Registration & Licensing

Which of the following individuals is defined as an "agent" under the Uniform Securities Act? I An individual who represents a broker-dealer selling exempt securities to the public II An individual who represents a broker-dealer selling securities listed on a national stock exchange III An individual who represents an issuer in an exempt transaction IV An individual who represents an issuer in a transaction with existing employees without accepting a commission A. I and II only B. III and IV only C. I, II, IV D. I, II, III, IV

A. I and II only

A BD application is received by the State Administrator for a new broker-dealer subsidiary of a Swiss securities firm. The application includes the disclosure that the parent firm was suspended from membership on the Deutsche Bourse 6 years ago because of unauthorized trading by its Hong Kong branch. The State Administrator A. cannot deny registration based on the suspension that was imposed by a foreign regulator B. can deny registration based on the suspension by the foreign regulator C. must grant registration because the U.S. subsidiary is a legally separate entity from the parent company that is based in Switzerland D. can deny registration only if the actions of the parent company were a criminal offense

A. cannot deny registration based on the suspension that was imposed by a foreign regulator

Under the Uniform Securities Act, which of the following would be required to register as an investment adviser representative? A person who: A. effects sales of advisory services for an Investment Adviser B. renders advice about the advisability of investing in securities C. handles the books and records of the Investment Adviser D. registers Investment Adviser Representatives in the State

A. effects sales of advisory services for an Investment Adviser

When an agent changes employment from one broker-dealer to another, the agent's registration must be transferred: A. immediately B. within 10 days C. within 30 days D. at renewal time

A. immediately

To register a successor firm with the State Administrator for the unexpired portion of the current license year, which statement is NOT true? A. The predecessor firm must have ceased business operations and can only conduct winding down transactions B. The successor firm must continue business operations through the end of that license year C. The successor firm must file a Form BD or ADV amendment with the Administrator D. The filing becomes effective on the date designated by the licensee

B. The successor firm must continue business operations through the end of that license year

Which person would be required to register as a broker-dealer in a State? A. A person with no place of business in the State who conducts securities transactions with the issuer of non-exempt securities B. A person with no place of business in the State who represents an issuer in the sale of exempt securities to non-institutional customers for compensation C. A person with no place of business in the State who represents an issuer in the sale of non-exempt securities to the issuer's employees without receiving compensation D. A person with no place of business in a State who conducts securities transactions with financial institutions in the State for compensation

B. A person with no place of business in the State who represents an issuer in the sale of exempt securities to non-institutional customers for compensation

A person who renders advice on variable annuities for a fee; and who then sells the annuities, charging a commission, MUST: I register as an investment adviser in that State II register as a broker-dealer in that State III register as an agent in that State A. I only B. I and II C. I and III D. None of the above

B. I and II

Which statements are TRUE regarding licenses held by broker-dealers and agents? I If a broker-dealer's license is suspended, all of its agents' licenses are suspended II If an agent's license is suspended, the broker-dealer's license is suspended III If the broker-dealer's license is suspended, its agents may become associated with another broker-dealer A. I only B. I and III C. II and III D. I, II, III

B. I and III An agent's license is effective only if that individual is associated with a broker-dealer. If the broker-dealer's license is revoked, all of its agents' licenses are revoked. However, those agents may associate with another broker-dealer, and can be licensed through the new firm. If an agent's license is revoked, it has no effect on the broker-dealer.

An Investment Adviser falls below the minimum net capital required by the State on Monday. The IA must file a report with 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. Wednesday of that week

If a representative that transacts business in a State terminates employment with an investment adviser, notice must be given to the Administrator by the: I Investment Adviser II Officer or Director of the Investment Adviser III Investment Adviser Representative A. I only B. I and III C. II and III D. I, II, III

B. I and III If a representative of an investment adviser terminates employment, the adviser must notify the Administrator promptly. Notice that this is different than the requirement for a broker-dealer, where both the terminated agent and the broker-dealer must notify the Administrator. Also note that this is different than the requirement for a federal covered adviser, where only the investment adviser representative must notify the State Administrator.

