, and disciplinary information. The brochure is the primary disclosure document for investment advisers and must be delivered to advisory clients

agent, issuer, bank (both domestic and international)

Under the USA, who is specifically excluded from the definition of broker-dealer?

30

Under the Uniform Securities Act, if the Administrator does not deny an application for registration and no disciplinary proceeding is underway in regard to it, how many days after filing the application as an investment adviser representative does registration generally become effective?

B

Under the Uniform Securities Act, which of the following statements regarding the employment of investment adviser representatives by a state-registered investment adviser is (are) TRUE? I. The investment adviser must notify the Administrator whenever a representative is terminated. II. An investment adviser is not required to notify the Administrator when a representative begins employment. III. The registration of a representative is effective only as long as the individual is employed by a registered investment adviser. A) I, II, and III B) I and III C) III only D) I only

Wrap Fee Program

When a broker-dealer offers a ___________, the exclusion from the definition of investment adviser is lost. Any individual soliciting for that program would be considered an investment adviser representative and would need adequate supervision.

Place of business

When it comes to federal covered advisers, registration of their IARs is dependent on the IAR's ___________________________

A

Which of the following individuals employed by an investment adviser would be required to be registered as an IAR? A) A chief compliance officer (CCO) who has no sales duties B) The vice president of human resources C) An intern who receives no compensation whatsoever D) The night watchman

I, II, IV, VII

Which of the following must be disclosed when applying for registration as an investment advisor representative? (list out #s). I. Negative financial information, such as unsatisfied judgments or liens and bankruptcy II. Employment history for the past 10 years III. Employment history for the past 5 years. IIII. Residential history for the past 3 years. IV. Residential history for the past 5 years VI. Highest educational level achieved and the institution attended. VII. If, during the past 10 years, the applicant was a full-time student

No

Yes/No: Does consent to service of process need to be renewed?