1 - Registration

Adoption

a firm's endorsement of the content of a third-party site - aka posting an article

USA requires BD to keep records for

3 years

How long does investment adviser reg take, and can it ever take less

30 calendar days after date of filing, and it can be sooner if admin allows it

BD reg under USA

30 days, although can be sooner if admin decides

BD reg under 1934 act

45 days

Requirements for reg as an agent

Filing fees, surety bond posted, and consent to service of process - NO NET WORTH RQMT

What can the admin require from BD

Financial reports

Broker-dealer A wants to promote and reward teamwork. The firm plans to pay out a small percentage of the firm's profits to the clerical staff as a bonus for their hard work. Under NASAA rules, is this permitted? A)Yes, no registration is necessary. B)No, this cannot be done. C)Yes, if all of the agents agree to it. D)Yes, if the entire clerical staff is registered as agents for the firm.

A)Yes, no registration is necessary. Bonuses based on a broker-dealer's profits may be payable to nonregistered clerical help as long as there is no direct relationship to any specific sales.

ABC Advisers, Inc., has made application for registration as investment adviser with state X on April 15, 2014. Assuming there will be no denial or stop order, the registration will become effective: A)4/30/2014. B)4/15/2014. C)5/1/2014. D)5/15/2014.

D)5/15/2014.

Under the Uniform Securities Act, it is legal for a investment adviser representative to tell a client that: A)a registered security may lawfully be sold in that state. B)a registered security has been approved for sale in the state by the Administrator. C)her qualifications have been found satisfactory by the Administrator. D)an exempt security is not required to be registered because it is safer than a nonexempt security.

A)a registered security may lawfully be sold in that state. An IAR may indicate that a security is registered or is exempt from registration; all of the other statements are prohibited.

As a federal covered security, the KAPCO Growth Fund is required to notice file under the laws of State A. State A's Administrator can require the issuer to provide copies of A)a report of the amount of the federal covered security sold in the state B)the schedule of compensation to the fund manager C)a listing of the officers and directors of the issuer D)proxy statements

A)a report of the amount of the federal covered security sold in the state Because those companies which are required to notice file are levied a fee based on the amount of securities sold in the state, information relating to the amount of sales in the state must be reported.

The Uniform Securities Act provides several alternative methods of registration for securities issues. What is the threshold used to determine if an issue may be registered using coordination? A)A registration statement has been filed under the Securities Act of 1933 in connection with the same offering. B)The issuer has been in business for a period of no less than three years. C)The issuer must have a minimum capitalization of $100,000 prior to the public offering. D)For a period of at least 30 days during the three months preceding the offering of the securities registered, there have been at least four market makers for the class of equity securities registered under Section 12 of the Securities Exchange Act of 1934.

A)A registration statement has been filed under the Securities Act of 1933 in connection with the same offering. The USA specifically states in Section 303 that any security for which a registration statement has been filed under the Securities Act of 1933 in connection with the same offering may be registered by coordination. There are no net worth, operating history, or minimum number of market makers required.

Which of the following must register as an agent under the Uniform Securities Act? A)A sales assistant who takes orders on behalf of agents in a branch office. B)A broker-dealer with offices in the state. C)An administrative assistant who provides securities quotes to clients. D)An individual who sells securities of an issuer to the issuer's employees without earning a commission.

A)A sales assistant who takes orders on behalf of agents in a branch office. A sales assistant who takes orders on behalf of agents in a branch office is required to register under the Uniform Securities Act. An administrative assistant who provides securities quotes to clients is not functioning as an agent and need not register. An individual who sells securities of an issuer to the issuer's employees without earning a commission need not register under the terms of the USA. Remember, a broker-dealer is excluded from the definition of an agent under the USA.

Which one of the following would NOT be considered a fraudulent or prohibited business practice? A)Attempting to solicit a trade in unregistered exempt securities with an individual client. B)Omitting a material fact because the agent felt the client would not understand the information involved. C)Larger than ordinary commissions without prior disclosure to the client. D)Submitting a trade order for a potential client who has promised that the new account would be opened tomorrow.

A)Attempting to solicit a trade in unregistered exempt securities with an individual client. Even though the security is unregistered, because it is exempt, no registration is required. Material information must be disclosed, even if the client doesn't understand its meaning. No trades can take place until an account is opened, and although there are circumstances that permit larger than ordinary commissions, that fact must be disclosed to the client.

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? A)Both Joan and the firm. B)Only Joan. C)Only the securities firm. D)No party, because Joan's termination is voluntary and not for cause.

A)Both Joan and the firm. The license of an agent expires when she ceases to be employed by the broker-dealer or issuer for whom she was previously licensed. Both the agent and the former broker-dealer are required to notify the Administrator promptly.

Which of the following can be substituted for a surety bond? A)Cash or securities. B)Cash or commodities. C)A consent to service of process. D)Commodities, cash, or securities.

A)Cash or securities. The Uniform Securities Act states that cash or securities may be used instead of a surety bond.

If an investment adviser files an initial registration with a state on June 30, which of the following statements regarding the filing fee to be paid is TRUE? A)The full year's fee must be paid. B)No filing fee is required until December 31. C)The fee will be prorated from the filing date. D)The fee will be prorated from the effective date.

A)The full year's fee must be paid. While some states make exceptions for filings late in the year, under the USA there is no pro-rating of filing fees. The full year's fee must be paid with the initial registration request.

According to the Uniform Securities Act, a consent to service of process must accompany which of the following? Agent's registration application. Civil complaint against a broker-dealer. Broker-dealer's initial registration application. A cease and desist order. A)I and III. B)I and IV. C)II and III. D)II and IV.

A)I and III. A broker-dealer, an agent, an investment adviser representative, or a state registered investment adviser must file a consent to service of process with the Administrator upon filing a registration application. The consent to service of process gives the Administrator the right to process legal complaints against the applicant. In some states, a federal covered adviser may also be required to furnish a consent to service of process.

According to the USA, a person must register as a broker-dealer in a state if he had which of the following? No place of business in the state, but clients who relocated their official residence to that state more than 30 days ago. No place of business in the state but dealt exclusively with broker-dealers in that state. No place of business in the state but effected transactions exclusively with issuers of securities in that state. A place of business in the state, but dealt exclusively with institutional clients such as insurance companies and trust companies. A)I and IV. B)I, II and IV. C)I, II, III and IV. D)II and III.

A)I and IV. The term "broker-dealer" excludes a person who has no place of business in the state, who effects transactions exclusively through issuers, other broker-dealers or institutions, or who directs an offer in the state to an existing customer. When clients move from one state to another, the broker-dealer may continue to do business with that client without registering in that state for up to 30 days. Once the client has been a new resident for more than 30 days, the broker-dealer (and any agents handling that account) must register in that state or cease doing business with that customer. If a broker-dealer has a place of business in the state, regardless of the nature of its clients, it must register with the Administrator.

Which of the following are TRUE under the Uniform Securities Act? An agent's license is suspended when the broker-dealer license is suspended. The broker-dealer license is suspended when an agent's license is suspended. The Administrator may suspend a broker-dealer's license because on his best judgment, the broker-dealer's business would be detrimental to investors. A person associated with a broker-dealer firm who has passed the Series 7 and the Series 66, but whose license has not yet been issued, may accept unsolicited orders only. A)I only. B)I and II. C)II and IV. D)I and III.

A)I only. An agent can only conduct business when associated with a broker-dealer. An agent's license could be suspended without the broker-dealer's license being suspended. To suspend a license, the Administrator must base the decision on the public interest and prohibited conduct. The Administrator cannot suspend or revoke licenses because he does not approve of the type of business a broker-dealer may engage in. Licenses must be issued before associated persons can accept orders.

ABC Widgits, Incorporated is a federal covered security. Under the Uniform Securities Act, a state Administrator may require, by rule or by order, the filing of a copy of ABC's articles of incorporation copy of the registration information filed with the SEC consent to service of process list of ABC's shareholders who are residents of the state A)I, II and III B)II and III C)II and IV D)I and III

A)I, II and III The Uniform Securities Act provides that an Administrator, by rule or by order, may require the filing of all documents that are part of a federal registration statement filed with the SEC together with a consent to service of process.

Which of the following statements is NOT true? A broker-dealer must be a firm or corporation (legal person) as opposed to a natural person (human being). An investment adviser must be a firm or a corporation as opposed to a natural person. An investment adviser representative (IAR) cannot, under any circumstances, be employed by a registered broker-dealer. A)I, II and III. B)II and III. C)I and III. D)I and II.

A)I, II and III. A broker-dealer or investment adviser can be either a natural person (i.e., organized as a sole proprietorship) or a legal person (i.e., a corporation or partnership). There is no prohibition against an investment adviser representative also being licensed as an agent with a broker-dealer.

If you are registered as an agent for a broker-dealer in State Y and you conduct business as an agent of theirs in State Z, a state in which you are not registered as their agent, you: expose yourself and your employer to disciplinary action by State Z expose yourself to a possible fine may obligate your broker-dealer to offer your client the right to rescind the sale may have your registration in State Y revoked A)I, II, III and IV B)II and III C)II, III and IV D)I, II and III

A)I, II, III and IV Agents must be registered in each state where selling or offering to sell securities unless an exemption is available. Failure to do so exposes the agent and the broker-dealer to fines and possible disciplinary action. In addition, the individual could have his registration revoked where he is registered, and the broker-dealer could be required to offer customers the right to rescind any securities transactions.

Under the Uniform Securities Act, it is required to file an application with the Administrator to become a registered broker-dealer in the state. Among the disclosures that must be made on that application are: the form of business organization to be used by the firm. any felonies or certain misdemeanors on the records of partners or officers. business history of the principals of the firm. financial information about the firm. A)I, II, III and IV. B)II, III and IV. C)I and III. D)I and II.

A)I, II, III and IV. Many disclosures have to be made and this is just a partial list. This would be the same answer if the question asked about an investment adviser.

A consent to service of process must be filed for registration of: investment adviser representatives. broker-dealers. investment advisers. agents. A)I, II, III and IV. B)II and IV. C)II and III. D)I and II.

A)I, II, III and IV. The consent to service of process is required for all initial registrations with the Administrator. It appoints the state Administrator as attorney for the registrant so that legal papers may be properly served. On the exam, the consent to service of process is considered to be a permanent document not subject to annual renewal.

One of your customers sends you an email with an attachment describing a "can't miss" investment opportunity. Which of the following would be a red flag you should share with the client? The security being offered is registered with the SEC and a number of states, including the state of residence of your client. The offer shows an anticipated return of 5% per month with little or no risk. Payment must be made by Western Union wire to an offshore account. Payment may be made by a check payable to an escrow account at the largest bank in your state. A)II and III B)I and IV C)I and III D)II and IV

A)II and III A high return with little or no risk is one of the most obvious red flags; so is payment with a nontraditional and generally nontraceable method, especially offshore. Sure, registration with the SEC, the states, or both is no guarantee, but at least you have some expectation of disclosure being made.

Which of the following is included in the definition of a broker-dealer under the Uniform Securities Act? A)One who effects securities transactions for his own account or on behalf of others. B)Out-of-state broker-dealer with no office in this state that services only other broker-dealers located in this state. C)Issuer of securities. D)Agent.

A)One who effects securities transactions for his own account or on behalf of others. Only one who is in the business of effecting transactions for his account or on behalf of others fits the definition of a broker-dealer. All of the other choices are specifically excluded from the definition.

A notice filing would be most appropriate for which of the following new issues? A)Open-end investment company shares. B)Intrastate offering. C)Railroad equipment trust certificate. D)Federal credit union shares.

A)Open-end investment company shares. Investment companies registered under the Investment Company Act of 1940 are exempt from registration with the states under the NSMIA. However, most states require notice filing and the payment of fees. Federal credit union shares and railroad equipment trust certificates are exempt securities and intrastate issues would have to register using qualification.

Which of the following statements best describes the effect of the NSMIA on securities regulation? A)Preempts state registration of covered securities. B)Provided for the registration of intrastate securities. C)Increased the power of state securities Administrators over registration of securities. D)Established the need for dual registration of securities.

A)Preempts state registration of covered securities. The National Securities Markets Improvement Act preempts state registration of covered securities. State administrators may not impose registration requirements on securities that are subject to federal regulation.

When a broker-dealer's registration under the Uniform Securities Act is revoked, which of the following occur? A)Registrations of agents of that firm are no longer in effect. B)The agent's registration is held in escrow until a hearing. C)The Administrator will choose a local broker-dealer to oversee activities of the agents until the broker-dealer's registration is reinstated. D)Registrations of agents of the firm are still in effect.

A)Registrations of agents of that firm are no longer in effect. An agent's license is only effective as long as that agent is associated with a registered broker-dealer. The agent's registrations are neither held in escrow until a hearing nor does the Administrator choose a broker-dealer to oversee activities of the agents until the broker-dealer's registration is reinstated.

An agent with a broker-dealer is suddenly called out of town on a personal family matter. While away, the agent's unregistered sales assistant receives a phone call from an existing client wishing to purchase 200 shares of a listed stock. What would be the most appropriate action for the sales assistant to take? A)Route the call to a licensed agent in the office. B)Accept the order because it is from an existing customer. C)Explain that the agent is out of town and request the client to call back with the order next week. D)Accept and place the order because it is unsolicited.

A)Route the call to a licensed agent in the office. The fact that the order is unsolicited does not preclude the rule that under no circumstances shall an unregistered individual accept and place orders.

Under Section 303 of the Uniform Securities Act, in order for an issue to register using coordination, it must simultaneously register under the provisions of the: A)Securities Act of 1933. B)Securities Exchange Act of 1934. C)Uniform Securities Act. D)Investment Company Act of 1940.

A)Securities Act of 1933. Registration by coordination is a form of state registration which coordinates state registration of a security with simultaneous federal registration of that security. Securities are registered at the federal level under the Securities Act of 1933.

Which of the following practices is considered unlawful under the Uniform Securities Act? A)Soliciting orders for unregistered, nonexempt securities. B)Accepting indications of interest in securities that are in the process of registering with the SEC. C)Claiming an agent is registered and authorized to conduct business in the state in which he practices. D)Not disclosing to a client within 48 hours of entering into an advisory contract that the adviser's brother was recently convicted of a securities-related felony.

A)Soliciting orders for unregistered, nonexempt securities. It is unlawful under the USA for an agent to solicit orders for securities that must be registered (nonexempt). An agent may indicate that he is registered to conduct business in a state, if that is true. The agent may not state that the Administrator has approved or endorsed a registration. An adviser is not under any legal obligation to disclose that his brother was convicted of a securities-related felony. The adviser, however, must disclose within 48 hours of entering into the contract if he has been convicted of a securities-related felony within the last ten years. An agent may accept indications of interest for securities during the registration process. The red herring prospectus is used during this period and neither offers to sell nor orders to buy may be accepted prior to the effective date.

Which of the following statements is TRUE? A)State Administrators are permitted to establish regulations relating to the registration, testing and fees for broker-dealers, agents, investment advisers and investment adviser representatives. B)The USA only provides for civil liabilities for persons involved in illegal securities transactions in their state, while federal law provides criminal penalties. C)The Uniform Securities Act is national law that each state enforces through a state Administrator. D)The state Administrator has authority to amend federal law to meet the needs or special circumstance in his state.

A)State Administrators are permitted to establish regulations relating to the registration, testing and fees for broker-dealers, agents, investment advisers and investment adviser representatives. The state Administrators are permitted to establish the requirements for broker-dealer, agent, investment adviser and investment adviser representative registrations, including testing, filing, and fee regulations. The Uniform Securities Act is model legislation for state regulation (not federal regulation) that each state may adapt to its own needs. The state Administrator does not have authority to amend federal law to meet special circumstance in his state. Each state can model its legislation on the Uniform Securities Act, but a state cannot change federal law and must abide by federal securities legislation. The USA provides for both civil and criminal penalties for persons involved in illegal securities transactions in their state.

Under the Uniform Securities Act, which of the following is TRUE regarding the registration of securities? A)State registration by coordination is available only if a federal registration statement has been filed under the Securities Act of 1933 in connection with the same offering. B)The Administrator may require that a prospectus be delivered to every purchaser of a registered security no sooner than the time at which the security is delivered. C)The effectiveness of a registration statement assures the accuracy of the information contained in the statement. D)Registration by coordination becomes effective on a date ordered by the Administrator.

A)State registration by coordination is available only if a federal registration statement has been filed under the Securities Act of 1933 in connection with the same offering. Registration by coordination becomes effective simultaneously with the federal registration. A prospectus may be delivered at or prior to the time actual delivery of the security is made. The act prohibits any statement or implication that registration involves approval of accuracy of facts by the Administrator. The federal registration statement is what the state registration is being coordinated with.

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)Submitting fingerprints B)Filing an application for registration C)Paying the filing fees D)Taking and passing an examination

A)Submitting fingerprints Fingerprints are not a specific requirement of the Uniform Securities Act.

In general, the Administrator would require that a broker-dealer's social media policies A)be committed to writing and communicated firmwide B)be updated at least once every 3 years C)be limited to defining the responsibilities of supervisory personnel D)be left up to the manager of each branch office

A)be committed to writing and communicated firmwide Although NASAA does not yet have a Model Rule dealing with social media, individual states have developed policies, and most of them mirror FINRA's, which requires that a firm's social media policies be in writing and made known to all in the company. It is not just supervisory personnel who must know the policy; any employee is subject to it. Updating every 3 years is not nearly frequent enough in this dynamically changing industry.

A manufacturing company is in the process of registering a securities issue with the SEC. In order to make the shares available for sale in this state, the method of registration that would most likely be used is: A)coordination. B)notification. C)qualification. D)notice filing.

A)coordination. Coordination is the method used for nonexempt companies that are registering with the SEC. Qualification is for intrastate registration of those companies not registered with the SEC. Notice filing is the procedure whereby federal covered investment companies notify the states in which they want to issue shares and to whom they must pay a fee.

A federally chartered credit union is domiciled in Texas. The credit union is making an offering of securities in Nebraska. To comply with the Uniform Securities Act's exclusion from the definition of agent, any individual offering the security in Nebraska: A)could not sell without being an agent. B)would have to receive only nominal commissions. C)would have to be an employee of a broker-dealer registered in Texas. D)would have to be an employee of a broker-dealer registered in Nebraska.

A)could not sell without being an agent. It is unusual to have an answer set up this way, but it does happen sometimes on the exam - "to comply with" and then there is no way to comply. First of all, the USA's exclusions from the t\definition of agent only apply to individuals working for the issuer, never broker-dealers. Then, the exclusion only applies when selling the following exempt securities in non-exempt transactions: US government and municipal securities; Securities of governments with which the United States has diplomatic relationships; Securities of US commercial banks and savings institutions or trust companies (when not engaged in securities-related broker-dealer activities; Commercial paper rated in the top three categories by the major rating agencies with denominations of $50,000 or more with maturities of nine months or less; and Investment contracts issued in connection with employee's stock purchase, savings, pensions, or profit-sharing plans. Selling other exempt securities, such as those issued by a federal chartered credit union, on behalf of the issuer, requires one to become registered as an agent of the issuer. Don't confuse this with the exemption offered in the case of exempt transactions. In that case, regardless of whether the security is exempt or not, if an individual's only sales activity while representing an issuer is in exempt transactions, then the exclusion from the definition of an agent applies. It is obviously a much broader exemption than when selling exempt securities.

Unless renewed, registrations of associated persons of a broker-dealer under the Uniform Securities Act expire: A)every December 31. B)two years from their effective date. C)one year from their effective date. D)registrations need not be renewed.

A)every December 31. Registrations under the Uniform Securities Act expire every December 31 unless they are renewed.

f an agent representing a broker-dealer located in Utah wishes to solicit business in California, under the Uniform Securities Act, the agent would: A)have to register in California. B)be allowed to solicit if the securities are exempt. C)not have to register if the broker-dealer is registered in California. D)not have to register in California.

A)have to register in California. Typically, an agent, when representing the broker-dealer to solicit securities transactions, must register in every state where business is conducted even if the securities or the transactions are exempt.

Your friend is a licensed life insurance agent whose client wants to purchase a variable annuity. You are a licensed securities and insurance agent, and your friend wants you to sell the policy and split commissions with him. Splitting commissions: A)in variable annuities is allowable only if the agents involved are both licensed to sell life insurance and maintain their securities licenses at the same or affiliated broker-dealers. B)in variable annuities is allowable only if the agents involved are both licensed to sell life insurance and maintain securities licenses with broker-dealers registered with the Administrator. C)would be allowable if the securities representative receives at least 60% of the commission and the insurance agent receives no more than 40%. D)is an unethical trade practice.

A)in variable annuities is allowable only if the agents involved are both licensed to sell life insurance and maintain their securities licenses at the same or affiliated broker-dealers. You must be licensed in both insurance and securities to sell variable annuities or to split commissions. Commissions on securities transactions may only be split with registered agents of the same or affiliated broker-dealers.

If persons other than the original person entering the post can comment on social media, the content is considered A)interactive B)mobile C)flexible D)static

A)interactive One of the characteristics of interactive content, as opposed to static content, is that persons other than the original author may make comments.

Mountain High Securities is a broker-dealer registered in Wyoming and Colorado with their principal office located in Colorado. With reference to the Uniform Securities Act, it would be correct to state that: A)meeting the recordkeeping requirements of Colorado is sufficient even if those of Wyoming are more stringent. B)it is required that any broker-dealer meet the recordkeeping requirements of each state in which they are registered. C)the Administrator of Colorado would have to approve of the broker-dealer method of recordkeeping. D)the books and records could not be kept in digital form.