If an agent of a broker-dealer terminates employment, notice must be given: I promptly to the Administrator II to the Administrator within 30 days III by the agent only IV by both the agent and the broker-dealer A. I and III B. I and IV C. II and III D. II and IV

B. I and IV

An investment adviser representative quits her employment with a State-registered adviser so that she can move to another State. She learns that the advisory firm with which she was employed did not notify the Administrator of her termination. Which statement is TRUE? A. The IAR is not required to take any action B. The IAR is required to notify the Administrator of the termination C. The IAR must file a consent to service of process D. The IAR must publicly disseminate the fact that she is no longer associated with the advisory firm in the State

B. The IAR is required to notify the Administrator of the termination If a representative of an investment adviser terminates employment, the adviser must notify the Administrator promptly. If the representative learns that the adviser has not given notice, then the representative must do so promptly. Also note that this is different than the requirement for a federal covered adviser, where only the investment adviser representative must notify the State Administrator.

Which statement is TRUE about registering a marketing officer of an Investment Adviser as an Investment Adviser Representative (IAR) with the State? A. The marketing officer of an Investment Adviser is not registered as an IAR B. The marketing officer of an Investment Adviser will be automatically registered when the Investment Adviser registration is filed in the State C. The marketing officer of an Investment Adviser is only required to register if the firm is a Federal Covered Adviser D. The marketing officer of an IAR must file a registration application that is independent of the Investment Adviser registration application

B. The marketing officer of an Investment Adviser will be automatically registered when the Investment Adviser registration is filed in the State

The State Administrator, as a condition of registration in the State as an investment adviser, can require the: A. incorporation of the investment adviser in the State B. publication of an opening announcement in a local newspaper C. filing of the names and contact information of the investment adviser's clients with the State D. sending a written notice to all other registered investment advisers in the State of the opening of the IA firm

B. publication of an opening announcement in a local newspaper

An Investment Adviser Representative is employed by ECCO Advisers, a Federal Covered adviser. ECCO Advisers has its only office in State Y, and has made a notice filing the State Y's Administrator. The IAR gives seminars to potential clients in State Z, which is only 5 miles from the ECCO's offices in State Y. The IAR is: A. required to be registered in State Y only B. required to be registered in State Z only C. required to be registered in both State Y and State Z D. not required to be registered in either State Y or State Z

C. required to be registered in both State Y and State Z

If an agent of a broker-dealer wishes to withdraw his registration, which of the following statements are TRUE? I Both the agent and the broker-dealer must notify the Administrator II Notification to the Administrator of the withdrawal must be made promptly III The withdrawal does not become effective for 30 days IV If there is a customer complaint, the Administrator retains jurisdiction over the agent for a period of 5 years from the withdrawal date A. III only B. II and IV C. I, II, III D. I, II, III, IV

C. I, II, III

State "blue sky" laws provide for: I Registration of broker-dealers II Registration of agents III Registration of investment advisers IV Registration of issuers A. I and II only B. III and IV only C. I, II, III D. I, II, III, IV

C. I, II, III

The registration of a broker-dealer may be revoked for which of the following reasons? I The firm does not maintain required records II The firm does not file financial reports with the Administrator III The firm does not file advertising with the Administrator IV The firm does not file customer complaints with the Administrator A. I and II only B. III and IV only C. I, II, III D. I, II, III, IV

C. I, II, III

Under the Uniform Securities Act, which of the following persons are EXCLUDED from the definition of a "Broker-Dealer"? I An issuer of securities II An agent of an issuer of securities III An agent of a broker-dealer IV A person who has a place of business in the State that only effects securities transactions with institutions A. I and II only B. III only C. I, II, III D. I, II, III, IV

C. I, II, III

Which of the following persons would be defined as an "agent" under the Uniform Securities Act? A. April Showers, an administrative assistant in the Treasurer's Department at Rainwear Industries, who sells Rainwear common stock to Rainwear employees under Rainwear's ESOP B. John Q. Public, a municipal employee that accepts tender offers from the public for new issues of general obligation bonds being sold by New York City C. Marvin Mercenary, the President of Capital Industries, who sells Capital Industries common stock to the public D. Ima Pigg, the Controller of PorkPie Products, who negotiates and sells a private placement of PorkPie stock to institutional investors

