QBANK QUESTIONS
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?
30 days
Which of the following statements regarding the differences between Rule 506(b) and Rule 506(c) of Regulation D of the Securities Act of 1933 are TRUE? A. Rule 506(c) offerings can be advertised, while Rule 506(b) offerings cannot. B. Rule 506(c) offerings are limited to 35 nonaccredited investors, while Rule 506(b) offerings do not have a limit. C. The bad actor provisions only apply to Rule 506(c) offerings. D. Rule 506(c) offerings are limited exclusively to accredited investors, while nonaccredited investors can participate in Rule 506(b) offerings.
A & D
A federal covered investment adviser employs the services of a third-party solicitor. The Investment Advisers Act of 1940 would require the solicitor to deliver A. a copy of the IA's brochure B. a copy of the solicitor's brochure C. a copy of the solicitor's script D. a copy of the IA's Form ADV Part 1
A AND B
When an Administrator issues a final order, an agent subject to the order may A. obtain a review of the order in an appropriate court of law B. request that additional evidence be presented to the court C. request a hearing 90 days after the final order D. not appeal a court's decision
A AND B
If having discretion over $100 million or more in 13(f) securities, which of the following would be exempt from filing a Form 13F?
A natural person who exercises investment discretion over her own account
As defined in the Uniform Securities Act, which of the following is NOT a security? A) Annuity providing a fixed monthly payout B) Common stock of ABC National Bank that is a member of the Federal Reserve System C) Interest real estate limited partnership (RELP) program D) Options on a federal covered security
A) Annuity providing a fixed monthly payout
Under the Uniform Securities Act, a sale includes all of the following EXCEPT A) a pledge of securities for the purpose of obtaining a margin loan B) a disposition of a security for value C) a contract of sale D) a contract to sell
A) a pledge of securities for the purpose of obtaining a margin loan
Discretion
Asset (the specific security) Action (buy or sell) Amount (the number of shares or bonds)
The Administrator may A. deny a registration if the registrant does not have sufficient experience to function as an agent B. limit a registrant's functions to that of a broker-dealer if, in the initial application for registration as an investment adviser, the registrant is not qualified to act as an adviser C. take into consideration that the registrant will work under the supervision of a registered investment adviser or broker-dealer in approving a registration D. deny a registration, if it is prudent in view of a change in the state's political composition
B AND C
Ways in which offerings under Rule 506(c) of Regulation D of the Securities Act of 1933 differ from those under Rule 506(b) include each of these except A) general solicitation is permitted under Rule 506(c) offerings; no advertising is permitted under Rule 506(b) B) securities issued under Rule 506(c) are federal covered, while those under Rule 506(b) are not C) all purchasers of the Rule 506(c) securities must be accredited investors as defined in Rule 501, whereas Rule 506(b) permits a limited number of sophisticated but not accredited investors D) the issuer must take "reasonable steps" to verify that all purchasers are accredited investors in a 506(c) offering, while no such obligation falls upon issuers in a 506(b) offering
B) securities issued under Rule 506(c) are federal covered, while those under Rule 506(b) are not
Which of the following does NOT have a federally imposed exemption from registration with the SEC? A) Securities issued or guaranteed by the U.S. government B) Promissory notes and bankers' acceptances with maturities of 9 months or less where the proceeds are not used for capital expenditures C) Shares of bank holding companies traded on the New York Stock Exchange D) Securities issued or guaranteed by a state or political subdivision of a state
C) Shares of bank holding companies traded on the New York Stock Exchange
As the use of social media has mushroomed, most firms in the securities business have created and maintain websites. In addition to password-protected areas for existing clients, these websites generally have pages accessible to anyone. Which of the following statements could be on an investment adviser's website that would not be on that of a broker-dealer? A) A statement that the firm is registered with the SEC under the Securities Exchange Act of 1934 B) The firm is a member of FINRA C) A statement that the firm is registered with the SEC under the Investment Advisers Act of 1940 D) The content found on this website has been approved by the SEC
C) A statement that the firm is registered with the SEC under the Investment Advisers Act of 1940
All of the following actions must be completed prior to customers entering their first option trade EXCEPT A) approval by a designated options supervisor B) completion of the new account form C) receipt of a completed options agreement D) delivery of the options disclosure document (ODD)
C) receipt of a completed options agreement the agreement must be signed and returned by the customer within 15 days of account approval
All of the following are exempt from state registration EXCEPT A) fixed annuities issued by a small insurance company B) common stock in Mutual Savings Bank C) variable annuities issued by a major insurance company D) fixed-income securities issued by a bank
C) variable annuities issued by a major insurance company
Under Section 28(e) of the Securities Exchange Act of 1934, which of the following is allowable soft-dollar compensation from a broker-dealer to an investment adviser under the safe harbor provisions?
