Final #4 Missed Questions

An investment adviser has been formed and the firm and its representatives file their first registration with the State on April 30th. On May 1st of the following year, the firm files renewal registrations for itself and its representatives. Which statement is TRUE under the Uniform Securities Act? A. Both the investment adviser's registration and the investment adviser representatives' registrations are out of compliance B. Both the investment adviser's registration and the investment adviser representatives' registrations are in compliance C. The investment adviser's registration is in compliance but the investment adviser representatives' registrations are out of compliance D. The investment adviser's registration is out of compliance but the investment adviser representatives' registrations are in compliance

A Registration of BD's, IA's, and their Agents expires on December 31 of each year

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

Under the Uniform Securities Act, a person who renders investment advice solely about U.S. Government Agency securities is defined as a(n): A. investment adviser and must register under the Act B. federal covered adviser, and is not required to register under the Act C. broker-dealer and must register under the Act D. agent and is required to register under the Act

B A person who gives investment advice relating solely to U.S. Government securities (including Agency securities), is excluded from Federal registration under the Investment Advisers Act of 1940.

After being solicited by an agent of ABC Brokerage, a customer bought 1,000 shares of XYZZ stock (an OTCBB issue) at $15 per share. The stock rapidly declined to $8 per share, and the customer sold the shares. Six months later, the customer received a written offer of rescission from the broker-dealer, stating that the stock had not been registered in the State where the customer lives. Which statement is TRUE about the customer accepting the offer? A. The buyer cannot accept the offer of rescission because he no longer owns the stock B. The offer must be accepted verbally within 30 days of receipt C. The offer must be accepted in writing within 30 days of receipt D. The offer cannot be accepted unless the Administrator holds a hearing within 15 days of receipt

B If an offer of rescission is made to the buyer, then the seller must either accept in writing in 30 days or the offer is void.

An Investment Adviser Representative is terminated. Under the Uniform Securities Act, which statement is TRUE about the records that must be retained by the Investment Adviser relating to this? A. The copy of the original U-4 signed by the registrant must be filed with the State Administrator B. The copy of the original U-4 signed by the registrant must be destroyed C. The copy of the original U-4 signed by the registrant must be retained for a period of time specified by the State D. The copy of the original U-4 signed by the registrant must be given to the terminated representative

C

An investment adviser representative has joined the local golf club, where there are many wealthy club members. At the club, the IAR has met many individuals who are interested in having her investment advisory firm manage their money. As an inducement only available to club members, the IAR offers to reduce the annual management fee to .25% of annual average net assets from the usual fee of .35%, conditioned upon a minimum of $500,000 being invested by that club member. Which statement is TRUE about this offer? A. This is a prohibited discriminatory fee arrangement under both NASAA and SEC rules B. This is a permitted fee arrangement because it is conditioned upon a minimum investment of $500,000 C. This is a permitted fee arrangement as long as the existence of the negotiated discount is disclosed in the Form ADV Part 2A D. This is a permitted fee arrangement only if the State Administrator approves of the arrangement prior to the acceptance of the offer by any club member

C

Which of the following can be filed electronically? I Registration application information II Signature requirement III Payment of fees IV Answer to a subpoena A. I and III B. III and IV C. I, II, III D. I, II, III, IV

C A subpoena must be answered by a personal appearance in court

Which of the following is NOT a federal covered security? A. An offering made over-the-counter of $250,000,000 of 10% convertible debentures of ACME Corporation, a company whose common stock is listed on the American Stock Exchange (NYSE American) B. A private placement of $250,000,000 of debt backed by automobile finance company receivables sold to investment managers that are qualified purchasers C. An offering of $250,000,000 of General Obligation bonds by the City of New Orleans to the residents of Louisiana D. An offering of $250,000,000 of common shares of a mutual fund that will be offered to the general public

C Municipal bonds are exempt

Under the Uniform Securities Act, civil liability may arise if an agent: I makes deceptive statements about a securities offering II sells a non-exempt new issue of securities prior to the filing of a registration statement in that State III fails to guarantee the safety of a new issue securities offering A. I only B. II only C. I and II D. I, II, III

C Under Uniform State law, guaranteeing a customer against loss is prohibited, so Choice III is incorrect.

Which of the following are defined as securities under the Uniform Securities Act? I Warehouse receipt II Collateralized Mortgage Obligation III Fixed Annuity Contract IV Pre-organization certificate A. II only B. III and IV C. I, II, and IV D. I, II, III, IV

C Insurance companies bear the risk for fixed annuity contracts

The State Administrator is empowered to do all of the following EXCEPT: A. administer oaths and affirmations B. hold disciplinary hearings C. conduct investigations D. issue a summons for a failure to appear

D The Administrator cannot issue a summon to appear - this can only be imposed by a court of law.

A State Administrator can require that a new investment adviser who files a registration application in the State file: I Proposed advertising II An announcement of the application in 1 or more newspapers III Standardized form letters to be used for prospecting A. I only B. I and II only C. II and III only D. I, II, III

D Under the Uniform Securities Act, the Administrator can require the filing of any prospectus, pamphlet, circular, form letter, advertisement or other sales literature or advertising communication addressed or intended for distribution to prospective investors.