Series 63 chapter 1

Not sales

1. Bona fide pledge or loan of securities 2. Stock dividend 3. Shares acquired as a result of a merger or reorganization 4. Converting a bond to a stock

Investment advisors

1. Makes recommendations or gives advice with regards to securities 2. A person who determines the suitability of recommendations 3. A person who supervises employees who provide advice with regard to securities

When is something solicited in a state?

1. it originates there 2. it is directed there 3. It is accepted there

Sell or sales

Any contract of sale or contract to sell a security for value is considered a "sale" 1. receiving a security as a bonus. 2. Receiving rights or warrants to buy another security 3. Receiving a gift of assessable stok

state

Any state, territory, or possession of the US including the district of Columbia, and Puerto Rico.

An individual is hired by a company that is planning to issue securities to the public in States A, B, and C. The company has registered in States A, B, and C, but the individual is only registered as an agent in States A and B. Which of the following are correct of this scenario?

I.In this case, the company that plans to issue securities can sell the securities in States A, B, and C. II. IV.In this case, the agent that plans to work for the issuer may only sell securities in States A and B under their current registrations.

Mike and Ike have been friends since grade school. Mike is now registered as an investment adviser representative at ABC Advisors, while Ike decided to become an accountant at XYZ Accounting. The firms are unaffiliated. If Mike and Ike refer business to one another, which of the following is TRUE of the rules of the Uniform Securities Act in this case?

If Mike pays any referral fees to Ike, then Ike would have to be registered as an investment adviser representative of ABC Advisors, even if Ike never pays referral fees to Mike. Under the Uniform Securities Act, individuals who are paid referral fees related to investment advisory services typically must be registered as investment advisor representatives. There is no regulation requiring registration as an IAR for referring business to an accountant. If no referral fees are paid between Mike and Ike or the firms, then typically, Ike and his accounting firm would NOT be required to register as IAR and IA, respectively.

Difference between federal covered advisor, and a federal covered investment advisor

In order to become a federal covered advisor, a firm must be registered with the SEC as a federal covered advisor. Included in this definition are IA firms that provide advice to registered investment companies, and IA firms that manage assets totally more than 25 million. Firms that only provide advice on US government securities are exempt form registration under the IA act of 1940. Firms registered in multiple states do not automatically meet the definition of a federal covered advisor.

Purported gifts

Not bona fide gifts. They are sales which appear to be a gift such as assessable stock.

Investment advisor representative

Rendering advice or giving recommendations with regard to securities.

federal covered security

Security that is covered by federal law under the securities act of 1933. The security must be registered with the SEC or is exempt from registration with the SEC. 1 .Securities listed on a national stock exchange 2. Investment companies or pooled investment fund shares 3. Securities sold to qualified purchasers. Exempt from being federally covered: 1. US government securities 2. Muni bonds if offered outside the state of issue 3. Securities that are unregistered and issued as private placement.

Under what circumstance is a broker/dealer with no office in a given state required to ensure that agents of the firm are registered in that state?

The firm's agents in the state deal solely with individuals, ranging from city workers and teachers to sole proprietors owning large companies.

assessable stock

a class of stock in which the issuing company has the ability to impose future levies on stockholders for additional funds.

solicitation

any oral, written, or other communication used to offer or sell investment company shares.

Guarantee

guarantee as to payment of principal, interest, or dividends