Custodial services provided by the broker-dealer
Under the USA, the least active review of registration documentation is performed by state Administrators before which of the following becomes effective? A) Coordination B) Qualification C) Application D) Notice filing
D) Notice filing
Alex Alexander is planning on registering as an agent for a broker-dealer. Which of the following would be the least likely requirement for a successful application? A) Taking and passing an examination B)bPaying the filing fees C) Filing an application for registration D) Submitting fingerprints
D) Submitting fingerprints
All of the following are exempt securities under the Uniform Securities Act EXCEPT A) securities issued by the Canadian government B) securities issued by a federal savings and loan association C) securities issued by a Canadian province D) securities issued by a bank holding company
D) securities issued by a bank holding company
Strategic Capital Asset Managers (SCAM) is an investment adviser that is registered in 5 states. In lieu of preparing a fancy brochure, SCAM is permitted to provide its clients with a copy of its
Form ADV Part 2A and Part 2B
Under the Uniform Securities Act, all of the following are included in the definition of the term exempt transaction except A) a sale of unregistered nonexempt securities in an unsolicited transaction B)na sale of securities to an individual investor with a net worth of more than $5 million C) a sale of securities to a bank D) a sale of nonexempt securities to a broker-dealer
a sale of securities to an individual investor with a net worth of more than $5 million
Which of the following statements is (are) TRUE regarding investment advisory contracts under the Uniform Securities Act? A. The adviser cannot be compensated on the basis of a share of the capital gains or capital appreciation in a client's account. B. The advisory contract may not be assigned without the consent of the client. C. If the adviser is a partnership, the adviser must notify clients with whom the adviser has contracts of any changes in the partnership within a reasonable time. D. An adviser may be compensated based on the total value of a client's account averaged over a specific period.
all of the above
Joan, who has a PhD in economics, has been employed as an agent by Gibraltar Securities for the past 15 years. Missing academic life, she resigns from the broker-dealer and accepts a position as an economics professor at a state university. Which, if any party, is required to notify the state securities Administrator of this change?
both Joan and the firm
The weak form of the efficient market hypothesis
implies that technical analysis is not worthwhile.
An agent is assisting a prospective client in opening an account. The individual refuses to provide his net worth and annual income. The agent should
in the absence of company policy to the contrary, open the account but limit transactions to unsolicited orders
LATE exclusion
lawyer, accountants, teachers, engineers
Under the Uniform Securities Act, an Administrator investigating violations
may appoint an officer who has the power to subpoena records, administer oaths, or require production of documents and books
Form ADV-E (E for surprise Examination)
must be completed by investment advisers that have custody of client funds or securities and that are subject to an annual surprise examination. Then the IA gives this form to the independent public accountant that examines client funds and securities in the custody of the investment adviser.
An agent of a broker-dealer registered in Illinois terminates his employment to accept a new position with a broker-dealer who is also registered in Illinois. If his previous employer fails to notify the state Administrator of the termination, the agent must
notify the Administrator in Illinois of his termination
Under the provisions of the Dodd-Frank Act of 2010
pension consultants providing advisory services to employee benefit plans having at least $200 million of assets may register with the SEC
An investment adviser representative of a federal covered investment adviser registers with
the Administrator.
The responsibility for administering the Investment Advisers Act of 1940 lies with
the SEC
The holding period return (HPR) on a share of stock is equal to
the capital appreciation plus the dividend income received over the period
Under rule 206(4)-7 of the Investment Advisers Act of 1940, each investment adviser registered with the SEC is required to adopt and implement written policies and procedures designed to prevent violation of the federal securities laws. Ensuring that this is done is the role of
the chief compliance officer (CCO)
A state-registered investment adviser would be permitted to
use Part 2 of the Form ADV to satisfy the brochure requirement
Dollar cost averaging requires
volatile market conditions fixed dollar amount invested monthly
What is the purpose of the Securities Exchange Act of 1934?
was designed to regulate securities transactions, securities markets, and securities firms that trade in the secondary market
The Investment Advisers Act of 1940 addresses the issue of investment advisers (IA) maintaining custody of client funds and/or securities. In which of the following cases would that act consider the IA to have custody? A. Possession of client funds or securities B. Any arrangement under which the IA is authorized or permitted to withdraw client funds or securities maintained with a custodian upon the IA's instruction to the custodian C. Any capacity that gives the IA or a supervised person legal ownership of or access to client funds or securities D. Receipt of a check made out to a third party
A, B, AND C
Securities issued by which of the following would be exempt from the registration requirements of the Uniform Securities Act? 1. Nonprofit organization 2. Exchange-listed security 3. Federal savings and loan association 4. Federal credit union
ALL OF THE ABOVE
The Uniform Securities Act provides an exemption from registration as an investment adviser for which of the following persons who have no place of business in the state? A. Advisers who deal exclusively with broker-dealers B. Advisers who deal exclusively with insurance companies C. Advisers who deal exclusively with investment companies D. Advisers who have no more than 5 clients in that state in a 12-month period
ALL OF THE ABOVE
Over which of the following would the investment adviser representative have discretionary authority?
An account in which the investment adviser representative chooses portfolio securities on behalf of the client
An issuer properly files Form D in accordance with Rule 503 of Regulation D of the Securities Act of 1933. As such, the securities that are the subject of any transaction are
federal covered securities
Consent of the client before completion of a trade made between the firm and a client must be made when
A) an investment adviser will be acting in the capacity of a principal B) a broker-dealer will be acting in the capacity of an agent C) a broker-dealer will be acting in the capacity of a principal D) a broker-dealer will be acting as a contra party to the trade
A registered investment adviser recommends a stock that will be sold to his client in a principal transaction. The broker-dealer that will sell the stock is also registered as an investment adviser and employs the investment adviser as an agent. This transaction A) requires both written disclosure to and the consent of the client prior to the completion of the transaction B) requires written disclosure to the client C) requires the consent of the client D) is prohibited
A) requires both written disclosure to and the consent of the client prior to the completion of the transaction