A)meeting the recordkeeping requirements of Colorado is sufficient even if those of Wyoming are more stringent. For BDs registered in more than one state (who are not SEC Registered and, in this question, one must assume they are not), meeting the requirements of their "home" state, in this case Colorado, is sufficient anywhere they are registered. However, one of the things the Administrator does not do is approve or disapprove of the recordkeeping method used. If they were SEC registered, then all they have to do is meet the SEC's requirements.

If ABC Brokers, Inc., has its license canceled, an agent for ABC may: A)not sell any securities because her license is automatically canceled with that of her broker-dealer. B)continue to conduct business because ABC's license was canceled, not hers. C)continue to conduct business until employed by another broker-dealer, who will then renew her license. D)continue to sell only exempt securities until employed by a properly registered broker-dealer.

A)not sell any securities because her license is automatically canceled with that of her broker-dealer. An agent for ABC may not sell any securities because her license is automatically canceled with that of ABC Brokers, Inc. Agents cannot sell securities unless they are associated with a licensed broker-dealer.

A closed-end investment company is registered under the Investment Company Act of 1940. Its shares trade on the Nasdaq Stock Market. To qualify their shares for sale in the state, they would probably use: A)notice filing. B)supplementation. C)coordination. D)qualification.

A)notice filing. Regardless of where shares of this closed-end investment company trade, like all investment companies registered under the Investment Company Act of 1940, it is a federal covered security. The company is basically exempt from state registration and is only required to follow a procedure known as notice filing.

An agent of a broker-dealer registered in Illinois terminates his employment to accept a new position with broker-dealer who is also registered in Illinois. If his previous employer fails to notify the state Administrator of the termination, the agent must: A)notify the Administrator in Illinois of his termination. B)notify his new employer that he has terminated his registration. C)notify the Administrator only if he learns that his previous employer has failed to notify the Illinois securities Administrator. D)not seek employment with another broker-dealer until his registration is renewed.

A)notify the Administrator in Illinois of his termination. When an agent begins or terminates a connection with a broker-dealer, the agent as well as the broker-dealer must promptly notify the Administrator. The agent has no responsibility to insure that the previous employer has notified the Administrator.

GEMCO Advisers has $18 million in assets under management and is currently registered in 3 states. To reach their goal of becoming a federal covered investment adviser, GEMCO employs 2 individuals to solicit prospective clients. These 2 individuals would be permitted to solicit for GEMCO: A)once they become properly licensed as investment adviser representatives of GEMCO Advisers. B)without becoming licensed because they are only soliciting, not giving investment advice. C)once they become properly licensed as investment adviser representatives of a properly licensed investment adviser. D)once they become properly licensed as investment adviser representatives of a federal covered investment adviser.

A)once they become properly licensed as investment adviser representatives of GEMCO Advisers. Under the USA (GEMCO is a state registered adviser), any individual used as a solicitor for an investment adviser is considered to be an employee requiring registration as an IAR of that IA.

If two agents of a broker-dealer agree to work together as a partnership in soliciting business and they agree to split commissions, this practice is: A)permitted. B)in violation of the Uniform Securities Act's prohibition against sharing in the profits of an account. C)permitted only if a principal of the firm audits the partnership's financial performance. D)permitted, but only with the prior written consent of the affected clients.

A)permitted. There is nothing in the USA that prohibits agents registered with the same broker-dealer from forming a partnership to conduct business or solicit clients. Under the USA, a principal of the firm need not audit the financial performance of such an arrangement. It is considered an unethical business practice for agents who are not licensed with the same or affiliated broker-dealers to share commissions.

The Uniform Securities Act authorizes the Administrator to make certain demands of broker-dealers. In general, the Administrator would not require a broker-dealer to A)post a surety bond if it does not have investment discretion over client accounts or do not maintain custody of customer funds and/or securities. B)promptly file a correcting amendment to any document on file with the Administrator which becomes inaccurate or incomplete in any material respect. C)publish an announcement of the application for registration in a newspaper published in the state. D)file various financial reports.

A)post a surety bond if it does not have investment discretion over client accounts or do not maintain custody of customer funds and/or securities. The question asks for something that cannot be required by the Administrator. The other choices are requirements you should memorize. In general, the Administrator can require a bond only if registrants have custody or discretion.

A prospectus for securities registered by qualification must be given to each offeree: A)prior to or concurrent with the sale. B)prior to or concurrent with the effective date. C)only upon request of the offeree. D)prior to or concurrent with the filing of the registration statement.

A)prior to or concurrent with the sale. There is no prospectus prior to or concurrent with the filing. Since the prospectus is not available until the effective date, one can't be distributed prior to the effective date.

All of the following statements are consistent with the Uniform Securities Act EXCEPT: A)state Administrators do not require consent to service of process to be submitted with notice filings for covered securities. B)any security may be registered with the state by the procedure known as registration by qualification. C)a security for which a registration statement is filed under the Securities Act of 1933 may simultaneously register with the state by the procedure known as registration by coordination. D)state Administrators may require federal covered investment companies to file documents with the Administrator using a procedure known as notice filing.

A)state Administrators do not require consent to service of process to be submitted with notice filings for covered securities. The Administrator will require the filing of a consent to service of process with any securities registration. If required by the Administrator, notice filing is the procedure followed by federal covered securities. Any security may be registered by qualification, and coordination is the simultaneous registration with the SEC and the states.

One common characteristic that face-amount certificate companies, unit investment trusts, and management investment companies that are registered with the SEC under the Investment Company Act of 1940 have is that: A)state registration is accomplished by notice filing. B)ownership interests are redeemable upon request. C)distributions are required to be reinvested at net asset value. D)there is no active secondary market for their ownership interests.

A)state registration is accomplished by notice filing. These are the three types of investment companies described in the Investment Company Act of 1940. All are federal covered securities, but unlike the others, they are generally required to do a notice filing with the Administrator of each state in which their interests are sold.

Under the Uniform Securities Act, registration by coordination becomes effective: A)when the registration with the SEC becomes effective. B)immediately. C)in 30 days. D)in 10 days.

A)when the registration with the SEC becomes effective. The registration by coordination becomes effective at the same time it is released (made effective) by the SEC, provided it was filed with the Administrator, in most states at least ten days before the SEC effective date.

ABC Securities is a 2-office broker-dealer in Idaho that intends to underwrite an initial public offering of one million shares of stock for Circular, Inc. If the issue will be offered exclusively to residents of Idaho, registration of this offering: A)will most likely occur by qualification. B)will most likely occur by coordination. C)is not required because of the de minimis test. D)will most likely occur by notice filing.

A)will most likely occur by qualification. An issue done solely within 1 state (intrastate offering) is registered using qualification. Notice filing is used by certain issues of federal covered securities, primarily investment companies. Coordination is the simultaneous registration on both the federal and state level; neither of those 2 could possibly apply to the Circular offering.

Who must file a consent to service of process

ANYONE looking to register or making a notice filing

When material info changes, info should be updated when

ASAP, but there is no set time

Effective date of reg by Qual set by

Admin

USA limits agents so single employment by BD unless

Admin authorizes, or the BD are under common control

USA specifically excludes _ from def of BD

Agents, issuers, banks

During the registration process, an investment adviser representative must provide the state Administrator with which of the following? Consent to service of process. Properly completed application. Copy of recent tax returns. A)II and III. B)I and III. C)I, II, and III. D)I and II.

D)I and II. The application process for an agent's registration requires the agent to provide a Form U4 application, a consent to service of process, and a filing fee. Tax returns and business plans are not required.

A third-party post has been made on a broker-dealer's Facebook page. If the firm has involved itself in the preparation of the content, this would be known as A)misrepresentation B)replacement C)disgorgement D)entanglement

D)entanglement The entanglement theory means the firm or its personnel is entangled with the preparation of the third-party post. A similar concept is that of adoption. This is when the broker-dealer explicitly or implicitly endorsed or approved the content posted by the third party.

Registration renewal occurs

Annually

How much does the admin require for surety bonds

Any amount as long as it doesn't exceed amount set by SEC

An investment adviser is registered in States A and B with their principal office in State B. The Administrator of State A can request to see: A)sales records relating to clients who are residents of State B. B)internal communications regarding the company's participation in a local charitable event. C)advertisements run in State A. D)proof that the IA meets State A's financial and recordkeeping requirements.

C)advertisements run in State A. The Administrator of State A can request that advertisements placed in his state be filed because that is business relating to his state. As long as the IA meets the "home" state's financial and recordkeeping requirements, that is good everywhere.

NSMIA gives admins what powers with regards to ethics/fraud

Are exempt from reg, may be req to pay fees

If a BD is reg in more than one state, and their home state has less strict record keeping rules than the others, which one's standards do they have to follow?

As long as they are no SEC registered, meeting the requirements of their home state is enough.

66 allows _ but not _

Asset-based comp, but not until the admin actually issues a registration - also must already be associated with an Ia

A type of fraud using social media where the fraudsters pretend to be member of a group, sometimes using respected leaders of the group to spread the word about the scheme is known as A)ethnic fraud B)group fraud C)affinity fraud D)relationship fraud

C)affinity fraud This is a classic definition of how affinity fraud operates. Although it is frequently aimed at ethnic groups, there is no such term as ethnic fraud.

When must records be available for admin to examine

At anny time during regular business hours

When can a prospectus be delivered

At or prior to a sale

Which of the following securities offerings most likely would register by coordination? A)An IPO for a company offered under the terms of a Rule 147 exemption. B)An IPO whose shares will be traded on the OTC Bulletin Board. C)Shares offered by an open-end investment company registered under the Investment Company Act of 1940. D)A company whose stock is traded on Nasdaq Stock Market.

B)An IPO whose shares will be traded on the OTC Bulletin Board. Coordination is used when an issue will be registered at both the federal and state levels. Stocks on the OTCBB require registration with SEC and any states in which they will be offered. All Nasdaq stocks and mutual funds are federal covered securities, so they are exempt from state registration. Rule 147 is the intrastate exemption requiring state, but not federal, registration.

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? A)Ten days. B)30 days. C)Seven days. D)Five days.

B)30 days. Registration becomes effective 30 days after the application is filed unless the Administrator begins a proceeding or issues a stop order before that time. The Administrator may specify an earlier date, or if an application must be amended, the Administrator may extend the date to 30 days after the amendment was filed.

When it comes to social media, agents need to understand the difference between interactive and static content. Which of the following would be considered static content? A)Comments on a Facebook posting B)A broker-dealer's profile posted on Facebook C)Tweets D)Emails sent to clients

B)A broker-dealer's profile posted on Facebook Static content is content that remains posted until it is changed by the firm or individual who established the account. Interactive content is generally real-time communications, such as the other three choices shown here.

Under the Uniform Securities Act, which of the following is a broker-dealer? A)A credit union that sells its own stock. B)A corporation that sells interests in an oil and gas limited partnership to investors with the proceeds going to the issuer. C)An issuer. D)An agent.

B)A corporation that sells interests in an oil and gas limited partnership to investors with the proceeds going to the issuer. A broker-dealer is any person that buys or sells for the accounts of others or for his own account. In this case, an entity structured as a corporation is selling , on behalf of the issuer, a security in the form of limited partnership units and is therefore a broker-dealer. A broker-dealer is not an issuer or an agent.

Which of the following must be registered under state blue-sky laws? I. Investment adviser representatives. II. Broker-dealers. III. Securities issued by the US government. IV. Securities issued by a municipality not in the state. A)I and IV. B)I and II. C)I, II and IV. D)III and IV.

B)I and II. Broker-dealers and investment adviser representatives, whether with state or federal covered IAs, are required to register with their states. U.S. government and municipal issues are exempt, and therefore, do not have to be registered.

As defined in​ the Uniform Securities Act, which of the following statements is TRUE regarding an agent? A)An agent may be a broker-dealer. B)An agent represents a broker-dealer or an issuer in effecting or attempting to effect purchases or sales of securities. C)An agent may be an individual or a firm. D)If someone meets the definition of an agent, that person is exempt from registration requirements.

B)An agent represents a broker-dealer or an issuer in effecting or attempting to effect purchases or sales of securities. ​The text in Section 401(b) of the Uniform Securities Act reads, "Agent means any individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities.​ There are cases where an individual representing an issuer would not be considered an agent, such as if the transaction is exempt, but that doesn't change the definition.

Which of the following must register as an agent when representing a broker-dealer? A)A partner of a broker-dealer who has no securities sales functions. B)An employee who accepts unsolicited orders from institutional clients. C)An individual who represents an underwriter only in transactions between an issuer and the underwriter. D)The telephone switchboard operator who directs orders to the appropriate extension.

B)An employee who accepts unsolicited orders from institutional clients. An employee of a broker-dealer who accepts orders must register as an agent. The fact that it is unsolicited and/or from an institution (making them exempt transactions) has no bearing on the requirement for the individual to register as an agent. A partner of a broker-dealer with no securities sales functions and an individual who represents an underwriter only in transactions between an issuer and the underwriter need not register. Individuals whose function is strictly clerical do not register as agents.

Which of the following must register as an agent? A)An individual who sells commercial paper for ABC National Bank. B)An individual representing a broker-dealer who sells commercial paper. C)An employee of the Fed whose job is selling Treasury bonds to the public. D)An individual who is paid a commission to sell certificates of deposit for ABC National Bank.

B)An individual representing a broker-dealer who sells commercial paper. An individual who represents a broker-dealer selling commercial paper must register under the USA. Though the securities (commercial paper) are exempt, the representative must be registered as an agent of the broker-dealer. The only exceptions from the definition of "agent" apply to those who sell on behalf of issuers either of exempt securities or in exempt transactions. The commercial paper and Treasury bonds are exempt securities and the bank CDs here referred to are not of the negotiable, jumbo variety sold in the money market and are not securities so no registration is required.

Andrew voluntarily leaves his position as an agent with Gibraltar Securities. Which of the following best describes the reporting requirements relative to this termination? A)Notification to the Administrator is not required, presuming that Andrew was not terminated for cause. B)Both Andrew and the firm must notify the Administrator of Andrew's resignation promptly. C)Only Andrew must notify the Administrator, and must do so within 30 days of his resignation. D)Only the firm must notify the Administrator, and must do so within 30 days of Andrew's resignation.

B)Both Andrew and the firm must notify the Administrator of Andrew's resignation promptly. On termination of an agent from a firm with which he is registered, both the agent and the firm must notify the Administrator of such termination promptly.

Which of the following conditions would most likely meet compliance standards of state regulators? A)At a minimum, a firm that permits use of social media sites must hold biannual training as part of its continuing education obligations. B)Both supervisory personnel and agents need to understand the difference between interactive and static content. C)Only those in a supervisory role need to recognize the difference between business and nonbusiness communications. D)Maintaining an under-the-radar system of monitoring social media use by its agents is permissible when determining compliance with NASAA's rules.

B)Both supervisory personnel and agents need to understand the difference between interactive and static content. Prior to allowing associated persons to use social media for business purposes, a firm's policies and procedures must provide for personnel training and education relating to the parameters of permitted use. Both supervisory personnel and agents need to understand the difference between interactive and static content, between business and nonbusiness communications. A firm should consider requiring training in the use of social media prior to permitting use. At a minimum, a firm that permits use of social media sites must hold annual training as part of its continuing education obligations.

Under the Uniform Securities Act, which of the following statements is (are) TRUE regarding registration of broker-dealers and agents? Those defined as broker-dealers must be registered with the state before transacting any securities business. An agent of a broker-dealer must become registered with the state before transacting business. Agents of a broker-dealer are not required to be registered. A)I and III. B)I and II. C)I only. D)III only.

B)I and II. All persons defined as broker-dealers or agents under the act must register as such before transacting any securities business. It is unlawful for a broker-dealer to employ an agent unless the agent is registered.

An individual living in this state would like to become registered as an agent for a broker-dealer. Which of the following conditions must be met? The applicant must be eligible to register in this state. The broker-dealer selected must be registered in this state. The applicant must meet minimum net worth requirements. The individual must be registered as an agent in at least one other state. A)III and IV. B)I and II. C)II and III. D)I and IV.

B)I and II. An individual may not be eligible for registration. For example, if the applicant has been convicted of a felony or securities-related misdemeanor in the past ten years, registration will be denied. An agent may only be registered with a broker-dealer that is also registered in this state. Agents have no minimum net worth requirements.

An agent is registered in Illinois and Ohio. One of her substantial clients has just moved from Ohio to Arizona, and the agent would like to continue to do business with her. Under the Uniform Securities Act, which of the following statements is TRUE? The agent's broker-dealer must already be registered in Arizona or complete the Arizona registration process within a time period specified by the act. The agent must complete the Arizona registration process within a time period specified by the act. The agent must ask the Ohio Administrator to request reciprocal registration from the Arizona Administrator. The agent must suggest that the client maintain a mailing address, such as a post office box, in Ohio. A)I and IV. B)I and II. C)III and IV. D)II and III.

B)I and II. The USA permits broker-dealers and their agents to continue to do business with existing customers who change their state of residence, as long as registration in the new state takes place within a reasonable period of time. This time period varies from state to state but is generally 30 days. Since an agent's registration is not valid without a broker-dealer, the agent and the agent's broker-dealer must be registered in Arizona for the relationship with this customer to continue. There is no such thing as reciprocal registration.

Which of the following would be an agent under the terms of the Uniform Securities Act? I. A sales representative of a licensed broker-dealer who sells secondary securities to the general public. II. An assistant to the president of a broker-dealer who, for administrative purposes, accepts orders on behalf of senior partners. III. A subsidiary of a major commercial bank registered as a broker-dealer that sells securities to the public. IV. An issuer of nonexempt securities that are registered in the state and sold to the general public. A)I and IV. B)I and II. C)II and IV. D)II and III.

B)I and II. Under the USA, only an individual can be an agent (a person who sells securities for a broker-dealer). An administrative person, such as the assistant to the president of a broker-dealer, is considered an agent if that individual takes securities orders from the public. Corporate entities, broker-dealers, and issuers are all excluded from the definition of an agent.

Which of the following statements regarding agent registration under the Uniform Securities Act are TRUE? In the absence of any action by the Administrator, the effective date of a registration is noon of the 30th day. The Administrator may initiate a disciplinary action within 2 years of an agent's withdrawal of registration. The administrator may request the agent furnish a statement of assets and liabilities. If, before the effective date of the registration, the Administrator requires amendments to the application, the registration will be considered to have first been filed upon filing of those amendments. A)III and IV. B)I and IV. C)II and III. D)I and II.

B)I and IV. Normally, registration of persons becomes effective at noon of the 30th day following filing. If the Administrator requires the filing of amendments, the clock starts over again with the filing of those amendments. Agents do not have financial requirements and the Administrator has a maximum of one year after termination to initiate any actions.

Under the Uniform Securities Act, any securities registration statement must include: the amount of securities to be offered in that state. a list of the other states in which the security will be registered. a copy of the prospectus or offering circular. A)I and III. B)I, II and III. C)II and III. D)I and II.

B)I, II and III. A registration statement must include all three items shown, plus any adverse finding by any court, any Administrator, or the SEC.

One of the terms defined in the Uniform Securities Act is "broker-dealer". Which of the following is NOT included in that definition? An individual employed by a corporate entity to open new customer accounts for the purpose of trading securities. A business entity seeking to raise additional capital using the regulated securities markets. A person whose primary function is buying securities for his own account and for the accounts of others. A person whose primary function is providing advice on what assets belong in clients' investment portfolios. A)I, II, III and IV. B)I, II and IV. C)III and IV. D)II and III.

B)I, II and IV. A broker-dealer is defined as a person in the business of effectuating securities transactions for its own account or the account of others. Those employed to open new accounts are defined as agents. Those seeking to raise new capital are issuers, and a person who provides investment advice is an investment adviser.

Which of the following are required to provide a consent to service of process to the Administrator in a state in which registration is sought? An agent employed out of state but who seeks registration in a state in which business is conducted. A federal covered investment company not required to be registered in a state in which business is conducted but required to supply notice filing materials by the state Administrator. A broker-dealer registered in 25 states that seeks registration in a 26th state. An investment adviser with less than $25 million of assets under management who is not covered by federal legislation. A)I and III. B)I, II, III and IV. C)II and IV. D)I, II and IV.

B)I, II, III and IV. Every legal or natural person seeking registration or making a notice filing must supply a consent to service of process with their registration applications. For example, a federal covered investment company, while covered under federal law, need not register with the state administrator but must submit notice filings materials that include a consent to service of process.

As defined in the NSMIA, federal covered securities would include open-end investment companies registered under the Investment Company Act of 1940 closed-end investment companies registered under the Investment Company Act of 1940 that trade on the OTC Bulletin Board bonds listed on the ​OTC-Link where the company's common stock trades on Nasdaq Bonds issued by the Province of Ontario A)I, II, III, and IV B)I, II, and III C)I and II D)III and IV

B)I, II, and III Under the NSMIA, federal covered securities include all investment companies registered under the Investment Company Act of 1940, regardless of where they trade. Any stock listed on Nasdaq is federal covered and that makes any security equal to or senior (like their bonds) also federal covered, regardless of where they trade. Canadian municipal securities are not federal covered (although under the Uniform Securities Act they are exempt securities).