C. Marvin Mercenary, the President of Capital Industries, who sells Capital Industries common stock to the public

A Registered Investment Adviser (RIA) headquartered and registered in State X gives advice only to insurance companies, pension plans and investment companies. The RIA has no office in any other State. The adviser does business in State Y and receives a letter from the Securities Commissioner of State Y which explains that State Y believes that the adviser is required to be registered there, along with a questionnaire to be completed and returned to State Y. Which statement is TRUE? A. The RIA will be required to be registered in State Y because it is doing investment advisory business there B. The RIA will be required to be registered in State Y because it is not a Federal Covered Adviser C. The RIA will not be required to be registered in State Y because it has no office there and it only deals with professional investors D. The RIA will not be required to be registered in State Y because it can only be required to be registered in one State and it is already registered in State X

C. The RIA will not be required to be registered in State Y because it has no office there and it only deals with professional investors

Which of the following can cause the Administrator to deny an application for registration? A. The applicant was convicted of a Driving Under the Influence misdemeanor 4 years ago B. The applicant plead guilty to a minor traffic violation 2 years ago C. The applicant is the subject of an order from a Canadian court suspending registration as a securities representative D. The applicant declared bankruptcy in another State 5 years ago

C. The applicant is the subject of an order from a Canadian court suspending registration as a securities representative

You are an agent registered in a State where you have a customer. The customer will be going to college in another State. May the agent still do business with the customer, even though the agent is not registered in the State where the student is going to college? A. Only if the student signs a statement authorizing the agent to contact him or her while at school B. Only if the agent files notice in the state where the student is going to college C. Yes, because the student is not considered to be a resident of the state where he or she is attending college D. No, because the agent must be registered in the state where the student is going to college

C. Yes, because the student is not considered to be a resident of the state where he or she is attending college

An officer of an issuer is engaged in the sale of that issuer's securities to the public. The issuer's securities are federal covered. The officer is: A. excluded from the definition of an agent because the securities involved are federal covered B. not defined as an agent because officers of issuers are excluded C. defined as an agent who must register in the State D. defined as an issuer and is not required to register in the State

C. defined as an agent who must register in the State

A customer of a broker-dealer that is located in California moves to Nevada. The broker-dealer is registered in both States. The agent that handles the account wishes to remain the agent of record on the account. In order to do so, the agent: A. is not required to do anything B. must appear in front of the Nevada State Administrator C. must register in Nevada D. must file a dual registration on Form U-4

C. must register in Nevada

Under the Uniform Securities Act, who must notify the State Administrator when an agent disassociates from his or her broker-dealer? A. Agent B. Broker-dealer C. Neither of the above D. Both of the above

D. Both of the above Under the Uniform Securities Act, when an agent associates with a broker-dealer; or terminates those activities that make him an agent; both the agent and the broker-dealer must notify the State Administrator promptly.

Under NASAA rules, which record is NOT required to be retained by an investment adviser? A. Written customer complaint received 4 years ago B. Advertising copy distributed to the public 2 years ago C. Trial balance of the investment adviser prepared 1 year ago D. Customer account statements prepared 6 years ago

D. Customer account statements prepared 6 years ago 5 years is the time

A broker-dealer that has a place of business in State A would be required to register in State A if it: I sold securities to customers in State A II made an offer to sell securities to customers in State A III effects securities transactions solely with institutional investors in State A IV effects securities transactions solely with issuers in State A A. I and II only B. III and IV only C. I, II, III D. I, II, III, IV

D. I, II, III, IV

An investment adviser representative of a Federal Covered adviser with no office in the state only has insurance companies as clients. Where must the adviser representative register? A. SEC B. State C. Both the SEC and the State D. Neither the SEC nor the State

D. Neither the SEC nor the State

NASAA has the power to set record retention rules for a Federal Covered Adviser that cover which of the following records? I Communications to 2 or more persons II E-mails to clients III Trial balances IV General ledger A. I and II only B. III and IV only C. I and IV only D. None of the above

D. None of the above NASAA does state not federal

Which one of the following items would be included in the computation of an individual investment adviser's net capital? A. Copyright owned by the adviser B. Franchise right owned by the adviser C. Home furnishings owned by the adviser D. Securities owned by the adviser

D. Securities owned by the adviser

A registration application is considered to be "complete" when the proper documents: A. are sent to the Administrator B. and the filing fee are sent to the Administrator C. are received by the Administrator D. and the filing fee are received by the Administrator

D. and the filing fee are received by the Administrator