If a broker-dealer in Iowa addresses 15 solicitations to potential customers in the nearby Nebraska town of Middleton, and the return address on the mailings is that of the broker-dealer's satellite office in Middleton, which of the following statements is TRUE? The broker-dealer does not have to register in Nebraska. The broker-dealer must register in Iowa. The broker-dealer must register in Nebraska. The broker-dealer does not have to register in Iowa. A)I and II. B)II and III. C)III and IV. D)I and IV.

B)II and III. Under the USA, a broker-dealer must register in any state in which it has an office or conducts business with noninstitutional clients.

f a broker-dealer in Iowa addresses 15 solicitations to potential customers in the nearby Nebraska town of Middleton, and the return address on the mailings is that of the broker-dealer's satellite office in Middleton, which of the following statements is TRUE? The broker-dealer does not have to register in Nebraska. The broker-dealer must register in Iowa. The broker-dealer must register in Nebraska. The broker-dealer does not have to register in Iowa. A)I and II. B)II and III. C)III and IV. D)I and IV.

B)II and III. Under the USA, a broker-dealer must register in any state in which it has an office or conducts business with noninstitutional clients.

Differences between static and interactive content on social media include Only static content can be reused by others Only static content needs pre-approval Only static content can be changed by the person who originated it Only interactive content can be commented on by others A)II and III B)II and IV C)I and III D)I and IV

B)II and IV Static content requires pre-approval. Interactive content can be reused by others and can be commented on by others. Both static and interactive content can be changed by its originator, but static can only be changed by its originator and interactive by the originator or others.

Which of the following statements referring to renewal of a broker-dealer's registration under the Uniform Securities Act are CORRECT? Annual renewal takes place on the anniversary of the registrant's initial registration. Each renewal application must be accompanied by the appropriate fee. Each renewal application must be accompanied by a consent to service of process signed by an authorized supervisory person of the firm. Registrations expire December 31 unless renewed or canceled. A)I and III. B)II and IV. C)II and III. D)I and IV.

B)II and IV. The consent to service of process is filed with the initial application for registration and becomes a permanent part of the registrant's file. The USA states that all registrations of persons expire on December 31 unless renewed, withdrawn, or canceled.

Under the Uniform Securities Act, one method of securities registration is Qualification. When that method is used, which of the following statements is CORRECT? The registration is valid for one year from the effective date. The registration is valid for one year from the effective date unless the underwriter or issuer still has some unsold shares. The registration is valid until the next December 31st. The registration statement may be amended to increase the number of shares in the offering as long as the public offering price and the underwriter's compensation is not changed. A)I and IV. B)II and IV. C)I and III. D)II and III.

B)II and IV. Under the USA, when a security is registered, the registration is valid for one year after the effective date. However, the act provides that if the issuer or underwriter still has unsold shares from the offering, the effective date may be extended so this is a more accurate choice. The act also allows the registration statement to be amended to allow for an increase in the number of shares to be offered as long as the public offering price and the underwriter's compensation is not changed.

Which of the following statements regarding broker-dealer registration under the Uniform Securities Act are TRUE? I. In the absence of any action by the Administrator, the effective date of a registration is noon of the 45th day. II. The Administrator may initiate a disciplinary action within two years of a broker-dealer's withdrawal of registration. III. The Administrator may request that the broker-dealer furnish a statement of assets and liabilities. IV. If, before the effective date of the registration, the Administrator requires amendments to the application, the registration will be considered to have first been filed upon filing of those amendments. A)I and IV. B)III and IV. C)II and III. D)I and II.

B)III and IV. Normally, registration of persons becomes effective at noon of the 30th day following filing. If the Administrator requires the filing of amendments, the clock starts over again with the filing of those amendments. Broker-dealers have financial requirements, and the Administrator has a maximum of 1 year after termination to initiate any actions.

Which of the following statements regarding broker-dealer registration under the Uniform Securities Act are TRUE? In the absence of any action by the Administrator, the effective date of a registration is noon of the 45th day. The Administrator may initiate a disciplinary action within two years of a broker-dealer's withdrawal of registration. The Administrator may request that the broker-dealer furnish a statement of assets and liabilities. If, before the effective date of the registration, the Administrator requires amendments to the application, the registration will be considered to have first been filed upon filing of those amendments. A)I and IV. B)III B)III and IV. and IV. C)II and III. D)I and II.

B)III and IV. Normally, registration of persons becomes effective at noon of the 30th day following filing. If the Administrator requires the filing of amendments, the clock starts over again with the filing of those amendments. Broker-dealers have financial requirements, and the Administrator has a maximum of 1 year after termination to initiate any actions.

XYZ is a registered broker-dealer with its lone office located in Texas, under which of the following circumstances must it also register in Louisiana? XYZ's only dealings in Louisiana are directly with issuers of securities in Louisiana. XYZ engages in extensive transactions with the largest insurance company in Louisiana. XYZ routinely sells nonexempt securities to extremely high net-worth residents of Louisiana. XYZ purchases exempt securities from extremely high net-worth residents of Louisiana for resale to residents of Texas. A)II, III and IV. B)III and IV. C)I only. D)I and II.

B)III and IV. Under the Uniform Securities Act, broker-dealers must register in any state that they engage in securities transactions with individual investors. The net worth of the individual is irrelevant. Broker-dealers with no offices in the state who engage in transactions in the state with certain institutional investors, such as insurance companies or investment companies, need not register in that state. Transactions between the issuer and a broker-dealer are exempt transactions.

Under the Uniform Securities Act, which of the following is (are) investment advisers? Jane advises customers regarding the value of gold and silver coins. The Trust Department of ABC Bank provides investment advice to its clients. Tom writes a newspaper column that analyzes and recommends securities. Jill is an attorney specializing in estate planning who, as a side job, structures portfolios for the beneficiaries of her deceased clients at a reduced fee. A)I and IV B)IV only C)I and III D)II, III and IV

B)IV only Jane's advice does not concern securities; banks are excluded from the definition; Tom's advice is not specific on the basis of the situation of each client (impersonal advice). While an attorney is generally excluded, Jill is giving investment advice for a fee in a manner that is not incidental to her legal practice.

In order to be offered for sale in a particular state, all of the following may be required of a federal covered security EXCEPT: paying a filing fee. providing a consent to service of process. submitting copies of any information filed with the SEC. using a state sanctioned legend on the offering documents. A)I and II. B)IV only. C)I, II and III. D)II and III.

B)IV only. Federal covered securities may be required to pay a filing fee, provide a consent to service of process and, if requested, submit copies of any and all documentation filed with the SEC. However, requiring a legend or other similar statement is beyond the jurisdiction of the state on a federal covered security.

When filing the consent to service of process, which of the following is TRUE? A)It expires simultaneously with the registration on December 31. B)It is supplied with the initial registration and remains on file permanently. C)It must be filed annually on the dates specified by the Administrator. D)It is not required of investment adviser representatives, only investment advisers.

B)It is supplied with the initial registration and remains on file permanently. The consent to service of process is supplied with the initial registration and remains on file permanently.

Which of the following terms pertains to registration with the Administrator of a mutual fund, closed-end investment company, or unit investment trust that is registered under the Securities Act of 1933 and also registered as an investment company under the Investment Company Act of 1940? A)Coordination. B)Notice filing. C)Qualification. D)Notification.

B)Notice filing. Federal covered securities (securities listed on national stock exchanges, Nasdaq Stock Market or investment companies registered under the Investment Company Act) are exempt from state registration. A notice filing may be required along with a payment of fees based on a schedule set forth by the Administrator.

Having received an offer of a large hiring bonus, an agent of XYZ Securities, a broker-dealer registered in the state, wishes to terminate her registration and register with ABC Investments, Inc., a different broker-dealer in her state. Under the requirements of the Uniform Securities Act, which of the following statements regarding notification to the Administrator is NOT true? A)The agent can rely on her new employer to notify the Administrator. B)Only the agent needs to notify the Administrator. C)The agent's application for registration with her new employer must be accompanied by the appropriate fee. D)The agent can rely on her former employer to notify the Administrator.

B)Only the agent needs to notify the Administrator. Termination of an agent's registration with the state requires both the agent and the employing broker-dealer to notify the Administrator. When going to a new firm, the new employer must give notice as well. An agent can rely on the firms to give notification because failure to do so is a prohibited practice on their part and can lead to disciplinary action. Unlike a successor firm, any time an agent changes broker-dealers, a new licensing fee is due.

How quickly must a broker-dealer notify the Administrator if material information relating to that broker-dealer's registration should change? A)No later than the time of license renewal. B)Promptly. C)Within 30 days. D)Within 24 hours.

B)Promptly. If the information contained in any document filed with the Administrator is or becomes inaccurate or incomplete in any material respect, the registrant must file a correcting amendment promptly.

If a nonexempt issuer wants to register simultaneously with the state and the SEC, which method would be used? A)Notice filing for certain federal covered securities. B)Registration by coordination. C)Registration by notification. D)Registration by qualification.

B)Registration by coordination. Registration by coordination is done concurrently with registration at the federal level. Registration by qualification is the method for local companies sold only within the state.

Under the Uniform Securities Act, which of the following statements regarding an agent's registration is CORRECT? A)Agents may be licensed in a state even if their broker-dealer is not. B)Revocation of the registration of that agent's broker-dealer will result in that agent's effective registration being put "on hold." C)If the broker-dealer with which that agent is registered should have its registration revoked, the agent's license will be held by the Administrator and the agent will be required to register with an active broker-dealer no later than December 31. D)Individuals whose only securities activity with a broker-dealer is trading for the firm's proprietary account are not required to register as agents.

B)Revocation of the registration of that agent's broker-dealer will result in that agent's effective registration being put "on hold." An agent of a broker-dealer is only active when that broker-dealer's registration is in force.

When using the process of registration by coordination under the Uniform Securities Act, issuers shall simultaneously submit to the state, the documents filed with the SEC under the: A)Investment Company Act of 1940. B)Securities Act of 1933. C)National Securities Markets Improvement Act (NSMIA). D)Securities Exchange Act of 1934.

B)Securities Act of 1933. Under the Uniform Securities Act, an issuer registering its securities with the Securities and Exchange Commission (SEC) in accordance with the procedures found in the Securities Act of 1933 shall use the documents it submits to the SEC in its concurrent registration with states in which it plans to offer its securities.

Which of the following securities of Synergy, Inc., (an issuer whose stock trades on the Nasdaq Stock Market) does NOT have an exemption from registration with the state? A)Synergy, Inc., debentures. B)Synergy's oil and gas limited partnership units (Synergy, Inc., is the general partner). C)Synergy, Inc., senior bonds. D)Synergy, Inc., preferred stock.

B)Synergy's oil and gas limited partnership units (Synergy, Inc., is the general partner). Synergy's oil and gas limited partnerships are not issued by Synergy, Inc.; Synergy is only the general partner. The oil and gas partnerships are issued by separate legal entities; they do not have the blue-sky exemptions. They must be registered in the states in which they are sold, unless they have some other exemption. Any security equal or senior in claim to an exempted common stock is exempted as well. The company's preferred stock, senior bonds, and debentures all have blue-sky exemptions from state registration because the company's common stock is traded on the Nasdaq Stock Market.

All of the following activities and communications would fall outside the definition of a recommendation EXCEPT A)a broker-dealer's website places a search engine in a prominent spot on its landing page that can be used to access charts of multiple stocks in the large-cap sector B)a broker-dealer sends an email to its more conservative clients stating this would be an excellent time to invest in public utility stocks, and includes a list of those paying the highest dividends C)a broker-dealer's website was created to be available to customers that contains a link to an electronic library of research reports that contains buy-sell recommendations from the author of the research reports D)a broker-dealer provides research tools on its website that allow customers to screen through all Nasdaq securities

B)a broker-dealer sends an email to its more conservative clients stating this would be an excellent time to invest in public utility stocks, and includes a list of those paying the highest dividends Specificity, such as a list of securities, invariably results in a communication being deemed a recommendation. All of the other choices given would generally be viewed as falling outside the definition of recommendation.

All of the following activities and communications would fall outside the definition of a recommendation EXCEPT A)a broker-dealer's website places a search engine in a prominent spot on its landing page that can be used to access charts of multiple stocks in the large-cap sector B)a broker-dealer sends an email to its more conservative clients stating this would be an excellent time to invest in public utility stocks, and includes a list of those paying the highest dividends C)a broker-dealer's website was created to be available to customers that contains a link to an electronic library of research reports that contains buy-sell recommendations from the author of the research reports D)a broker-dealer provides research tools on its website that allow customers to screen through all Nasdaq securities

B)a broker-dealer sends an email to its more conservative clients stating this would be an excellent time to invest in public utility stocks, and includes a list of those paying the highest dividends Specificity, such as a list of securities, invariably results in a communication being deemed a recommendation. All of the other choices given would generally be viewed as falling outside the definition of recommendation.

Which of the following is required to register as a broker-dealer? A)A savings and loan association. B)A trust company. C)A person who effects transactions for the accounts of others. D)A bank.

C)A person who effects transactions for the accounts of others. A person buying and selling securities for customers' accounts is deemed a broker-dealer under the Uniform Securities Act and must be registered as such. Specifically excluded from the definition of a broker-dealer are banks, trust companies, and savings and loan associations.

Registration as a broker-dealer under the USA would generally require all of the following EXCEPT: A)meeting minimum net capital requirements. B)agreeing to provide the Administrator with quarterly financial statements. C)posting a bond in the amount determined by the Administrator. D)filing the appropriate application accompanied by a consent to service of process.

B)agreeing to provide the Administrator with quarterly financial statements. There is no set schedule regarding financial reporting to the Administrator, who reserves the right to inspect a broker-dealer's books at any time. All of the other choices are usually found in the registration requirements of broker-dealers.

When a broker-dealer acts in the capacity of a principal in a trade, the firm has acted A)for the benefit of the client B)as a contra-party to the trade C)in an unethical manner D)as an agent

B)as a contra-party to the trade In every trade, there are 2 principals—the buyer and the seller. If the broker-dealer is one of the principals (either buyer or seller), the firm is the contra-party to the other side of the trade.

Under the National Securities Markets Improvement Act of 1996 (NSMIA), investment companies registered under the Investment Company Act of 1940 are required to register: A)as securities at both state and federal levels. B)as securities at the federal level only. C)as securities at the state level only. D)as exempt securities, at neither state nor federal levels.

B)as securities at the federal level only. The NSMIA requires that the SEC, rather than individual states, assume responsibility for the registration and regulation of federal registered mutual funds and other investment companies. Thus, these federal registered investment companies are no longer required to register at the state level; however, they will likely have to pay state filing fees by going through the notice filing procedure.

To transact business in a state as an investment adviser representative, a person must: A)be employed by a commercial bank located in the state. B)be registered as a representative of an investment adviser and have passed the appropriate NASAA exam for IARs. C)be registered as an agent of a brokerage house and have passed the appropriate NASAA exam for IARs. D)have passed the agent's exam and taken no other exams.

B)be registered as a representative of an investment adviser and have passed the appropriate NASAA exam for IARs. To transact business in a state as an investment adviser representative, a person must be registered as a representative of an investment adviser and have passed either the NASAA Series 65 or Series 66 exam. One is not considered a registered investment adviser representative as a result of passing the Series 6 or 7 registered representative exam, or by virtue of employment with a bank.

If an incorporated entity sells nonexempt securities to public customers, receives a commission on the sale of the securities, and pays commissions to the employees who sell them, according to the USA, the corporation is a: A)broker-dealer engaging in exempt transactions. B)broker-dealer that must be registered. C)corporation selling to an employee pension fund. D)corporation selling only to sophisticated investors.

B)broker-dealer that must be registered. A broker-dealer is an entity in the business of effecting transactions in securities for its own account or for the accounts of others, and pays its sales agents commissions. Under the USA, the broker-dealer must register in the states where business is transacted.

The First Fidelity Building and Loan association, organized in State A and authorized to do business in State B, has an offering of common stock being made in State B. In order for an individual selling the offering to be excluded from the definition of agent in State B, the individual A)would have to be employed by First Fidelity B)could not sell without being an agent C)would have to be employed by a broker-dealer registered in this state D)would have to be employed by a broker-dealer registered in the other state

B)could not sell without being an agent Included in the USA's list of exempt securities are those issued by any building and loan or similar association organized under the laws of any state and authorized to do business in this state. However, they are not included in the short list of exempt securities under which individuals selling on behalf of the issuer are excluded from the definition of an agent. Had this been a bank, savings institution, or trust company, then, as long as the individual was an employee of the institution, no registration would be necessary.

Broker-dealers, investment advisers, and agents must renew their licenses with the state Administrator: A)licenses are permanent unless revoked, suspended, or canceled. B)every December 31, unless otherwise specified by state law. C)semiannually. D)annually upon the date of original registration.

B)every December 31, unless otherwise specified by state law. Under the Uniform Securities Act, registrations must be renewed every December 31. Registrations are not permanent and can be denied, revoked, or canceled according to the terms of the act.

What can be subsituted for a surety bond?

Cash or securities

One of the concerns about social media is the opportunity for affinity fraud. This occurs when A)people who have been defrauded are repeatedly subjected to offers B)fraudulent offers are aimed at groups of people who share a similar interest C)fraudulent offers are directed to investors in the same or neighboring zip codes D)individuals who have been convicted of fraud continue to target prospects

B)fraudulent offers are aimed at groups of people who share a similar interest

Content published on social media that allows for others to comment, reuse, or "like" is considered to be A)static content B)interactive content C)advertising D)unethical content

B)interactive content Interactive means that others can react to the postings—things are constantly changing. Static content is basically fixed until the author makes a change.

Under Section 401 of the Uniform Securities act, the term "agent" does not include an individual who represents an issuer in effecting transactions in a security A)issued by and representing an interest in or a debt of, or guaranteed by, any federal savings and loan association, or any building and loan or similar association organized under the laws of any state and authorized to do business in this state. B)issued by and representing an interest in or a debt of, or guaranteed by, any bank organized under the laws of the United States, or any bank, savings institution, or trust company organized and supervised under the laws of any state. C)issued or guaranteed by any federal credit union or any credit union, industrial loan association, or similar association organized and supervised under the laws of this state. D)issued by any person organized and operated not for private profit but exclusively for religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purposes, or as a chamber of commerce or trade or professional association.

B)issued by and representing an interest in or a debt of, or guaranteed by, any bank organized under the laws of the United States, or any bank, savings institution, or trust company organized and supervised under the laws of any state. An individual representing an issuer in the sale of that issuer's security is not defined as an agent if the security is issued by and representing an interest in or a debt of, or guaranteed by, any bank organized under the laws of the United States, or any bank, savings institution, or trust company organized and supervised under the laws of any state; issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency of the foregoing; any security issued or guaranteed by Canada, any Canadian province, any political subdivision of any such province, any agency of the foregoing, or any other foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer or guarantor; a promissory note, draft, bill of exchange or bankers' acceptance that evidences an obligation to pay cash within 9 months after the date of issuance, is issued in denominations of at least $50,000, and receives a rating in one of the 3 highest rating categories from a nationally recognized statistical rating organization; or any investment contract issued in connection with an employees' stock purchase, savings, pension, profit-sharing, or similar benefit plan if the Administrator is notified in writing thirty days before the inception of the plan It is not just any exempt security that qualifies the individual for the exemption - only the five listed above. A confusing point is that the individual is not an agent when the sales are made in any exemption transaction with no exceptions.

The Uniform Securities Act does NOT require registered broker-dealers to: A)file and update financial reports. B)keep all customer information for seven years. C)report promptly all new agents associated with the broker-dealer. D)file copies of advertisements and sales literature.

B)keep all customer information for seven years. The USA specifies that most broker-dealer records must be maintained for three years.

Registration statements for securities: A)are effective for at least two years from their effective dates, or longer if the securities are still under distribution by the underwriters. B)may be amended after their effective dates as to the amount of securities issued, provided that underwriting fees and the initial offering price have not changed. C)need not be filed with the Administrator if the securities are only sold in one state. D)expire on December 31 of each year and must be renewed if further sales are to be continued.

B)may be amended after their effective dates as to the amount of securities issued, provided that underwriting fees and the initial offering price have not changed. Registration of securities under the USA may be amended after their effective dates as to the amount of securities issued, provided that underwriting fees and initial offering prices have not changed. Securities registration statements remain effective for one year from their effective date, and do not expire on December 31 of each year. Registrations of agents, investment advisers, and broker-dealers expire on December 31 and need to be renewed. Registration statements are effective for one year from their effective dates (or longer if the securities are still under distribution by the underwriters).

An agent in this state would be acting illegally if he sold: A)securities guaranteed by a federal credit union organized under the laws of the state. B)nonexempt securities properly registered in a neighboring state but not registered in this state. C)federal covered securities not registered in the state. D)revenue bonds of Illinois in Florida that were not registered in Florida.

B)nonexempt securities properly registered in a neighboring state but not registered in this state. An agent cannot sell securities in a state unless they are registered or exempt from state registration. Federal covered securities, tax-exempt municipal bonds, and securities guaranteed by a federal credit union organized in the state are all exempt from registration.

Under the USA, an individual would not be considered an agent while representing the issuer in any of the following transactions EXCEPT: A)promissory notes, such as commercial paper, with a maturity of nine months or less. B)nonexempt, initial public offerings. C)investment contracts issued in connection with an employee's stock purchases, savings, pension, profit-sharing, or similar employee benefit plan. D)issuers in exempt transactions.

B)nonexempt, initial public offerings. Persons who represent nonexempt issuers of new securities, are agents under the USA unless it is stated that the transaction is exempt. Representing issuers in exempt transactions excludes the person from the definition of agent.

When an individual has successfully passed the Series 66 examination, he can: A)immediately begin soliciting investment advisory services to prospective clients. B)not engage in advisory activities until the state Administrator issues his license. C)immediately begin soliciting investment advisory services to his existing clients. D)inform his clients that he has earned the designation of registered investment adviser.

B)not engage in advisory activities until the state Administrator issues his license. Passing an exam is a prerequisite to a license, not a license in and of itself. To be licensed, an individual must also file a Form U-4, pay a state licensing fee, and pass a background check. This individual can only solicit investment advisory services when these additional requirements have been met and the Administrator has actually issued the individual a license.

An investor who trades for her own account is a(n): A)broker-dealer and must register with the state. B)public customer who does not need to register. C)agent for a broker-dealer and must register in each state doing business. D)broker-dealer who does not need to be registered at the state level.

B)public customer who does not need to register. Investors who trade solely for their own accounts are public customers who do not need to register.

Under the Uniform Securities Act, before a corporation can issue a security in a state, that security must be: A)registered with the SEC and in the state of issue. B)registered in the state or exempt from registration in the state. C)registered in one other state and with the SEC. D)exempt from registration in other states in which it is issued.

B)registered in the state or exempt from registration in the state. Before issuing a security in a state, the issuer must either register the security in the state or be exempt from registration under the Uniform Securities Act.

The Administrator may do all of the following with respect to federal covered securities EXCEPT: A)require submission of a consent to service of process. B)require that the issuer meet minimum financial standards. C)initiate enforcement action in the case of fraud committed in the Administrator's state. D)require the payment of a filing fee to the state.

B)require that the issuer meet minimum financial standards. One of the effects of the NSMIA is that a state securities Administrator may not require any financial standards be met by an issuer of federal covered securities. The Administrator, however, may initiate enforcement action, require payment of filing fees to the state, and require submission of a consent to service of process.

A broker-dealer is registered in State X. It has no offices in State Y, although it does do business in that state. Under the Uniform Securities Act, registration in State Y is required if the client is a(n): A)investment adviser. B)state employee. C)broker-dealer. D)bank.

B)state employee. Broker-dealers must always register in a state if they do business there with noninstitutional clients, regardless of the nature of the individual's employer.

Each of the following requirements is common to the registration of agents, investment adviser representatives, state registered investment advisers, and broker-dealers under the Uniform Securities Act EXCEPT: A)all must file a consent to service of process along with their application. B)the registration for all is two years in length. C)all may be required to pass a written exam. D)all may be required to post a surety bond.

B)the registration for all is two years in length. Registrations of persons renew annually each December 31st.

All of the following must be specified in a security's state registration statement EXCEPT: A)a stop order from another state that affects the offering of the security within that state. B)the total amount of the security that will be offered in other states. C)the amount of securities to be offered in the state. D)the expected use of the projected proceeds of the offering.

B)the total amount of the security that will be offered in other states. The total amount of the security to be offered in other states need not be specified although identifying those states is required. The amount of the security to be offered in the state of registration is required, as it generally provides the basis on which the registration fee is calculated. A stop order from another state that affects the offering of the security within the state must be included. The registration statement will always describe the intended use of the proceeds.

Agents work for

BD

Under the Uniform Securities Act, which of the following are elements in the definition of an investment adviser? -Advice as to investments must be in writing, not given orally. -Advice must relate to the value of securities or recommendations to purchase or sell securities. -There must be compensation for services rendered. A)I and II. B)I and III. C)II and III. D)I, II and III.

C)II and III. An investment adviser provides advice related to securities for compensation. The advice may be given orally or in writing.

Under the Uniform Securities Act, which of the following statements relating to the registration requirements of investment advisers is TRUE? A)A registration is automatically effective at noon, 30 days after the application has been filed. B)If an amendment to the registration is subsequently filed, the registration becomes effective 15 days after the amendment is filed. C)A registration becomes effective at noon, 30 days after the application has been filed, providing the registration is not in the process of denial. D)Registrations of securities professionals expire one year after their effective date, unless renewed.

C)A registration becomes effective at noon, 30 days after the application has been filed, providing the registration is not in the process of denial. A registration is effective at noon, 30 days after the application has been filed if there is no denial or stop order in process. Registrations of securities professionals expire on December 31, unless renewed. If an amendment to the registration is subsequently filed, the registration becomes effective 30 days, not 15 days, after the amendment is filed; filing the amendment starts the process anew.

Which of the following persons is defined as an agent by the Uniform Securities Act? A)Silent partner of a broker-dealer. B)Secretary of a branch office sales manager. C)Clerk at a broker-dealer who is authorized to take orders. D)Broker-dealer executive who does not solicit or transact business.

C)Clerk at a broker-dealer who is authorized to take orders. Anyone who solicits or receives an order while representing a broker-dealer is an agent. Silent partners, administrative personnel, and executives of broker-dealers with no sales responsibilities are not agents under the terms of the USA because they do not solicit or receive orders.

What document must accompany an initial registration application for those individuals required to register under the Uniform Securities Act? A)A birth certificate confirming the registrant is over 18 years of age. B)State photo identification. C)Consent to service of process. D)Proof of U.S. citizenship

C)Consent to service of process. The USA requires that a consent to service of process accompany an application for registration. Although the Administrator will generally request information about the applicant's citizenship, it is not necessary to be a US citizen. Proof of age is not a requirement.

What document must accompany an initial registration application for those individuals required to register under the Uniform Securities Act? A)A birth certificate confirming the registrant is over 18 years of age. B)State photo identification. C)Consent to service of process. D)Proof of U.S. citizenship.

C)Consent to service of process. The USA requires that a consent to service of process accompany an application for registration. Although the Administrator will generally request information about the applicant's citizenship, it is not necessary to be a US citizen. Proof of age is not a requirement.

Which method of securities registration would most likely be used to register an initial public offering that is intended to be offered for sale in several states? A)Registration by publication. B)Notice filing. C)Coordination. D)Qualification.

C)Coordination. Since the offering will be made in more than one state, registration with the SEC is required. Coordination is concurrent registration with the SEC and the state for public offerings. Notice filing pertains to certain federal covered securities, primarily by investment companies (mutual funds).

One of the requirements of the Uniform Securities Act is that nonexempt securities must be registered prior to sale in the state unless the sale is made in an exempt transaction. Which of the following would most likely register by qualification? A)Common stock issued by The First National Bank of Largeville. B)A rights offering by ABC Corporation whose common stock is listed on the NYSE. C)First mortgage bonds issued by XYZ Computers, a company whose IPO was issued under SEC Rule 147. D)An equipment trust certificate for the Great American Railroad's newest locomotives.

C)First mortgage bonds issued by XYZ Computers, a company whose IPO was issued under SEC Rule 147. SEC Rule 147 is the intrastate exemption meaning that the security registers in the state rather than the SEC. Bank stock and equipment trust certificates are exempt securities. Rights offered by a company whose stock is listed are considered federal covered securities.

With regard to a broker-dealer's use of social media, static content would be considered as a planned communication to a target audience that is generally not altered communication that does not provide for interaction with the author once published content used to engage in real-time interactive communications with a target audience a blog that gives readers the opportunity to post comments A)III and IV B)I and IV C)I and II D)II and III

C)I and II A key to recognizing static social media content is that it is usually not changed once published and does not provide a method for interaction (commenting) once published.

An individual wishing to register as an agent with a broker-dealer may have to: pass an examination. post a bond. maintain minimum net capital. meet minimum state educational requirements. A)III and IV. B)I and III. C)I and II. D)II and III.

C)I and II. In almost all cases, an individual wishing to register as an agent must pass an examination. Many Administrators require that all agents post a bond, whereas others only require bonding for those with investment discretion in customer accounts. Minimum net capital requirements apply to broker-dealers, not agents.

If Brokers, Inc., a broker-dealer registered in this state, refuses to comply with the Administrator's order to retain records for two years longer than required by the Securities Exchange Act of 1934, which of the following statements are TRUE? -The securities Administrator cannot require registrants to retain books and records longer than required by the SEC. -Brokers, Inc., is not in violation of the Securities Exchange Act of 1934. -Both the securities Administrator and Brokers, Inc., are in violation of both the Securities Exchange Act of 1934 and the Uniform Securities Act. -Brokers, Inc., must comply with orders issued by state securities regulators whether or not the orders are in compliance with the NSMIA. A)II and III. B)II and IV. C)I and II. D)I and III.

C)I and II. The securities Administrator is in violation of the National Securities Markets Improvement Act of 1996 (NSMIA), which prohibits state securities regulators from establishing requirements in addition to those required by the Securities Exchange Act of 1934.

Under the Uniform Securities Act, which of the following statements regarding the consent to service of process are TRUE? A consent to service of process makes legal process served on the Administrator as legally binding as process served on the registrant personally. Only out-of-state applicants need to file a consent to service of process. Investment advisers and investment adviser representatives must file a consent to service of process to become registered. A)I, II and III. B)I and II. C)I and III. D)II and III.

C)I and III. A consent to service of process grants legal authority for the Administrator to receive legal notices on behalf of the registrant. All applicants for registration must file a consent to service of process regardless of whether they are in-state or out-of-state advisers.

The National Securities Markets Improvement Act of 1996 (NSMIA) created a new definition known as a covered security. In general, these securities do not have to register on a state level. If XYZ common stock is listed for trading on the NYSE, which of the following XYZ securities are considered covered? XYZ participating preferred stock XYZ first mortgage bonds Warrants to purchase XYZ common stock Rights issued in advance of an offering of additional XYZ common stock A)II and III B)I and IV C)I, II, III and IV D)I, II and III

C)I, II, III and IV Common stock listed on the New York Stock Exchange is a covered security as defined in the NSMIA. Furthermore, any security equal to or senior to that common stock is considered to be covered as well. Warrants and rights are equal to the common stock and the preferred stock and mortgage bonds are senior to the common stock.

Except as limited by the Securities Exchange Act of 1934, the state securities Administrator may require, by rule or order, that broker-dealers make or maintain which of the following records? Account ledgers. Correspondence. Papers and memoranda. Blotters and books. A)I and II. B)II and III. C)I, II, III and IV. D)III and IV.

C)I, II, III and IV. The Administrator may require broker-dealers to keep and maintain account ledgers, correspondence, papers and memoranda, and blotters and books provided the state requirements do not exceed federal requirements under the Securities Exchange Act of 1934.

Broker-dealers, investment advisers, agents, and investment adviser representatives who use the internet, the World Wide Web, and similar proprietary or common carrier electronic systems to distribute information on available products and services through certain communications made on the internet, directed generally to anyone having access to the internet and transmitted through postings on Bulletin Boards, displays on home pages, or similar methods, are not deemed to be transacting business in this state for purposes of the Uniform Securities Act solely on the basis of that fact if which of the following conditions are observed? The internet communication contains a legend in which it is clearly stated that the broker-dealer, investment adviser, agent, or IAR in question may transact business in this state only if first registered, excluded, or exempted from state broker-dealer, investment adviser, agent, or IAR registration requirements, as may be the case. The internet communication contains a legend in which it is clearly stated that follow-up; individualized responses to persons in this state by the broker-dealer, investment adviser, agent, or IAR that involve either the effecting or attempting to effect transactions in securities; or the rendering of personalized investment advice for compensation, as may be, will not be made absent compliance with state broker-dealer, investment adviser, agent, or IAR registration requirements, or an applicable exemption or exclusion. The internet communication contains a mechanism, including and without limitation, technical firewalls or other implemented policies and procedures, designed reasonably to ensure that before any subsequent, direct communication with prospective customers or clients in this state, the broker-dealer, investment adviser, agent, or IAR is first registered in this state or qualifies for an exemption or exclusion from such requirement. The internet communication does not involve either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, as may be, in this state over the Internet, but is limited to the dissemination of general information on products and services being offered. A)I, II and III. B)III and IV. C)I, II, III and IV. D)I and II.

C)I, II, III and IV. With the growth of the internet, NASAA developed an interpretive order concerning broker-dealers, investment advisers, agents, and investment adviser representatives using the internet for general dissemination of information on products and services. The primary focus of this order was to set the parameters under which securities professionals could communicate on the internet or use their websites in states in which they were not registered. Meeting all of the requirements stated in the answer is necessary.

Which of the following activities are violations of the Uniform Securities Act? Arbitrage. Soliciting investors for unregistered nonexempt securities. Selling bonds of a foreign government to residents of a state other than the one in which the agent of a broker-dealer is registered and being paid a commission. An employee at a Federal Reserve Bank selling T-bonds without being registered as an agent of the issuer and not receiving a commission on those sales. A)II and IV. B)I and II. C)II and III. D)I and IV.

C)II and III. It is a violation under the USA to solicit customers for unregistered, nonexempt securities (such securities should be registered) or to sell securities in states other than where the agent of a broker-dealer is registered. This is true even if, as in this choice, the securities are exempt from registration. Payment of commissions is irrelevant; registration is required in any case. Arbitrage, the simultaneous buying and selling of the same security in different markets to take advantage of different prices, is not a violation. An individual who sells certain exempt securities, such as government securities, as a representative of the issuer, does not have to register as an agent.

According to the Uniform Securities Act, after an agent passes the Series 66 exam and the Series 7 exam, asset-based compensation is permitted: immediately. after notification of investment adviser representative status by the appropriate supervisory person of the firm. when registration has been granted by the state Administrator. when permission is received from the SEC. A)I only. B)I and IV. C)II and III. D)II and IV.

C)II and III. Passing the Series 7 licensing exam qualifies an individual to solicit securities but not to receive asset-based compensation. Once the Series 66 has been passed, the state Administrator must actually issue a registration, and the individual must be associated with an investment adviser before engaging in asset-based compensation in a particular state.

One of your clients has called you to discuss an interesting investment opportunity discovered on one of the LinkedIn groups she participates in. Which of the following factors might increase the likelihood that this is a scam? A registration statement with the SEC is available on the website of the proposed investment The purchase money must be wired to an offshore account One of the members of the group is a principal in the company being offered Bonus shares are offered for recruiting friends into the deal A)I, II, III, and IV B)II and IV C)II, III, and IV D)I and III Explanation Although not foolproof, the existence of an available SEC registration statement greatly reduces the likelihood that a deal like this is a scam. The other choices are certain red flags. Reference: 2.4.6.1.1 in the License Exam Manual Previous Next

C)II, III, and IV Although not foolproof, the existence of an available SEC registration statement greatly reduces the likelihood that a deal like this is a scam. The other choices are certain red flags.

Securities traded in which of the following marketplaces would be excluded from the definition of federal covered securities? A)American Stock Exchange. B)Toronto Stock Exchange. C)New York Stock Exchange. D)Nasdaq.

C)New York Stock Exchange. Federal covered securities include those on exchanges registered with the SEC, such as the NYSE, the AMEX, and the Nasdaq Stock Market as well as investment companies registered under the Investment Company Act of 1940.

When a broker-dealer registers with the state Administrator, which of the following persons are automatically registered as agents of the broker-dealer in the state? A)Agents registered in another state who are employed by the broker-dealer. B)Those persons employed at the broker-dealer prior to its registration in the state. C)Partners, directors, and officers of the broker-dealer. D)Persons employed by the broker-dealer who are residents of the state but employed in a state other than that of the Administrator.

C)Partners, directors, and officers of the broker-dealer. When a broker-dealer registers with the state securities Administrator, those persons who are partners, directors, or officers are automatically considered agents in the state.

Securities of a nonexempt corporate issuer that are not registered with the SEC may only be registered with the Administrator in which of the following ways? A)Coordination. B)Condemnation. C)Qualification. D)Notification.

C)Qualification.

Advanced Wealth Management, Inc., (AWM) is a new investment adviser that registers with the Administrator on February 1, 2011. Sarah Sawyer registers as an IAR of AWM also on February 1, 2011. Both AWM and Sarah renew their registrations on January 31, 2012. Which of the following statements properly describes their registration status? A)AWM's registration is renewed, but Sarah must reregister. B)Registrations are renewed with no lapse. C)Registrations lapse and both must reregister. D)Sarah's registration is renewed, but AWM must reregister.

C)Registrations lapse and both must reregister. Registration of all securities professionals expires on December 31. Failure to renew by that time leads to a lapse. Once a registration lapses, a new registration is required.

When a security registers by using coordination, the effective date is determined by the: A)underwriter. B)Administrator. C)SEC. D)issuer.

C)SEC. A security is registered by coordination when there is a simultaneous federal and state registration. Under normal circumstances, once the SEC has declared the registration effective, it is also effective in those states where the registration was coordinated.

It would not be a violation of the Uniform Securities Act for an applicant for registration as an agent to do which of the following while the application is pending? A)Conduct seminars on asset allocation. B)Limit his sales activity to immediate family members only. C)Sell fixed annuities. D)Use a preliminary prospectus to obtain indications of interest for a new issue, but wait until he is registered before accepting any orders.

C)Sell fixed annuities. While registration as an agent is pending, the applicant can take no active role in the sale or offering of securities. However, because fixed annuities are not securities, registration as an agent is not required. Yes, I know that an insurance license would be required, but, apparently, NASAA doesn't care about that.

Sharon Smith is an agent for Highwater Securities, a broker-dealer registered in all 50 states. Sharon receives an unsolicited order from a bank located in State X, a state in which she has no place of business. Under the Uniform Securities Act, A)because Sharon has no place of business in State X and the order is unsolicited, Sharon may accept the order without registering in State X B)because Sharon has no place of business in State X and the client is an institution, Sharon may accept the order without registering in State X C)Sharon must be registered in State X in order to accept the order D)because Highwater Securities is registered in all 50 states, Sharon must also be registered in all of them

C)Sharon must be registered in State X in order to accept the order Regardless of whether the security is exempt or the transaction is exempt, an agent must be licensed in any state which is the domicile of a client placing an order (unless the agent is representing a broker-dealer that is exempt from registering in that state). An agent does not have to be registered as an agent in every state the BD is, only in those where the agent expects clients to reside. Remember, there is no de minimis exemption for BDs and agents as there is for IAs and IARs.

Which of the following is required to effectuate annual renewal of the registration of an investment adviser representative affiliated with a federal covered adviser? A)Renewal notice to the SEC. B)Consent to service of process. C)State licensing fee. D)Form U-4.

C)State licensing fee. All investment adviser representatives are registered with the states, not the SEC. Renewal requires the payment of the annual renewal registration or licensing fee. The consent to service of process is a permanent document submitted with the initial application for registration.

XYZ Securities Co. is ​simultaneously ​registering as a broker-dealer with the SEC​ and several states.​ Which of the following statements regarding its registration under the Uniform Securities Act is CORRECT? A)State registrations expire annually on the anniversary of the effective date of the broker-dealer's initial registration​ with the SEC​. B)XYZ's registration in the various states will be accomplished through coordination. C)State registrations expire annually on December 31. D)Once XYZ registers in a specific state, its registration is permanent unless revoked, canceled, or terminated.

C)State registrations expire annually on December 31. State registration for all categories of securities professionals expires on December 31 of each year.​ It is securities that register using coordination, not securities professionals.

Under the USA, which of the following statements regarding the posting of surety bonds is NOT true? A)The Administrator requires the posting of bonds primarily to cover the cost of civil liabilities associated with violations of the Uniform Securities Act. B)Bonds may be required for agents of broker-dealers. C)The Administrator requires all broker-dealers to post bonds even if they maintain net capital in excess of minimum amounts. D)The Administrator can accept securities instead of cash if the posting of a bond is required.

C)The Administrator requires all broker-dealers to post bonds even if they maintain net capital in excess of minimum amounts. Firms that maintain net capital in excess of minimum requirements may be exempted from the requirement of posting surety bonds. Agents exercising discretion over client accounts may be required to post a surety bond.

The method of registration of a security under the Uniform Securities Act known as notice filing would be appropriate for which of the following? A)The senior loan officer of a commercial bank liquidates 1,000 shares of a Nasdaq-traded stock that had been pledged as collateral for a loan that is now in default. B)A solicited transaction involving 100 shares of a stock listed on the NYSE. C)The IPO of a closed-end investment company. D)Shares issued by a nonprofit organization.

C)The IPO of a closed-end investment company. Notice filing is the registration method used by investment companies registered under the Investment Company Act of 1940.

Western Securities, Inc. (WSI) is a broker-dealer that also offers portfolio management. One of WSI's portfolio managers notices an article on asset allocation that harmonizes with WSI's investment philosophy. If WSI should post a link to this article on its website, it would probably be considered A)fulfillment B)entanglement C)adoption D)estrangement

C)adoption A firm will be responsible for the content of a linked third-party site if the firm "adopts" its content on any of the firm's sites. Adoption is defined as a firm's endorsement of the content of a third-party site. This is not illegal, but the firm is responsible for the content of the linked information and must be sure that it complies with the firm's policies. Entanglement is adoption taken one step further. This is when the firm (or one of its representatives) contributes to the third-party information and then posts it.

A registered investment adviser representative is instrumental in bringing a new account to the investment adviser. Although the IAR has not become registered as an agent, the adviser intends to pay the representative commissions for those securities transactions routed through their affiliated broker-dealer. Which of the following statements best describes the regulatory aspects of this situation? A)Advisers are prohibited from paying commissions to solicitors. B)The adviser may pay commissions to the IAR because he is properly registered to bring in advisory accounts. C)The adviser may not pay commissions to the investment adviser representative because he is not an agent. D)The adviser may pay a commission to the investment adviser representative for opening the account, presuming the individual is properly registered as an investment adviser representative and that appropriate disclosure of compensation to the representative has occurred.

C)The adviser may not pay commissions to the investment adviser representative because he is not an agent. Commissions on securities transactions paid to investment adviser representatives (solicitors) are permitted when the IAR is properly registered as an investment adviser representative and an agent of a broker-dealer.

A broker-dealer provides HotScores, a portfolio analysis tool that allows clients to indicate their retirement goal. After disclosing age, current financial condition, and risk tolerance, those participating will receive a list of specific securities the customer could buy or sell to meet the investment goal. Which of the following is TRUE? A)This is not a recommendation, as the analysis tool is automated. B)This would be considered an example of social media communication and therefore not specifically covered by NASAA as a recommendation. C)This would be regarded as making a recommendation. D)This is not a recommendation, as the customer will receive a list or series of securities that the customer could buy or sell to meet the goal at a later date

C)This would be regarded as making a recommendation. An example of what the regulators have determined to be a recommendation would be if a broker-dealer provides a portfolio analysis tool that allows a customer to indicate an investment goal and input personalized information such as age, financial condition, and risk tolerance. The broker-dealer then sends the customer a list of specific securi¬ties the customer could buy or sell to meet the investment goal the customer has indicated.

A broker-dealer provides HotScores, a portfolio analysis tool that allows clients to indicate their retirement goal. After disclosing age, current financial condition, and risk tolerance, those participating will receive a list of specific securities the customer could buy or sell to meet the investment goal. Which of the following is TRUE? A)This is not a recommendation, as the analysis tool is automated. B)This would be considered an example of social media communication and therefore not specifically covered by NASAA as a recommendation. C)This would be regarded as making a recommendation. D)This is not a recommendation, as the customer will receive a list or series of securities that the customer could buy or sell to meet the goal at a later date.

C)This would be regarded as making a recommendation. An example of what the regulators have determined to be a recommendation would be if a broker-dealer provides a portfolio analysis tool that allows a customer to indicate an investment goal and input personalized information such as age, financial condition, and risk tolerance. The broker-dealer then sends the customer a list of specific securi¬ties the customer could buy or sell to meet the investment goal the customer has indicated.

Under the Uniform Securities Act, which of the following is TRUE regarding registration of investment adviser representatives? A)Representatives are automatically registered when they become employed by a registered investment adviser. B)Registration in the state where a representative has his business office enables the representative to do business in any state. C)To register, a representative must submit a completed application for registration, a filing fee, and a signed consent to service of process. D)A representative's registration remains in effect even during a period when the representative is not employed by a registered investment adviser.

C)To register, a representative must submit a completed application for registration, a filing fee, and a signed consent to service of process. In general, representatives are not automatically registered when they become employed by an adviser. To register, they must file an application, a consent to service of process, and a filing fee. Registration is not effective during any period when the representative is not employed by a registered adviser, and the Administrator must be notified when a representative's employment begins or ends. Representatives must be registered in each state in which they do business.

According to the USA, under what circumstances is an employee of a licensed broker-dealer in a state allowed to sell exempt securities as an unregistered agent? A)The employee is not paid any commission or salary. B)The transaction is exempt. C)Under no circumstances is an employee of a licensed broker-dealer in a state allowed to sell exempt securities as an unregistered agent. D)The securities are federal covered securities.

C)Under no circumstances is an employee of a licensed broker-dealer in a state allowed to sell exempt securities as an unregistered agent. It is unlawful for a person to transact business on behalf of a broker-dealer unless that person is registered as an agent in the state. Only individuals selling on behalf of the issuer may qualify to be exempt from registration as an agent.

Under the registration provisions of the Uniform Securities Act, it is unlawful for an agent in the state to sell XYZ securities unless: A)the agent is a nonregistered, nonexempt person. B)both the agent and XYZ are nonexempt and nonregistered. C)XYZ is a federal covered security. D)XYZ is a nonregistered, nonexempt security.

C)XYZ is a federal covered security. If XYZ is a federal covered security it is not required to register with the state. Nonexempt securities and nonexempt persons must be registered to be sold (securities) or to do business (persons).

Under the Uniform Securities Act, the term broker-dealer would include: A)an agent registered under the act who from time to time sells stock from personal inventory. B)a trust company. C)a person with no office in the state who directs offers to no more than 5 individual residents of the state in any 12-month period. D)an issuer distributing its own common stock offering.

C)a person with no office in the state who directs offers to no more than 5 individual residents of the state in any 12-month period. Although a person has no office in the state, offers are directed to residents of the state. Under the USA, this person is defined as a broker-dealer. There is no de minimis exemption for broker-dealers. A person is exempt from the definition of broker-dealer if there is no office in the state and offers are directed to institutional clients or existing individual clients not residents of that state. The agent is merely selling his own stock as would any other individual; that does not make one a broker-dealer.

If information filed with the Administrator by a broker-dealer as part of its registration changes in a material way, the registrant must: A)update the information on the registration on the next annual renewal date. B)amend the registration statement within 60 days of the material change. C)amend or update the information promptly regardless of the renewal date. D)submit an entirely new registration form within 30 days of the material change in information

C)amend or update the information promptly regardless of the renewal date. When material information changes, the registrant must promptly amend or update the information regardless of the renewal date. The requirement to amend a registration applies to investment advisers, broker-dealers, and securities. However, the Uniform Securities Act does not define the term "promptly".

If information filed with the Administrator by a broker-dealer as part of its registration changes in a material way, the registrant must: A)update the information on the registration on the next annual renewal date. B)amend the registration statement within 60 days of the material change. C)amend or update the information promptly regardless of the renewal date. D)submit an entirely new registration form within 30 days of the material change in information.

C)amend or update the information promptly regardless of the renewal date. When material information changes, the registrant must promptly amend or update the information regardless of the renewal date. The requirement to amend a registration applies to investment advisers, broker-dealers, and securities. However, the Uniform Securities Act does not define the term "promptly".

Under the Uniform Securities Act, a person whose business model is selling reports on a subscription basis concerning specific securities to investors based on their individual objectives will be defined as A)a journalist B)an agent C)an investment adviser D)a broker-dealer

C)an investment adviser The definition of investment adviser includes any person who for compensation engages in the business of advising others as to the value of securities or the advisability of buying, selling, or investing in securities or who, as a part of a regular business, publishes securities analyses or securities reports for individual investors on a paid subscription basis.

An agent registered in one state may solicit business in another state provided: A)the agent applies for registration in the other state. B)the agent was previously registered with a different firm in the other state. C)both the agent and the firm are properly registered in the other state. D)the agent's firm is properly registered in the other state.

C)both the agent and the firm are properly registered in the other state. An agent holding registration in one state may solicit and/or transact business in another state only if registered in that state and the employing broker-dealer is also registered in that state, unless an exemption is available.

Under the Uniform Securities Act, agent's registrations expire: A)three years from their effective date, unless renewed. B)one year from their effective date, unless renewed. C)every December 31, unless renewed. D)two years from their effective date, unless renewed.

C)every December 31, unless renewed. The expiration date for the registration of agents, broker-dealers, investment advisers, and investment adviser representatives under the Uniform Securities Act is December 31. Note that the question asks for the expiration date under the Uniform Securities Act, which is December 31. Do not be confused by actual practice, which may vary in some states.

n conjunction with the offering of securities, an issuer furnishes a portion of the offering to a promoter for a consideration substantially different from the public offering price. According to the USA, the Administrator: A)must require that the promoter's securities be escrowed for a period not exceeding three years. B)must require that the promoter's securities be escrowed for a period not exceeding one year. C)may require that the promoter's securities be deposited in escrow and that the proceeds from the sale of the registered security in his state be impounded until the issuer receives a specified amount from the sale of the security in his state. D)must stop the offering.

C)may require that the promoter's securities be deposited in escrow and that the proceeds from the sale of the registered security in his state be impounded until the issuer receives a specified amount from the sale of the security in his state. When a promoter of a public offering receives issuer shares for less than the public offering price, the Administrator of a state's securities department may require that the promoter's securities be escrowed until the issuer receives a specified amount from the sale of the security in his state.

A publicly traded corporation offers its employees an opportunity to purchase shares of the company's common stock directly from the issuer. A specific employee of the company is designated to process any orders for that stock. Under the USA, the employee: A)need not register as an agent of the issuer under any circumstances. B)may receive commissions without registration. C)must register as an agent only if he will receive commissions or remuneration, either directly or indirectly related to the volume of sales. D)must register as an agent of the issuer.

C)must register as an agent only if he will receive commissions or remuneration, either directly or indirectly related to the volume of sales. Under the USA, an individual is an agent when effecting transactions with an issuer's existing employees if commissions or other remuneration related to the sale are paid. Therefore, there are cases where the employee would have to register as an agent. When the individual is paid a straight salary for this work, no registration is required.

An individual has been employed by a broker-dealer to solicit new subscriptions for the firm's free monthly stock market report. The individual is paid a salary plus bonus based on his success rate with signing up subscribers. Under the USA, this person would: A)have to be registered as an investment adviser representative. B)have to be registered as an agent of the broker-dealer. C)not have to be registered as an agent of the broker-dealer. D)only be allowed to contact existing clients of the broker-dealer.

C)not have to be registered as an agent of the broker-dealer Agents of broker-dealers are in the business of securities-related transactions on behalf of clients of the firm. A free market report is not a security, so this individual is not soliciting securities business..

Secure Wealth Advisers has $21 million in assets under management and is currently registered and has offices only in North and South Dakota. While spending the winter in Arizona, 3 of their North Dakota and 4 of their South Dakota clients change their residences to Arizona. The firm would be permitted to continue to service these clients: A)by registering in Arizona and maintaining an office in the state. B)as normal because with no offices in Arizona and only doing business with existing clients, registration in Arizona under the USA is not required. C)only by registering in Arizona. D)as normal because with no office in Arizona and no more than 5 clients from any one state in the state, registration in Arizona under the USA is not required.

C)only by registering in Arizona. 30 days after existing clients have changed state of residence, an investment adviser must either register with that state or no longer transact business with them. The de minimis requirement is not based on the state from which the clients are moving.

If an agent feels that his secretary is underpaid and decides to split his commissions on an 80%/20% basis, this practice is: A)a violation under all circumstances. B)a violation in certain states. C)permitted if the secretary is also registered as an agent and the firm's principal agrees to the arrangement. D)permitted if the secretary is also registered as an agent.

C)permitted if the secretary is also registered as an agent and the firm's principal agrees to the arrangement. If the secretary is a registered agent, then the agent may split commissions.

Under the Uniform Securities Act, the definition of a broker-dealer includes a(n) A)trust company when executing transactions in accounts in which it does not act in a fiduciary capacity B)authorized representative of the issuer who receives a commission C)person in the business of making trades in his own account or for the accounts of others D)agent handling principal transactions with major institutional clients

C)person in the business of making trades in his own account or for the accounts of others A broker-dealer is defined as any person in the business of making trades in its own account or for the accounts of others.

According to the Uniform Securities Act, the Administrator has the power to require persons wishing to register as an agent to: A)have minimum net capital, pay filing fees, pass an exam, and post a surety bond. B)have minimum net capital, post a surety bond, and pass an exam. C)post a surety bond, pay filing fees, and pass an exam. D)post a surety bond and pass an exam.

C)post a surety bond, pay filing fees, and pass an exam. The Administrator may require that, as a condition of registration, the agent post a surety bond (if given discretion by clients over their accounts) pay filing fees, and pass an examination that may be written, oral, or both. Minimum net capital orders apply to broker-dealers, not their agents.

Mary, who is licensed as an agent in State A, got a promotion and will turn her clients over to Julie, who is licensed only in State B. Before Julie can take over the accounts, she must: A)receive permission from each of those clients. B)register with FINRA. C)register with State A. D)register with the NYSE.

C)register with State A. For an individual to sell securities in a particular state, she must be licensed in that state unless an exemption applies. There is nothing in the USA that requires client consent when the agent of record on the account changes.

An individual may NOT act as an agent for more than one broker-dealer: A)under any circumstances. B)unless the broker-dealers are exchange members. C)unless the Administrator, by rule or order, authorizes such employment. D)unless the broker-dealers are unrelated.

C)unless the Administrator, by rule or order, authorizes such employment. An individual may only act as an agent for multiple broker-dealers that are affiliated with each other. If the broker-dealers are unrelated, an agent may not work for them unless the state securities Administrator, by rule or order, authorizes such employment.

All of the following statements about an agent's need to be registered in a state are correct EXCEPT: A)registration is not required in a state where the agent has no place of business and only deals with existing clients who are vacationing in that state. B)registration is required when they limit their activity to the sale of exempt securities. C)registration is required in each state in which the employing broker-dealer has a place of business. D)registration is required if they solicit the sale of securities by telephone to fewer than 6 individuals residing in that state.

C)registration is required in each state in which the employing broker-dealer has a place of business. The fact that the broker-dealer does business in a state has nothing to do with a specific agent. Many broker-dealers are registered in all states; very few agents are. Agents must register in each state where they are selling or offering securities, even if the security or the transaction is exempt. That exemption only applies to the need for the security to be registered, not the agent. Soliciting the sale of securities by telephone is considered making an offer and there is no de minimis exemption available. Finally, registration is not required when making use of the "snowbird" exemption.

A banner on a broker-dealer's website is considered A)entanglement B)interactive content C)static content D)adoption

C)static content In most cases, a broker-dealer's website is static. That is, only the firm can make changes and those changes are infrequent. Certainly a banner ad on the website fits that description. Entanglement and adoption are terms applying to a securities professional making use of third-party information on social media.

All of the following statements regarding the registration of an investment adviser in a state are true EXCEPT: A)the initial application must include a consent to service of process along with Form ADV and the appropriate fees. B)the adviser's registration expires on December 31 each year. C)the annual renewal process involves payment of the appropriate fees and refiling of the consent to service of process. D)if the investment adviser is not an individual, any officer or partner active in the advisory business is automatically registered as an investment adviser representative.

C)the annual renewal process involves payment of the appropriate fees and refiling of the consent to service of process. The consent to service is a permanent document that remains on file with the Administrator; it need not be resubmitted for yearly renewal. The initial application for registration must include a consent to service of process along with Form ADV and the appropriate fees. If the investment adviser is not an individual, all officers or partners of the business entity that play an active role in the giving or supervision of giving advice are automatically registered as IARs.

When registering a security under the Uniform Securities Act, the registrant must indicate all of the following EXCEPT A)adverse rulings by a court, regulatory authority, or the SEC with respect to the offering B)the amount of securities to be offered in the state C)the effective date of the offering D)all other states in which the security is to be registered

C)the effective date of the offering The effective date is determined by the state Administrator or the SEC, not the person registering the security. Registrants must indicate all other states in which the security is to be registered. The amount of securities to be offered in the state, for which a specific registration is sought, must be disclosed in addition to any adverse rulings related to the offering.

In the securities industry, the term contra-party refers to A)the person on the other side of a civil suit B)a securities regulator who begins an investigation against a securities professional C)the person on the other side of the trade D)the person identified on the trade confirmation as a broker

C)the person on the other side of the trade Contra-party is defined as the broker-dealer or customer to whom a person has sold securities or from whom a person has purchased securities - they are on the other side of the trade.

One of the surest ways to explain to a client that an investment opportunity presented via social media is likely to be a scam is A)the ready availability of audited financial reports B)if an SEC registered prospectus is available C)the promise of high returns with low risk D)that an escrow account has been established at a recognized bank

C)the promise of high returns with low risk A high return with low risk is almost always an indication that something is not right about an investment. Even though SEC registration is no guarantee of success, at least we know the issuer has gone through the rigor of filing the registration statement and making full disclosure. An escrow account offers investors protection and audited financial statements allow for a true look at the issuer's financial condition.

Prompt notification to the Administrator must be made when: A)a federal covered adviser with a place of business in the state, relocates that office to a different city. B)there is a change to the marital status of an agent. C)there is a material change to any information contained in a broker-dealer's application for registration that is on file with the state. D)a non-exempt issuer's dividend is reduced.

C)there is a material change to any information contained in a broker-dealer's application for registration that is on file with the state. Whenever there is a material change to the information contained in the registration application of a securities professional, the Administrator must be promptly notified. Marital status is not included on the Form U-4. Federal covered investment advisers are not under the Administrator's jurisdiction.

All of the following statements regarding securities brokerage firms are true EXCEPT: A)they are regulated by the SEC as well as individual stock exchanges. B)they act as agents in executing orders to buy and sell securities on the various stock exchanges in the secondary market. C)they employ only registered investment adviser representatives. D)they may act as dealers who buy and sell securities for their own account.

C)they employ only registered investment adviser representatives. Agents work for broker-dealers, while investment adviser representatives work for investment advisers.

Admin -Escrow

Can as part of reg by qual or coord, require the security to be deposited in escrow and proceeds impounded until issuer receives a specified amount

Static Social Media Content

Can only be changed by originator, or someone under their control

Admin power regarding ads

Can request they be filed, as long as its in their state

State powers with regards to setting standards of record keeping

Can require minimums, but can't exceed those set by SEC

Which of the following must register as a broker-dealer under the USA? A)A broker-dealer with no place of business in the state that effects transactions exclusively with issuers of securities in that state. B)A broker-dealer with no place of business in the state that has directed offers to clients who have more than 30 days' temporary residency in the state. C)A broker-dealer with no place of business in the state that deals exclusively with broker-dealers with offices in that state. D)A broker-dealer with a place of business in the state that effects transactions exclusively with broker-dealers registered in other states.

D)A broker-dealer with a place of business in the state that effects transactions exclusively with broker-dealers registered in other states. If a broker-dealer has an office in the state, it must register with the state, regardless of what types of clientele it serves. The term "broker-dealer" excludes anyone without a place of business in the state who effects transactions exclusively with issuers, other broker-dealers, or institutions, or who directs an offer in the state to an existing customer who temporarily resides in the state where the offer is received, regardless of the length of time. As long as the broker-dealer is properly registered in the vacationer's state of permanent residence and does not maintain an office in the state being visited, it is not defined as a broker-dealer.

Under the Uniform Securities Act of 1956, which of the following statements is NOT true about registration of broker-dealers? A)Registrations become effective in 30 days, unless accelerated by the Administrator. B)The Administrator may require a written examination for all personnel wishing to register in the state. C)The Administrator may require minimum standards of recordkeeping and financial responsibility not to exceed those of the SEC. D)A sole proprietorship may not register as a broker-dealer.

D)A sole proprietorship may not register as a broker-dealer. Although rare, there is nothing in the law that prevents a broker-dealer from being organized as a sole proprietorship. Remember, the term broker or dealer is defined with the phrase, "any person" and that term is very broad. Under the Securities Exchange Act of 1934, registrations become effective in 45 days, unless delayed by the SEC. Under the Uniform Securities Act, it is 30 days, although the Administrator may accelerate the process. The state may require an examination for all registered personnel and may require minimum standards of recordkeeping and net capital. However, those standards may not exceed those promulgated by the SEC.

ABC Corporation, a newly formed company, has filed a registration statement with the SEC under the Securities Act of 1933. If they wish to use coordination to register in this state, which of the following statements is true? A)If registered in state X by coordination, the state registration will become effective 30 days after the federal registration becomes effective. B)The federal registration makes state registration unnecessary. C)If registered by coordination, the state registration may become effective before the federal registration. D)A statement of the maximum and minimum proposed offering prices and maximum underwriting discounts and commissions must be on file with the Administrator for two full business days prior to the date the federal registration statement becomes effective.

D)A statement of the maximum and minimum proposed offering prices and maximum underwriting discounts and commissions must be on file with the Administrator for two full business days prior to the date the federal registration statement becomes effective. One of the requirements of coordination is that a statement of the maximum and minimum expected offering prices and maximum underwriting compensation must be on file with the Administrator for at least two full business days prior to the effective date.

Under the Uniform Securities Act, the Administrator may require a broker-dealer to post a surety bond of: A)$50,000. B)$25,000. C)$10,000. D)An amount not in excess of that set by the SEC.

D)An amount not in excess of that set by the SEC. Unlike investment advisers where the USA specifies posting a surety bond in the amount of $35,000, the Uniform Securities Act does not specify an amount for broker-dealers. However, the NSMIA states that the Administrator may not require a broker-dealer be bonded in an amount above that set by the SEC. Furthermore, bonds will not be required of broker-dealers that maintain a specified net capital.

Under the Uniform Securities Act, which of the following is an agent? A)An individual who is in the business of providing investment advice on behalf of his employer. B)A broker-dealer that charges a commission as a regular part of its business. C)A clerical person who files trades for the firm. D)An individual who effects securities transactions for commissions.

D)An individual who effects securities transactions for commissions. The Uniform Securities Act defines an agent as any individual (other than a broker-dealer) who represents a broker-dealer in effecting securities transactions.

Which of the following statements is NOT true? A)Federal covered securities include securities listed on national exchanges. B)Transaction exemptions must be established before each transaction. C)Federal covered securities include those registered under the Investment Company Act of 1940. D)Exempt securities must reestablish their exemptions at least annually.

D)Exempt securities must reestablish their exemptions at least annually. Exempt securities need not reestablish their exemptions annually or otherwise. Exempt securities are exempt because their issuers are exempt while the basis for an exemption for a transaction must be established before each transaction. Neither the exempt security nor the transaction exemptions are mutually exclusive and a security or transaction may qualify for two or more of these exemptions. The term "federal covered securities" includes registered investment companies as well as securities listed on national exchanges.

An agent under the USA is a(n): individual who represents an issuer in nonexempt transactions. registered broker-dealer that deals in registered securities. individual who sells nonexempt securities as a representative of a registered broker-dealer. individual who has no place of business in the state and sells securities to an existing client who is not a resident of the state. A)I and IV. B)II and IV. C)II and III. D)I and III.

D)I and III. Agents generally work for and represent a broker-dealer in conducting securities sales or transactions but are excluded from the definition of an agent if they have no place of business in the state and sell securities to an existing client who is not a resident of the state. Individuals employed by issuers to sell in nonexempt transactions are also included in the definition of "agent".

The Administrator has just notified Rockland Securities that its application to operate as a broker-dealer in this state is now effective. Which of the following parties would be considered registered? The firm. Its officers. Its directors. Its agents. A)I and II. B)I and III. C)III and IV. D)I, II and III.

D)I, II and III. When a business registers as a broker-dealer with the Administrator, the firm's, its officers, and directors are simultaneously registered as agents along with the firm's effective registration as a broker-dealer. Individuals employed for the purpose of representing the firm as agents are considered to be applying for registration after the firm's license is effective.

Which of the following persons are excluded from the definition of, or exempt from registration as, a broker-dealer under the Uniform Securities Act? A broker-dealer with no office in the state that effects trades exclusively with other broker-dealers in the state. A trust company with an office in the state that deals with the general public. A broker-dealer with no office in the state that has no more than five retail clients resident in the state within the past year. A broker-dealer with no office in the state that effects securities trades exclusively with trust companies or other broker-dealers. A)I, II, III and IV. B)I and II. C)III and IV. D)I, II and IV.

D)I, II and IV. As long as a broker-dealer does not have an office in the state, it is possible to qualify for exclusion from the definition. The primary requirement for the exclusion is that the broker-dealer confines trading to financial institutions or other broker-dealers. Unlike with investment advisers, there is no de minimis exemption for broker-dealers. Trust companies are excluded from the definition of broker-dealer.

Which of the following securities are federal covered and exempt from state registration? Bonds of an issuer whose common stock is listed on the NYSE. Bonds of an issuer whose common stock is listed on the AMEX. Stock listed on Nasdaq Stock Market. Registered investment company securities. A)III and IV. B)I, II and IV. C)I and II. D)I, II, III and IV.

D)I, II, III and IV. All securities of an issuer whose common stock is listed on any national exchange or any tier of the Nasdaq Stock Market are exempt from state registration, including any securities of the same issuer senior to such securities. All registered investment company securities are also exempt from state registration.

Which of the following are federal covered securities? A security quoted on the Nasdaq Stock Market Shares of an investment company registered under the Investment Company Act of 1940 An offering in a security exempt from registration under the Securities Act of 1933. A security that has a federally imposed exemption from state securities registration. A)I and III. B)I and II. C)III and IV. D)I, II, III and IV.

D)I, II, III and IV. Any Nasdaq security, shares of a registered investment company, an offering in a security exempt from registration under the Securities Act of 1933, a security that has a federally imposed exemption from state securities registration, and a security traded on a regulated exchange are all federal covered securities.

Under the Uniform Securities Act, the Administrator can require which of the following from broker-dealers and investment advisers? Filing of sales literature. Maintaining of records. Filing of financial statements. Filing of amendments to registrations. A)II and III. B)I and II. C)II, III and IV. D)I, II, III and IV.

D)I, II, III and IV. The act requires the filing of sales literature and advertising (as well as a prospectus) addressed or intended for clients or prospective clients, unless exempt under the act. In addition, it requires that books and records be kept for a minimum of three years for broker-dealers and five years for investment advisers and provides that an Administrator may require the filing of financial reports regarding the net worth of the firm. The act also requires broker-dealers and investment advisers to update any information filed with the state regarding any material change that takes place. Even federal covered investment advisers may be required to file copies of their SEC registration and amendments with state Administrators, along with filing fees.

the Uniform Securities Act requires which of the following to be registered as agents of a broker-dealer? A senior partner of a broker-dealer who actively manages the firm's day-to-day operations. A silent partner who has contributed most of the capital of the broker-dealer but takes no part in the firm's activities. An associated person of a broker-dealer whose primary function is to take orders from the public. An employee of a broker-dealer who only trades securities for the firm's proprietary account. A)I, II, III and IV. B)II and IV. C)I and II. D)I, III and IV.

D)I, III and IV. Employees who take orders from the public and who trade securities for the accounts of broker-dealers must register as agents. The USA requires any person who represents a broker-dealer in effecting securities transactions to register as an agent of their employing broker-dealer. Partners (officers, directors) who play an active role in the securities business of a broker-dealer must register as agents; those who don't, are exempt from registration.

Under the Uniform Securities Act, if no denial or proceedings are pending, when does an investment adviser registration become effective? A)When the Administrator so orders, but not to exceed 90 days. B)No sooner than 15 days. C)60 days after application or an amendment is filed. D)When the Administrator so orders, but not to exceed 30 days

D)When the Administrator so orders, but not to exceed 30 days Registrations become effective at noon on the 30th calendar day after the date of filing if there are no denial orders or pending proceedings.

The Uniform Securities Act requires which of the following to be registered as agents of a broker-dealer? I. A senior partner of a broker-dealer who actively manages the firm's day-to-day operations. II. A silent partner who has contributed most of the capital of the broker-dealer but takes no part in the firm's activities. III. An associated person of a broker-dealer whose primary function is to take orders from the public. IV. An employee of a broker-dealer who only trades securities for the firm's proprietary account. A)I, II, III and IV. B)II and IV. C)I and II. D)I, III and IV.

D)I, III and IV. I.Employees who take orders from the public and who trade securities for the accounts of broker-dealers must register as agents. The USA requires any person who represents a broker-dealer in effecting securities transactions to register as an agent of their employing broker-dealer. Partners (officers, directors) who play an active role in the securities business of a broker-dealer must register as agents; those who don't, are exempt from registration.

Under the Uniform Securities Act, which of the following statements are TRUE? I. It is unlawful for anyone to conduct business as a broker-dealer in a state unless also registered as an agent. II. A registration statement may be filed by an issuer itself, a broker-dealer, or any other person on whose behalf the offering is to be made. III. Registration of an agent is not effective when the agent is not associated with a broker-dealer registered under the act. IV. Registrations are automatically renewed one year after approval, provided no violations occurred during the year. A)I and IV B)II and IV C)I and III D)II and III

D)II and III It is unlawful for anyone to conduct business as a broker-dealer in a state unless properly registered as such; an agent is not a broker-dealer. A registration statement can be filed by an issuer itself or any other person on whose behalf the offering is to be made, or by a broker-dealer. Registration of an agent is not effective when the agent is not associated with a broker-dealer registered under the act. Registrations expire December 31st unless renewed, regardless of violations.

Which of the following statements are TRUE? An agent may never be simultaneously employed by multiple broker-dealers. An agent must submit separate registrations for each broker-dealer with which he is registered. Certain states prohibit agents from dual or multiple registration. An agent who sells securities in several states must be registered with different broker-dealers in each state. A)IV only. B)I only. C)II, III and IV. D)II and III.

D)II and III. An agent must submit separate registrations for each broker-dealer with which he is registered, and an agent may be prevented from multiple registration in those states that prohibit dual or multiple registrations.

Under the National Securities Markets Improvement Act of 1996 (NSMIA), states are prevented from: registering securities. establishing capital and custody requirements that exceed those provided for in the Securities Exchange Act of 1934. establishing recordkeeping requirements for broker-dealers or investment advisers that exceed those required under federal securities law. registering investment advisers. A)I and III. B)III and IV. C)I and IV. D)II and III.

D)II and III. The NSMIA streamlined much of federal and state securities law and specifically prevented dual regulation. As a result, states may not impose capital, custody, and recordkeeping requirements that exceed requirements under federal securities law. States can register securities and investment advisers that are not covered by the registration requirements of federal legislation.

Which of the following is (are) required to register with a state Administrator? -An adviser who only provides impersonal investment advice through newspaper columns, magazine articles, or financial publication of general and regular circulation. -Investment adviser representatives of federal registered advisers who have natural person clients and have a place of business in the state. -An investment adviser who has no place of business in the state and has five advisory clients in the state. -A person who is an officer of a federal registered investment adviser who has no natural person clients. A)I, II, III and IV. B)II and III. C)I only. D)II only.

D)II only. Under federal law, publishers of bona fide newspapers, magazines, and financial publications of general and regular circulation are excluded from the definition of an investment adviser. Under state law, the publication of investment advice that is not based on the specific investment situation of each client excludes the publisher from the definition of an investment adviser. Based on these definitions, the publisher of an investment advisory newsletter providing only impersonal investment advice available only on a subscription basis is not required to register under federal or state law. The investment adviser representatives of a federal registered adviser are required to register in each state in which they have a place of business. The Uniform Securities Act provides a de minimis standard exemption from state registration for advisers who have no place of business in a state and have fewer than six clients resident in the state. A person employed by and supervised by a federal registered investment adviser who is not an investment adviser representative with natural person clients (as defined by federal law) is not required to register with state Administrators.

Under the National Securities Markets Improvement Act of 1996, which of the following statements describe federal covered securities? A security registered under the USA. A security registered under the Investment Company Act of 1940. A security of a company traded on the Nasdaq Stock Market. A security issued by the U.S. government. A)I and II. B)II and III. C)II and IV. D)II, III and IV.

D)II, III and IV. A federal covered security has a federally imposed exemption from state registration so selecting a choice that includes registering under the USA cannot be correct. The list includes most securities exempt from registration under the federal Securities Act of 1933 (those issued by the U.S. government and state and local governments). In addition, it includes a number of securities registered with the SEC, primarily those traded on the exchanges and Nasdaq as well as investment companies registered under the Investment Company Act of 1940.

The Uniform Securities Act requires that a consent to service of process be filed for the registration of: trustees. issuers. investment advisers. broker-dealers. A)I and II. B)II and IV. C)I, II, III and IV. D)III and IV.

D)III and IV. The state securities Administrator has jurisdiction over investment advisers, broker-dealers, and any who are associated with those entities. Issuers don't register, it is their securities that do. The Administrator may have jurisdiction over securities offered for sale by a company in the Administrator's state and generally requires a consent to service of process for a securities registration.

Under which of the following conditions may an agent sell an unregistered nonexempt security? A)When the broker-dealer employing the agent has no office in the state. B)Only to a noninstitutional client. C)Never. D)If the order was unsolicited.

D)If the order was unsolicited. Agents may accept unsolicited orders from clients, institutional or not, in unregistered nonexempt securities. If the transaction is with an institutional client, it can be solicited. In the case of unsolicited orders, the Administrator may demand written acknowledgement from the client that, in fact, the order was unsolicited.

Lucy, an agent of XYZ Securities, works out of an office in Ohio. She calls her client Clark, an individual investor and a resident of Kansas, and recommends that Clark purchase 500 shares of Perfect Pasta, Inc. common stock. Lucy read a report that Perfect Pasta plans to introduce a low carbohydrate pasta into the marketplace. Perfect Pasta, Inc. common stock is neither exchange traded nor traded on Nasdaq. At the time Lucy makes the recommendation, the stock is not registered with the Securities Departments of Ohio or Kansas. Which of the following statements best reflects this transaction? A)Lucy has not violated the USA because the transaction with Clark is an exempt transaction. B)Lucy has violated the USA because Perfect Pasta, Inc. failed to register its stock with the Securities Department in Ohio. C)Lucy has violated the USA because Perfect Pasta, Inc. failed to register its stock with the Securities Departments in both Kansas and Ohio. D)Lucy has violated the USA because she solicited an order in an unregistered, nonexempt security.

D)Lucy has violated the USA because she solicited an order in an unregistered, nonexempt security. The agent violated the USA by engaging in the prohibited practice of soliciting transactions in an unregistered, nonexempt security.

Under the USA, the least active review of registration documentation is performed by state Administrators before which of the following becomes effective? A)Qualification B)Coordination C)Application D)Notice filing

D)Notice filing Under the NSMIA, the Administrator may request copies of the documents filed with the SEC by federal covered securities, but does not review them because of lack of jurisdiction. There is greater review of the information filed in a registration by coordination, but, since the primary responsibility falls upon the SEC, the states sometimes just spot check the documents. However, registration by qualification or application for professional licensing becomes effective only after an active review of registration information and upon order of the Administrator.

What is the procedure by which federal covered securities, registered under the Investment Company Act of 1940, file their offerings with state securities Administrators? A)Qualification. B)Coordination. C)Federal covered securities need not file with state securities Administrators. D)Notice filing.

D)Notice filing. Notice filing primarily applies to securities issued by investment companies, such as mutual funds, registered under the Investment Company Act of 1940. Offerings of securities that are not federal covered securities must be registered with the states by either coordination or qualification, unless exempt.

In which of the following does registration of an issue become effective when ordered by the Administrator? A)Coordination. B)Integration. C)Notice filing. D)Qualification.

D)Qualification.

Under the Uniform Securities Act, the Administrator may NOT do which of the following? A)Issue a cease and desist order without a prior hearing. B)Cancel the registration of a broker-dealer when mailings are returned with no forwarding address. C)Require an agent to post a surety bond. D)Refuse to allow an Administrator from another state to investigate a broker-dealer in the state.

D)Refuse to allow an Administrator from another state to investigate a broker-dealer in the state. Administrators cooperate with Administrators of other states in conducting investigations.

Under the Uniform Securities Act, if no denial or proceedings are pending, when does an investment adviser registration become effective? A)When the Administrator so orders, but not to exceed 90 days. B)No sooner than 15 days. C)60 days after application or an amendment is filed. D)When the Administrator so orders, but not to exceed 30 days.

D)When the Administrator so orders, but not to exceed 30 days. Registrations become effective at noon on the 30th calendar day after the date of filing if there are no denial orders or pending proceedings.

When a security registers by using coordination, under normal circumstances, the effective date is determined by the: A)underwriter. B)issuer. C)Administrator. D)SEC.

D)SEC. A security is registered by coordination when there is a simultaneous federal and state registration. Under normal circumstances, once the SEC has declared the registration effective, it is also effective in those states where the registration was coordinated.

An issuer is planning to offer securities for sale in State A and several other states. Which of the following statements regarding registration in State A under the Uniform Securities Act is NOT true? A)The Administrator may by order permit omission of items of information or documents from a registration statement. B)The Administrator may, as a condition of registration by qualification or coordination, rule that the securities may only be sold on a specified form of subscription and that a signed copy be filed with the Administrator. C)Every registration must specify the total amount of securities to be offered in State A, the states in which offering is to be made, and any adverse order or judgment by a regulatory authority. D)The Administrator may not, as a condition of registration by qualification or coordination, require the security be deposited in escrow and the proceeds be impounded until the issuer receives a specified amount.

D)The Administrator may not, as a condition of registration by qualification or coordination, require the security be deposited in escrow and the proceeds be impounded until the issuer receives a specified amount. The Administrator may, as a condition of registration by qualification or coordination, require the security to be deposited in escrow and the proceeds to be impounded until the issuer receives a specified amount. It is true that every registration must specify the amount of securities to be sold in the state, the states in which offering is to be made, and any adverse order or judgment of a regulatory authority. The Administrator may by order permit omission of any item of information or document from a registration statement. The Administrator may, as a condition of registration by qualification or coordination, rule that the securities may only be sold on a specified form of subscription and that a signed copy be filed with the Administrator.

Which of the following statements regarding the Administrator's authority to examine the books and records of registrants is TRUE? A)If a broker-dealer's or investment adviser's records are located outside the Administrator's state, they only may be examined to collect evidence for a hearing. B)Broker-dealer records may be examined at any time, but the same is not so in the case of investment advisers. C)Such examinations are not necessary or appropriate for the protection of investors or in the public interest. D)The records may be examined at any time for any reason within or outside the state if it is in the public interest to do so.

D)The records may be examined at any time for any reason within or outside the state if it is in the public interest to do so. All required records must be made available for examination by a state Administrator, within or outside the state, as is appropriate or necessary in the public interest. Reference: 2.4.3 in the License Exam Manual

Jon, an agent with Johnson-Bayer Securities, was reacting to peer pressure to use email as a prospecting tool. He decided to highlight the exciting new process for drug delivery which was covered in the new offering prospectus when explaining why he felt the issuer found the next "aspirin." He summed up the email by stating potential investors needed to act quickly to get in on the ground floor. His decision to do so fell into the category of which of the following? A)Advertising B)Fraud C)Phishing D)Unethical business practice

D)Unethical business practice NASAA considers it to be an unethical business practice to use any advertising or sales presentation in such a fashion as to be deceptive or misleading. Examples of such practices would be: a distribution of any nonfactual data; any material or presentation based on conjecture; unfounded or unrealistic claims in any brochure, flyer, or display by words, pictures, or graphs; or anything otherwise designed to supplement, detract from, supersede, or defeat the purpose or effect of any prospectus or disclosure.

Under the Uniform Securities Act, which of the following statements is TRUE regarding registration of an investment adviser if the application has not been amended? A)Unless specified earlier by the Administrator, the registration becomes effective at noon on the 60th day after application. B)Unless specified earlier, registration becomes effective no sooner than 15 days after the application is filed. C)Unless specified earlier, registration becomes effective no later than 90 days after the application is filed. D)Unless specified earlier by the Administrator, the registration becomes effective no later than noon on the 30th day after application.

D)Unless specified earlier by the Administrator, the registration becomes effective no later than noon on the 30th day after application. While the Administrator may specify an earlier date, absent any denial orders or pending proceedings, registrations become effective at noon on the 30th calendar day after the date of filing. The application is considered to be filed on the date received in the offices of the Administrator, not the date of mailing by the applicant.

XYZ Securities is a broker-dealer based in Wisconsin with offices in no other state. In addition to its Wisconsin clients, XYZ has 30 retail customers living in Illinois. During the winter, if 10 existing customers vacation in Florida for up to 7 weeks at a time, XYZ Securities is a broker-dealer in: A)Wisconsin only. B)all states having enacted the USA. C)Wisconsin, Illinois, and Florida. D)Wisconsin and Illinois.

D)Wisconsin and Illinois. Under the USA, XYZ Securities is a broker-dealer in Wisconsin because it maintains an office there. XYZ Securities is also a broker-dealer in Illinois because with 30 Illinois retail (non-institutional) customers, registration is required even if there is no physical office in Illinois. Because none of XYZ's clients has taken up residence in Florida, such clients are transients rather than residents. Thus, XYZ Securities is not a broker-dealer in Florida subject to the state's registration requirements.

Under the USA, which of the following is considered a broker-dealer in a state? A)An agent effecting transactions for a broker-dealer. B)A broker-dealer with no place of business in the state who only does business with other broker-dealers. C)First Federal Trust Company. D)XYZ Broker-dealer, a firm with an office in the state whose only clients are insurance companies.

D)XYZ Broker-dealer, a firm with an office in the state whose only clients are insurance companies. Regardless of who its clients are, XYZ is considered a broker-dealer because it has an office in the state. Banks and trust companies, as well as agents, are specifically excluded from the definition of broker-dealer.

Although certain common stocks, known as federal covered securities, are exempt from state registration, the Administrator has the power to request from the issuer all of the following EXCEPT: A)copies of the registration statement filed with the SEC. B)a consent to service of process. C)a copy of the issuer's articles of incorporation. D)a contact person located within the state for purposes of legal service.

D)a contact person located within the state for purposes of legal service. The consent to service of process eliminates the need for any local representation for legal purposes.

XYZ Manufacturing Company, domiciled in Delaware, has been operating successfully for over 20 years. Their stock has had a limited trading market in Delaware. Needing additional capital for expansion, XYZ wishes to register in a number of states using coordination. All of the following are requirements EXCEPT: A)the appropriate filing fee. B)an agreement to promptly forward all future amendments to the federal prospectus. C)three copies of the latest form of prospectus filed under the Securities Act of 1933. D)a rating in one of the top three categories by a nationally recognized rating agency.

D)a rating in one of the top three categories by a nationally recognized rating agency. Ratings are never a part of the registration requirements under the USA.

Under the Uniform Securities Act, a state registered investment adviser's records may be examined by the Administrator or his designee: A)only if not repetitious of an SEC exam in the prior 6 months. B)only by court order. C)only with permission from the investment adviser. D)at any time during regular business hours.

D)at any time during regular business hours. All records must be available for examination by the Administrator at any time during regular business hours, within or outside the state.

Social media can be static or interactive. Examples of static content typically available through social networking sites include all of the following EXCEPT A)backgrounds B)wall information C)profiles D)blogs

D)blogs Blogs are interactive, while the others are static.

An agent lives in Montana and is registered in Montana and Idaho. His broker-dealer is registered in every state west of the Mississippi River. The agent's client, who lives in Montana, decides to enroll in a 1-year resident MBA program in Philadelphia, Pennsylvania. During the 1-year period, when the client is in Philadelphia, the agent may: A)only accept unsolicited orders. B)not deal with the client until the broker-dealer registers in Pennsylvania. C)not conduct any business with the client. D)conduct business with the client as usual.

D)conduct business with the client as usual. Even though the college program is referred to as a resident program, that does not mean that the client has changed his state of residence. Although neither the firm nor the agent is registered in Pennsylvania, the agent may continue to conduct business with the client. This is because both the agent and his firm are properly registered in the client's state of permanent residence.

The document that gives the Administrator the right to process complaints against a registrant is known as a(n) A)writ of habeas corpus B)injunction C)durable power of attorney D)consent to service of process

D)consent to service of process The consent to service of process gives the Administrator the right to process legal complaints against the applicant.

Under the USA, agent registrations expire: A)three years after the effective date. B)365 days after the effective date. C)two years after the effective date. D)each year on December 31.

D)each year on December 31. Every agent, broker-dealer, investment adviser, and investment adviser representative registration expires each year on December 31.

Under the NSMIA, state securities Administrators retain authority to: A)regulate the securities registration and offering process for registered investment companies. B)impose state registration requirements on all investment advisers. C)forward all filing fees received from issuers, broker-dealers, and agents to the SEC. D)enforce antifraud provisions.

D)enforce antifraud provisions. Under the NSMIA, state Administrators are not prohibited from enforcing the antifraud provisions of state and federal securities laws. Investment companies and SEC-registered advisers are exempt from state registration but they may be required to pay state filing fees.

Which of the following statements regarding issuers of securities listed on the NYSE is TRUE? Securities of NYSE issuers are: A)not federal covered securities because state securities regulators have the ability to prosecute the issuers for fraud as well as other violations of securities law. B)exempt from registration with the SEC because they are required to meet listing requirements of SEC-registered exchanges. C)securities sold in interstate commerce that must register with the SEC and by coordination only in those states in which their securities are sold. D)federal covered securities that are exempt from registration with the states.

D)federal covered securities that are exempt from registration with the states. Issuers of securities listed on the NYSE are federal covered securities that are exempt from registration, although some states may require a notice filing. Investment companies, however, are federal covered securities that generally submit notice filings to the state in which their securities are sold. Registration by coordination at the state level is available for securities that are sold interstate and registered with the SEC, but that don't meet the NSMIA definition of federal covered security by being listed on SEC-regulated exchanges, such as the NYSE.

Hal owns a successful plumbing business. If he engages in a substantial amount of short-term trading in stocks for his own benefit, he would be considered a(n): A)institutional investor. B)dealer. C)accredited investor. D)individual investor.

D)individual investor. Hal is not in the business of engaging in securities transactions, he is in the plumbing business. Thus, he is an individual investor rather than a dealer. As the question provides no information as to Hal's annual income or net worth, we have no indication that he is an accredited investor. Hal is a plumber rather than a financial institution similar to a bank or an insurance company.

An agent is using social media to try to build her business. If her Facebook page allows for followers to "like" her, that would be considered A)static content B)illegal content C)misleading content D)interactive content

D)interactive content One of the things that differentiate interactive content from static content is the ability for persons other than the originator of the content to have access. Posting a like to a Facebook page is an example of this.

Under the USA, each of the following is specifically excluded from the definition of a broker-dealer EXCEPT an: A)international bank. B)issuer. C)agent. D)investment adviser.

D)investment adviser. The USA specifically excludes agent/issuers and banks, international or domestic, from the definition of a broker-dealer. Investment advisers also may have to register as broker-dealers if their method of operation requires it.

Under the Uniform Securities Act, a broker-dealer is defined as any person who: A)is registered with the SEC. B)buys securities. C)sells securities. D)is in the business of effecting securities transactions for its own account or for the accounts of others.

D)is in the business of effecting securities transactions for its own account or for the accounts of others. A broker-dealer is any person, partner, officer, director, or securities firm engaged in the business of effecting securities transactions for the accounts of others (broker) or for its own account (dealer).

Registration statements for securities under the Uniform Securities Act are effective for: A)a period of time determined by the Administrator for each issue. B)one year from the previous December 31. C)one year from the date of issue. D)one year from the effective date.

D)one year from the effective date. Securities registration statements are generally effective for one year from the effective date.

Social networking sites typically contain both static and interactive content. The difference between these two is that static content A)is only visible to a limited number of website visitors, while all can access interactive content B)is always provided by the broker-dealer, while interactive content is the domain of the firm's agents C)need not be approved prior to use, while interactive content needs the approval of a designated supervisor D)remains posted until it is changed by the poster, while interactive content contains real-time communication

D)remains posted until it is changed by the poster, while interactive content contains real-time communication Static is defined as something that doesn't change, so those communications will only change when the person who posted it removes it or makes a change. Interactive is live and constantly changing. Under FINRA rules, static must have approval prior to use, while interactive does not.

USATrade Securities, a FINRA member broker-dealer, is registered in 10 midwestern states. Regarding financial requirements, USATrade must meet those of A)the state in which the principal office of the member is located B)FINRA C)the state with the most stringent financial requirements D)the SEC

D)the SEC It may be assumed that a broker-dealer member of FINRA is also registered with the SEC. As such, when it comes to financial requirements, bonding, recordkeeping, and so forth, the SEC's requirements always trump those of the states.

KAPCO Securities is a broker-dealer registered with the SEC doing business throughout the Midwest. KAPCO must meet the net capital requirements of: A)the state with highest net capital requirements of the states in which it does business. B)each state in which they do business. C)the state in which its principal office is located. D)the SEC even if one or more of the states in which they are registered has a higher net capital standard.

D)the SEC even if one or more of the states in which they are registered has a higher net capital standard. SEC rules pre-empt those of the states. As long as the broker-dealer complies with the SEC's net capital rule, all state requirements are satisfied. It is state covered investment advisers who must meet the net worth (or capital) requirements of the state in which their principal office is located.

When an agent transfers employment from a broker-dealer registered with the SEC to a broker-dealer registered solely in this state: A)only the agent must notify the Administrator promptly. B)only the agent and the SEC-registered broker-dealer must notify the Administrator promptly. C)only the agent and the state registered broker-dealer must notify the Administrator. D)the agent, the former broker-dealer, and the current broker-dealer must all notify the Administrator.

D)the agent, the former broker-dealer, and the current broker-dealer must all notify the Administrator. When an agent transfers employment from any broker-dealer to any other broker-dealer, both the agent and the broker-dealers must notify the state securities Administrator.

In order to be in compliance with Section 301 of the Uniform Securities Act, a non-exempt transaction may take place in the state only if: A)the security is sold in an exempt transaction. B)it is an isolated nonissuer transaction. C)an appeal is made to the Administrator. D)the security is registered, exempt, or federal covered.

D)the security is registered, exempt, or federal covered. We are told that the transaction is not exempt so don't choose one of the two choices that are. Therefore, unless the security is exempt (or federal covered), the only way to have a legal sale is for it to be registered.

A Canadian broker-dealer is registered in Province Q. The firm has clients who vacation in several New England states and they would like to continue to do business with them while on their holidays. Under the Uniform Securities Act: A)this is permissible only if the broker-dealer is registered with the SEC. B)this would only be permitted if the trades were executed through an affiliated domestic broker-dealer who is licensed in those states. C)the broker-dealer may only accept unsolicited orders from their existing clients while they are vacationing in the U.S. D)this is permissible if the broker-dealer is properly registered in Province Q, deals only with existing clients, and registers in each of the states

D)this is permissible if the broker-dealer is properly registered in Province Q, deals only with existing clients, and registers in each of the states The Uniform Securities Act provides for a form of limited registration for Canadian broker-dealers wishing to do business with their clients who are vacationing or otherwise traveling through the United States. In order to qualify for the limited registration, the BD must be properly licensed in its home province and they're only dealing in the states is with an existing client.

A Canadian broker-dealer is registered in Province Q. The firm has clients who vacation in several New England states and they would like to continue to do business with them while on their holidays. Under the Uniform Securities Act: A)this is permissible only if the broker-dealer is registered with the SEC. B)this would only be permitted if the trades were executed through an affiliated domestic broker-dealer who is licensed in those states. C)the broker-dealer may only accept unsolicited orders from their existing clients while they are vacationing in the U.S. D)this is permissible if the broker-dealer is properly registered in Province Q, deals only with existing clients, and registers in each of the states.

D)this is permissible if the broker-dealer is properly registered in Province Q, deals only with existing clients, and registers in each of the states. The Uniform Securities Act provides for a form of limited registration for Canadian broker-dealers wishing to do business with their clients who are vacationing or otherwise traveling through the United States. In order to qualify for the limited registration, the BD must be properly licensed in its home province and they're only dealing in the states is with an existing client.

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 Administrator that the representative's registration is effective. B)immediately. C)within 48 hours. D)when informed by the investment adviser that the representative's registration is effective.

D)when informed by the investment adviser that the representative's registration is effective. Passing the exams does not automatically give one an effective investment adviser representative's license. Notice is received by the investment adviser from the appropriate state and/or federal authorities and then, in accordance with that firm's procedures, advisory activity may start. The Administrator does not have direct contact with the individual.

State registrations expire

December 31 of each year

Coordination - Docs needed

Filing fee, agreement to forward all future amendments to federal prospectus, and three copies of latest form of prospectus under 1933 act

What do federal covered sec needs for reg

Filing fee, consent to service of process, and if requested - copies of all documentation filed with SEC

Requirements for reg as an IA

Filing fees, surety bond posted, and consent to service of process + meet a min net worth requirement

Requirements for registration as BD

Filing fees, surety bond posted, and consent to service of process + meet a min net worth requirement

Notice filing is used

For federal covered investment companies to notify states they want to issue shares in and to who they have to pay their fee

Coordination is used

For nonexempt companies registering with the SEX

Red flag

High reward with little risk

IAR work for

IA

Why doesn't reg by qualification occur as often out of state

If a security is offered by a corporation beyond its own home state, the issuer must register with the SEC at the federal level. Registration by qualification, while permitted, would be an unlikely choice.

SEC Rule 147

Intrastate exemption - Sec registers in the state rather than the SEC - aka via qual coord etc

Rule 147 - Reg

Intrastate exemption - requires state but not federal registration

Qualification is for

Intrastate reg of companies not reg with the SEC

If a BD has a place of business in a state

It must register there

USA reg rules for Canadians

Limited reg for canadian BD who want to do business with their clients vacationing in the US. Must be properly licensed in home province and only deal in states with existing clients

Can people register by coordination

No, only securities

Do issuer's need to post a surety bond for reg

NO

Are a company's oil and gas limited partnership units exempt under fed covered - assuming their stocks bonds etc are on exchange

No, they must be registered in state unless they have another exemption

Are ratings ever a part of registration requirements

Never

When does Consent to serive renew/expire

Never, it is given with initial reg and is permanent

Are fingerprints required under USA

No

Does passig the 66 automatically make me a registered investment adviser

No - must still file U4, pay state license fee, and pass background check

IS there pro-rating for regstration fees - aka filing on june 30th

Not under USA, full fee due at filing. Some states make exceptions for late registrations

Under USA, how long is a security registered

One year after effective date, but if there are still unsold shares it can be extended

If the BD is reg in a state, does the agent have to be?

Only if they also do bus there

What aspect of a client's address matters when deciding if an agent needs to be reg

Permanaent address. AKA something like living in another state for school is ok, as long as youa re reg in their actual home state

Stocks on the OTCBB - registration

Require reg with the SEC and the state they will be offered in - Coordination

7 allows _ but not _

Solicit securities but no asset-based compensation

Who tells you your reg is active after passing 66

The IA you work for, admin never contacts you

when is an IA reg statement considered filed

The date received in the admin's office

Entanglement

The firm or person is a part of preparation of a third party post

Who must approve agent's sharing commissions (in the company)

The firm's principal

Exempt securities means what

The security is exempt from reg, the agent selling still has to reg

which is disclosed on Trade confirmations - current market price or trade price

The trade price, not the current market price, is always disclosed.

If a BD is a member of FINRA, what should you assume

They are registered with the SEC, and all federal/SEC rules trump state ones for that BD

A broker-dealer may be structured as

a corporation, a partnership, or a sole proprietorship.

Exclusion from agent - when selling what

Us Gov/munis, foreign diplomatic secs, US bank/saving companies,trusts, high rated commercial paper,

What happens when one firm succeeds another? Are there registration fees?

When one firm succeeds another, no fees are due until renewal date. However, the successor firm must file a consent to service of process at the time it registers.

When is a consent to service filed with admin

With the initial app

Are there states where an agent can't be registered with more than 1 BD

Yes

Can nonregistered clerical workers get bonuses without registering

Yes, as long as there is no direct relationship to any specific sales

What happens to agent's license/reg if the BD's is suspended

also suspended

Classes of federal covered securities

any security listed on a national securities exchange, any security equal to or senior in standing to one listed on a national securities exchange, or a right or warrant to purchase a security listed on a national securities exchange.

A broker-dealer's primary business is

effecting securities transactions for clients or for its own account

Purpose of NSMIA

eliminate dual registration or regulation of securities

What can the admin require from investment advisers

exams

consent to service

formal legal agreement whereby a registrant will be bound by a legal action or subpoena served on the Administrator as if it had been served on the registrant

When can an admin examine books/records of registrants who are out of state

he records may be examined at any time for any reason within or outside the state if it is in the public interest to do so.

When can agents sell solicited unregistered nonexempt securities

if the person is institutional

Exclusions from definition of agent include people working for ___, not ___

individuals working for an issuer, not a Bd

Registration by qualification occurs most often for

intrastate (single state) offerings, thnigs like common stock. It's long and cumbersome which is why it's not used as often.

Is a legend required for federal covered secs

nah

Can the admin request the issuer giive them a contact person listed in the state for the purposes of legal service

nah, that;s what consent to service is for

Are publishers of bona fide newspapers, magazines, and financial publications of general and regular circulation considered IA's

no

Are sole proprietorships incorporated

no

Can a bank be considered an investment adviser

no

Investment adviser app takes how long (assuming nothing goes wrong)

no later than noon on the 30th day

Is there a set reporting schedule for BD to admin

no, but admin can inspect their books at any time

Does the client matter in defining a BD

no, regardless of client, if they sell shit and have a place of bus, they are a BD

What is a contra party

person on other side of the trade

What is affinity fraud

raudulent offers are aimed at groups of people who share a similar interest Affinity fraud targets members of identifiable groups, such as the elderly, or religious or ethnic communities.

Who do IAR's register with? _ not _

states, not SEC

Are credit union secs exempt

yes

Are robo adviser portoflio analysis tools considered real recommendatons

yes

Can Admin order certain things to be omitted from a reg statement

yes

Can a person register as a BD

yes

Can admin request an issuer's articles of incorporation

yes

Can you register as a BD and an IA at the same time

yes

Do you need to be reg to sell fed credit union secs

yes

Does an agent have to reg in a state if selling exempt securities

yes

Does an agent submit a separate reg for each BD they are reg with

yes

Is registration of an agent required if they solicit sale of securities by phone to < 6 people in that state

yes

Do you have to be reg to sell commercial paper

yes if for a BD, no if for a bank

Do you need to reg if an existing client moved to another state 35 days ago

yes, >30

Can a sole proprietorship register as a BD

yes, according to 1956 act

Are bonds a feder covered sec

yes, bc senior to stock (assum stock is on ana exchange

Can the admin require an agent to post a surety bond

yes, but it isn't automatically required. they have to require it specifically

Are consent to service of process due with notice filings?

yes, due with any registration

If Somerville Discount Securities has its principal office in New Jersey and recently registered a branch office in Minnesota, which of the following statements is TRUE? A)Each agent must be registered in the appropriate state before soliciting or taking orders. B)Agents working in the branch office that are licensed only in Minnesota may take unsolicited orders from New Jersey residents. C)Agents working in the principal office that are licensed only in New Jersey may take unsolicited orders from Minnesota residents. D)Each agent is automatically registered in both states.

A)Each agent must be registered in the appropriate state before soliciting or taking orders. Agents must be registered in every state in which they do business. An agent is not automatically registered in a state just because his employer is registered in that state.

An agent terminates his association with broker-dealer A and begins to work for broker-dealer B. Under the Uniform Securities Act, which of the following must take place? Broker-dealer A must notify the Administrator. Broker-dealer B must notify the Administrator. The agent must notify the Administrator. The supervisor to which the agent reported must notify the Administrator. A)I, II and III. B)I, II, III and IV. C)I, III and IV. D)II, III and IV.

A)I, II and III. In the event an agent transfers from one broker-dealer to another broker-dealer, all three (the former employer, the new employer, and the agent) must report the transfer to the Administrator.

If Wallace resigned his position as an agent with Rockland Securities to work for Gibraltar securities, which of the following parties must notify the Administrator of Wallace's move? A)Rockland, Gibraltar, and Wallace. B)Gibraltar Securities and Wallace. C)Wallace and Rockland. D)Rockland Securities and Gibraltar.

A)Rockland, Gibraltar, and Wallace. When an agent with one broker-dealer resigns and affiliates with another, both broker-dealers and the agent must notify the Administrator of the change in registration. Notification is accomplished by filing Forms U-5 and U-4 with FINRA's CRD.

Under the Uniform Securities Act, which of the following is responsible for notifying the Administrator when an agent changes his place of employment from one broker-dealer to another? A)The agent, the former employer, and the new employer. B)New broker-dealer. C)Agent. D)Former broker-dealer.

A)The agent, the former employer, and the new employer. All three parties must notify the Administrator.

Sarah has passed her Series 6 qualification exam but not the Series 63. As Jack's assistant, Sarah has frequent telephone contact with Jack's customers to whom she provides account information and current stock quotes. In this situation Sarah is: A)not in violation of any applicable statutes. B)in violation of the Securities Act of 1933. C)in violation of the Uniform Securities Act. D)in violation of the Securities Exchange Act of 1934.

A)not in violation of any applicable statutes. Provided Sarah does not solicit business, offer advice to customers, or accept orders, she has not committed a violation of any act.

Under the Uniform Securities Act, an agent's license is effective for A)the time remaining until December 31 of that year at which time it must be renewed B)one year initially, and then renewing as of the following December 31 C)20 years D)18 months, of which the first six months is a probationary period

A)the time remaining until December 31 of that year at which time it must be renewed Registrations expire annually on December 31 unless renewed. The initial license will, obviously, be for less than one year.

Under state law, the registration of an agent of a broker-dealer is in effect until A)the last day of his employer's fiscal year B)December 31 unless renewed C)the anniversary of initial registration D)withdrawn by the agent or revoked by the Administrator

B)December 31 unless renewed Under state law, registrations for broker-dealers, agents, investment advisers, and investment adviser representatives expire on December 31 of each year unless renewed.

Agents A and B work for the same firm and wish to share commissions. Agent A is licensed in states X, Y, and Z. Agent B is licensed in states X, Y, and C. Which of the following statements is TRUE in regard to their sharing commissions? A)All commissions from agents A and B can be shared. B)Only the commissions from states X and Y could be shared. C)Commissions cannot be shared. D)Only the commissions from states Z and C could be shared.

B)Only the commissions from states X and Y could be shared. In order to share commissions, agents must be registered as an agent for the same broker-dealer or for an affiliated broker-dealer. Additionally, in order to receive a commission, an agent must be registered in the state where the transaction is made.

When a brokerage firm sells stock from its own inventory, it is acting in the capacity of A)an agent, and charges a commission B)a principal, and charges a markup C)an agent, and charges a markup D)a principal, and charges a commission

B)a principal, and charges a markup A broker-dealer that purchases securities for, or sells securities from, its inventory is acting in the capacity of a principal. Principals charge markups on sales from inventory. When acting in the capacity of agent (facilitating a transaction between a buyer and seller), the broker-dealer receives a commission.

States may require a surety bond as a prerequisite to registration under the Uniform Securities Act for each of the following EXCEPT a(n): A)broker-dealer. B)issuer. C)state registered investment adviser. D)agent.

B)issuer. The common requirements are to pay filing fees, post a surety bond, and consent to service of process for all three of these designations. For broker-dealers and state registered investment advisers, an additional net capital or net worth requirement has to be met.

State securities law generally limits agents to employment with a single broker-dealer unless: A)multiple employment is widespread and does not require specific Administrator approval. B)the Administrator, by rule or order, authorizes employment with more than one broker-dealer. C)permission is received from both broker-dealers regardless of Administrator approval. D)permission has been granted by the SEC.

B)the Administrator, by rule or order, authorizes employment with more than one broker-dealer. Unless the broker-dealers are under common control, the USA generally limits agents to single employment unless the Administrator, by rule or order, authorizes multiple affiliations.

Why aren't muni's considered federal covered

Because these municipal securities are issued in the state in which they are offered, there is no federal authority to regulate them. They are not federal covered securities and can be regulated by the state in which they are offered (although they are exempt from registration under the USA).

Which of the following statements regarding registration of securities professionals under the Uniform Securities Act are TRUE? -A successor firm is exempt from paying registration fees until the renewal date. -A successor firm is exempt from filing a consent to service of process until the renewal date. -Investment advisers with discretion over client accounts are not required to maintain a certain minimum net worth. -When an agent with an SEC-registered broker-dealer terminates the association, both the agent and the broker-dealer must notify the Administrator. A)III and IV. B)II and III. C)I and IV. D)I and II.

C)I and IV.

An issuer of federal covered securities, whose registration is effective under the Securities Act of 1933, would use which of the following procedures to permit the sale of its securities in a specific state? A)Qualification. B)Registration. C)Notice filing. D)Coordination.

C)Notice filing. Notice filing is the procedure by which federal covered securities, most commonly registered investment company securities, receive clearance for their securities to be sold in a specific state. No formal registration is required, but payment of fees and filing of certain documents may be.

In the securities industry, when a person is acting in an agency capacity, the form of compensation received is A)markup or markdown B)fees C)commission D)account maintenance charges

C)commission Broker-dealers act in the capacity of brokers (agency); they earn commissions. When acting in the capacity of a dealer (principal), the compensation comes from markup or markdown. Compensation in the form of fees is most common for investment advisers.

The agreement that the Administrator can receive subpoenas on behalf of a registered agent, broker-dealer, or investment adviser involved in any securities sale that violates the Uniform Securities Act is the: A)agreement to actionable offenses. B)right of retribution. C)consent to service of process. D)right of rescission.

C)consent to service of process. Every applicant for registration and every issuer must file an irrevocable consent to service of process appointing the Administrator as attorney to receive service of any lawful process in any civil suit, action, or proceeding. It has the same legal effect as if the person had been served personally.

The most common way in which to distinguish whether social media content is static or interactive is A)the ability for others to like it B)the ability for others to comment on it C)the ability for others to change it D)the ability for others to link to it

C)the ability for others to change it Static content can only be changed by the originator (or someone under that person's control).

When must amount of commission be disclosed

Commissions must always be disclosed

Under the Uniform Securities Act, if not denied, an application for registration as investment adviser will generally become effective how soon after filing? A)10 days. B)Immediately. C)15 days. D)30 days.

D)30 days. If not denied and no disciplinary proceedings are instituted, an application for registration becomes effective at noon on the 30th day after being filed.

Can an employee of a licensed BD ever sell securities as an unreg agent

Never. Even when securities are exempt.

Do you need to reg if an existing client moved to another state 20 days ago

No

Effective date of reg by set by

SEC

Is it ok if a broker-dealer registered in one state contacts an existing customer in another state and that customer is not a resident of the other state

Yes, under USA here they are technically exempt from being considered a BD as long as they have no place of business in the state

What is Notice Filing

merely the filing of certain documents in order for the registrant to be able to offer securities in that state

Do agents sharing commissions (same company) have to disclose that they are being shared?

no

What are federal covered securities

securities refer to securities exempt from registration because they are regulated, or covered by federal legislation

What did NSMIA 1996 do (specific - state power)

states may not impose capital, custody, and recordkeeping requirements that exceed requirements under federal securities law

What did NSMIA 1996 do (general)

streamlined much of federal and state securities law and specifically prevented dual regulation

Does admin have power to conduct an on-site investigation of an investment adviser in his state if they adviser has no office there?

yes - If he is registered in the admins' state

Investment advisers with discretionary authority must maintain minimum net worth of ___

$10,000

Under the Uniform Securities Act, an agent registered in one state may transact business in another state in which he is not registered with which of the following? An existing client visiting the state for a 2-week period. An existing client who moved to the state 6 months ago. An existing client who moved to the state less than 30 days prior to the transaction. An acquaintance from another state who requests that the agent execute transactions on his behalf. A)I and III. B)II and IV. C)I and IV. D)II and III.

A)I and III. 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 30 days.

If required by the Administrator, a stock traded on the Nasdaq Capital Market would most likely use which of these? A)Notice filing. B)Qualification. C)Criminalization. D)Coordination.

A)Notice filing. Stocks listed on any of the three tiers of the Nasdaq Stock Market are federal covered securities and, as such, can only be required to notice file.

Which of the following statements is NOT true regarding the authority of the Administrator under the Uniform Securities Act? A)The Administrator may not examine the records of a broker-dealer without seeking a court order from a federal court. B)The Administrator may require financial reports from broker-dealers. C)The Administrator may require examinations for investment advisers. D)The Administrator may require a broker-dealer to have a minimum net capital as a condition of registration.

A)The Administrator may not examine the records of a broker-dealer without seeking a court order from a federal court. The Administrator has inspection power to view all records within or outside the state as is appropriate or necessary in the public interest, without seeking court approval Administrators may require minimum capitalization as a condition of registration. The Uniform Securities Act states that the Administrator may, by rule, provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants. As a practical matter, an oral examination would apply to the business entity (broker-dealer or investment adviser) while written examinations are taken by agents and investment adviser representatives. The Administrator is also given the authority by the act to require the filing of financial reports regarding the net worth of the firm.

Under the USA, a person who has passed the appropriate NASAA examination but whose license is pending may participate in: A)aiding the firm's research department. B)prospecting for new clients by mail. C)prospecting for new clients in person. D)accepting unsolicited orders.

A)aiding the firm's research department. A person who has passed the NASAA exam cannot transact business until the Administrator notifies the employer that the registration is effective.

Which of the following statements are TRUE? An agent must register in the state in which he advertises and solicits a security. To make sales, an agent need not register in a state in which the broker-dealer is already registered. Under no circumstances may an agent register with two unrelated broker-dealers. A secretary for a broker-dealer who, as a courtesy, takes orders for the broker-dealer's clients must be registered. A)III and IV. B)I and IV. C)II and III. D)I and II.

B)I and IV. An agent must be registered in the state in which a security is advertised and solicited. A secretary who takes orders for the broker-dealer's clients must be registered. If the state Administrator specifically grants an exception, an agent may be registered with two unrelated broker-dealers. The fact that a broker-dealer is registered in a state does not qualify the agent for sales unless he is also properly licensed in that state.

Which of the following may be required by the Administrator to post surety bonds? An agent who has discretion over client funds and securities. A broker-dealer who has custody of, or discretion over, client funds and securities. An investment adviser who has custody of, or discretion over, client funds and securities. A)III only. B)I, II and III. C)I only. D)I and III.

B)I, II and III. A broker-dealer, investment adviser, or agent who has discretion over or, in the case of broker-dealers and advisers, custody of funds or securities may be required to post a bond.

Sharon Smith is an agent for Highwater Securities, a broker-dealer registered in all 50 states. Sharon receives an unsolicited order from a bank located in State X, a state in which she has no place of business. Under the Uniform Securities Act, A)because Sharon has no place of business in State X and the order is unsolicited, Sharon may accept the order without registering in State X. B)Sharon must be registered in State X in order to accept the order C)because Highwater Securities is registered in all 50 states, Sharon must also be registered in all of them. D)because Sharon has no place of business in State X and the client is an institution, Sharon may accept the order without registering in State X.

B)Sharon must be registered in State X in order to accept the order Regardless of whether the security is exempt or the transaction is exempt, one must be licensed in any state which is the domicile of a client placing an order. One does not have to be registered as an agent in every state the BD is, only in those where she expects clients to reside.

Trade confirmations sent by broker-dealers to their customers must always include A)the current market price of the security traded B)the amount of commission charged C)the tax identification number of the customer D)the amount of markup or markdown charged

B)the amount of commission charged Commissions must always be disclosed. Markup or markdown has to be disclosed under certain, but not all, situations. The trade price, not the current market price, is always disclosed.

To register a sole proprietorship as an investment adviser in a state, the application for initial registration (Form ADV) must be filed with the appropriate party. This application must include: a consent to service of process. the appropriate fees. any information to be furnished or disseminated to any client or prospective client. a copy of the articles of incorporation for the business. A)II and III. B)I, II, III and IV. C)I, II and III. D)I and IV.

C)I, II and III. To register as an investment adviser in a state, Form ADV is filed with the Administrator or with a central registration depository designated by the Administrator. The application must include, among other things, a consent to service of process, appropriate fees, and the brochure or any other information that will be used to solicit clients. Sole proprietorships are not incorporated.

Of the popular social media sites, the one most thought of as a business networking site is A)Instagram B)Twitter C)LinkedIn D)Facebook

C)LinkedIn In most regulatory literature, LinkedIn is the most common form of social media used as the example of business networking.

Which of the following securities is most likely to register by qualification in the state of Virginia? A)An offering of common stock by a Virginia-based corporation that will be offered on a nationwide basis. B)An offering of common stock by a Virginia-based corporation to residents of Virginia and the Carolinas. C)An offering of common stock by a Virginia-based corporation that will be simultaneously registered at the federal level. D)An offering of common stock by a Virginia-based corporation to Virginia residents only.

D)An offering of common stock by a Virginia-based corporation to Virginia residents only. Although any issuer may register its securities at the state level by qualification, this cumbersome means of registration is mainly used in conjunction with intrastate (single state) offerings. If a security is offered by a corporation beyond its own home state, the issuer must register with the SEC at the federal level. Registration by qualification, while permitted, would be an unlikely choice.

A local customer of broker-dealer A is on vacation in Nevada. Broker-dealer A, who is registered and maintains an office in Florida, wishes to make the customer aware of an investment opportunity that has just become available. Which of the following is TRUE? A)Broker-dealer A must notify the Nevada Administrator before calling this customer in Nevada. B)Broker-dealer A may not solicit this customer in Nevada unless broker-dealer A and the agent making the call are registered in Nevada. C)Broker-dealer A may not solicit this customer in Nevada unless the broker-dealer has a branch office registered in Nevada. D)Broker-dealer A may solicit this customer in Nevada.

D)Broker-dealer A may solicit this customer in Nevada. This is an example of the Uniform Securities Act's position that, in certain situations, a broker-dealer is not a broker-dealer. If a broker-dealer registered in one state contacts an existing customer in another state and that customer is not a resident of the other state, the broker-dealer is not defined as a broker-dealer in the state in which the contact is made and is therefore not subject to the laws of that state. Of course, this is only true when the broker-dealer does not have an office in that state.

Under the USA, it is unlawful for a person to offer or sell a security in a state unless the security is: a federal covered security. exempt from registration under the USA. registered in the state. sold in an exempt transaction. A)II, III, or IV. B)I or IV. C)II or III. D)I, II, III or IV.

D)I, II, III or IV. It is unlawful to sell a security in a state unless the security is registered in that state, exempt from registration under the USA, sold in an exempt transaction, or is a federal covered security.

Kapco Advisers registers with the Administrator on April 1. Pete Patel, an IAR with Kapco, registers on the same day. Both of them file renewal papers, accompanied by the appropriate fees, on March 31 of the following year. Which of the following statements are TRUE? Kapco's renewal was timely. Kapco's renewal was late. Patel's renewal was timely. Patel's renewal was late. A)I and IV. B)II and III. C)I and III. D)II and IV.

D)II and IV. Regardless of when initial registration occurs, the renewal date for all professionals is December 31.

While several methods of registration are described under the Uniform Securities Act, which of the following would be most appropriate for an investment company registered with the SEC under the Investment Company Act of 1940? A)Coordination. B)Registration. C)Qualification. D)Notice filing.

D)Notice filing. Federal covered securities (those listed on the NYSE, the CHX, and the Nasdaq Stock Market) are exempt from registration under the USA. However, the states are permitted to assess fees and some require filing of certain information. This is notice filing and most commonly occurs with investment companies registered under the Investment Company Act of 1940.

Does admin need a court order to examine records of a BD

no

Is a consent to service is an authorization to issue an injunction?

no

A broker-dealer having no place of business in a state is not required to be registered in that state if the broker-dealer: A)does no business in that state other than with institutional clients. B)is licensed/registered in its state of residence. C)is a member of FINRA. D)is a member of the New York Stock Exchange.

A)does no business in that state other than with institutional clients. A broker-dealer must be registered in every state it sells or offers to sell securities, unless an exemption is available. If a broker-dealer has no office in a particular state and no business is done in that state other than with institutional clients, registration there is not required.

If an agent representing a broker-dealer located in Utah wishes to solicit business in California, under the Uniform Securities Act, the agent would: A)have to register in California. B)be allowed to solicit if the securities are exempt. C)not have to register if the broker-dealer is registered in California. D)not have to register in California.

A)have to register in California. Typically, an agent, when representing the broker-dealer to solicit securities transactions, must register in every state where business is conducted even if the securities or the transactions are exempt.

The National Securities Markets Improvement Act of 1996 (NSMIA), which amended the Uniform Securities Act, pre-empts state registration of federal covered securities. Under the NSMIA, all of the following are federal covered securities EXCEPT: A)municipal securities of an issuer within the state of issuance. B)warrants trading on the OTC Bulletin Board offered by a company whose common stock trades on the Nasdaq Stock Market. C)securities issued by unit investment trusts registered under the Investment Company Act of 1940. D)securities offered pursuant to the provisions of Rule 506 of Regulation D under the Securities Act of 1933.

A)municipal securities of an issuer within the state of issuance. The NSMIA is designed to eliminate dual registration or regulation of securities. Securities issued by any investment company registered under the Investment Company Act of 1940 are federal covered. Securities offered pursuant to the provisions of Rule 506 of Regulation D under the Securities Act of 1933 are federal covered. Rule 506 is the exemption from registration for the private offering of securities to a limited number of investors, often called private placements. Finally, if the common stock of an issuer is traded on the Nasdaq Stock Market, then any security equal to it (rights and warrants) or senior to it (preferred stock and debt securities), is also federal covered.

The Uniform Securities Act authorizes the Administrator to make certain demands of broker-dealers. In general, the Administrator would not require a broker-dealer to A)post a surety bond if it does not have investment discretion over client accounts or do not maintain custody of customer funds and/or securities. B)promptly file a correcting amendment to any document on file with the Administrator which becomes inaccurate or incomplete in any material respect. C)publish an announcement of the application for registration in a newspaper published in the state. D)file various financial report

A)post a surety bond if it does not have investment discretion over client accounts or do not maintain custody of customer funds and/or securities. The question asks for something that cannot be required by the Administrator. The other choices are requirements you should memorize. In general, the Administrator can require a bond only if registrants have custody or discretion.

First Growth Securities, Inc., a member of the Financial Industry Regulatory Authority (FINRA), has its main office in Illinois and is therefore: A)required to register as a broker-dealer in the state of Illinois. B)a registered investment adviser licensed to sell securities in Illinois. C)automatically registered as a securities agent in Illinois. D)registered by FINRA to sell securities in Illinois.

A)required to register as a broker-dealer in the state of Illinois. Securities firms that are members of FINRA must register as broker-dealers in the states in which they conduct business. Under the USA, broker-dealers are firms engaged in the business of effecting security transactions in customer or proprietary accounts. A broker-dealer is not a registered investment adviser, although many broker-dealers own separate legal subsidiaries that are investment advisers. FINRA does not license its members to conduct business in the states; the state securities licensing agent is the state securities Administrator. Also, a broker-dealer is not an agent; an agent is a person who is employed by a broker-dealer to conduct securities transactions as a representative of the broker-dealer.

Registration by qualification is effective: A)when determined by the Administrator. B)when the federal registration becomes effective. C)no earlier than ten days after the filing date. D)20 days after the filing date.

A)when determined by the Administrator. Registration by qualification is effective when determined by the Administrator. Qualification is the only form of registration where the timing of the effective date is determined by the Administrator.

Under the Uniform Securities Act, when must a consent to service of process be filed with the Administrator? A)It need not be filed, unless requested by the Administrator. B)With the original application only. C)With the original application and renewal. D)When a case is pending.

B)With the original application only. Initial applications for registration must be accompanied by a consent to service of process. This document becomes a permanent part of the application and appoints the Administrator to accept subpoenas on behalf of the applicant.

A broker-dealer registered with State A created a website 2 years ago to promote their services. Recently, they hired a new media person who totally redesigned the site. Under the recordkeeping requirements of the Uniform Securities Act, A)there are no requirements for storage of electronic data B)a copy of the original website page must be maintained for three years from original use C)copies of both the original and the new website page must be maintained for five years after original use D)a copy of the new website page must be maintained for a period of three years from the first use of the original site

B)a copy of the original website page must be maintained for three years from original use Websites are treated as would be any other advertisement. So, the original site design is kept for three years and, whenever revised, the new copy is maintained and starts a new retention requirement for that copy. Therefore, you will likely have several different versions in your advertising file at the same time.

It is a violation of the Uniform Securities Act if an agent: A)offers or sells any security unless it is registered. B)files a fraudulent application. C)splits commissions with another agent in the office and fails to disclose this to clients. D)makes any material representation in the offer or sale of a security.

B)files a fraudulent application. It is a violation of the Uniform Securities Act to file a fraudulent or misleading application for registration as a securities industry professional (agent, broker-dealer, or investment adviser). An agent may always make material representation in the sale of a security; it is a material misrepresentation that is not permitted. An unregistered security may be sold in an exempt transaction and an exempt security does not need registration. One of the few things that does not have to be disclosed to clients is a commission sharing arrangement with another agent in the office.

The Administrator may require registered broker-dealers to comply with all of the following EXCEPT: A)filing financial information periodically. B)renewal of registration semiannually. C)filing of advertisements and sales literature. D)keeping records for 3 years.

B)renewal of registration semiannually. Registrations are renewed annually. The Administrator may require registered broker-dealers to file advertisements, sales literature, and financial reports. The Administrator may require that records created by the broker-dealer be maintained for any period of time; 3 years is the most common requirement for registered broker-dealers.

Broker-dealers who charge fees or commissions for securities transactions are prohibited from: A)operating as a market maker in more than one stock. B)soliciting nonexempt transactions in unregistered, nonexempt securities. C)engaging in activities common to a broker-dealer when underwriting a corporate offering acting as an agent for the issue. D)acting as a principal in a corporate underwriting.

B)soliciting nonexempt transactions in unregistered, nonexempt securities. Under the Uniform Securities Act, the solicitation of unregistered nonexempt securities by a broker-dealer prior to registration is prohibited. Broker-dealers may act as principal in corporate underwritings and as market makers in any number of stocks.

Each of the following statements regarding registration of securities by coordination is true EXCEPT: A)the registration becomes effective at the state level concurrent with SEC registration if the Administrator has not entered an order to deny it. B)state registration must be effective prior to federal registration. C)the registration statement must contain or be accompanied by consent to service of process. D)the Administrator may reduce the required time that the registration statement must be on file prior to becoming effective.

B)state registration must be effective prior to federal registration. State registration must be coordinated with federal registration. In most cases, the registration statement must be on file with the Administrator for ten days, but the Administrator has the power to shorten that period. The registration statement becomes effective concurrent with the SEC and must contain or be accompanied by consent to service of process.

Each of the following statements about postregistration provisions is true EXCEPT: A)a correcting amendment must be filed with the Administrator if any information filed becomes inaccurate or incomplete. B)the securities Administrator does not have the authority to conduct an on-site examination of an investment adviser registered in his state if the adviser does not have an office in that state. C)a registered investment adviser may be required to file advertisements. D)both broker-dealers and investment advisers must comply with recordkeeping rules.

B)the securities Administrator does not have the authority to conduct an on-site examination of an investment adviser registered in his state if the adviser does not have an office in that state. Administrators have the authority to conduct an on-site examination of a registered investment adviser even if there is no place of business maintained in the Administrator's state. Under the Act, Administrators may require the filing of advertising used by broker-dealers and investment advisers, who must also comply with certain recordkeeping requirements and file correcting amendments.

Under the National Securities Markets Improvement Act of 1996, the federal covered security exemption from state registration includes: -securities issued by investment companies registered under the Investment Company Act of 1940. -securities traded on the Nasdaq Stock Market. -securities traded on the New York Stock Exchange. -securities traded on the American Stock Exchange. A)III and IV. B)I and II. C)I, II, III and IV. D)II and III.

C)I, II, III and IV.

Under the Uniform Securities Act, which of the following statements are TRUE? A broker-dealer may not also be registered as an investment adviser. A broker-dealer may be structured as a corporation, a partnership, or a sole proprietorship. A broker-dealer's primary business is effecting securities transactions for clients or for the broker-dealer's own account. A broker-dealer need not register in a state in which it has noninstitutional clients unless it has an office in that state. A)I and IV. B)III and IV. C)II and III. D)I and II.

C)II and III. A broker-dealer may be structured as a business entity or a sole proprietorship. Its primary business is effecting securities transactions for clients or for its own account. A person may be registered as both a broker-dealer and an investment adviser at the same time. Although a person is not a broker-dealer in this state if there is no office in this state and transactions within this state are limited to issuers, other broker-dealers and institutions if the broker-dealer wishes to offer securities to individuals, it must register in the state.

An application to register securities may be filed under the USA by a(n): agent of a broker-dealer. broker-dealer acting on behalf of the issuer. person on whose behalf the offering is made. issuer. A)II and IV. B)I, II, III and IV. C)II, III and IV. D)I only.

C)II, III and IV. Registration statements may be filed by a broker-dealer, a person on whose behalf the offering is made (e.g., a offering made by a large shareholder), or more commonly, the issuer.

Under the USA, an exemption from registration is available to common stock listed on the: Montreal Stock Exchange. New York Stock Exchange. American Stock Exchange. Nasdaq Stock Market. A)II and III. B)I, II and III. C)II, III and IV. D)I, II, III and IV.

C)II, III and IV. The federal covered security exemption applies to stocks listed on the major stock exchanges in the U.S. Included in that is any stock on Nasdaq.

Which of the following statements regarding state registration of securities is TRUE? A)Registration by coordination is effective on the 10th day after filing with the Administrator. B)Notice filing is effective when ordered by the Administrator. C)Registration by coordination is effective concurrent with federal registration. D)Registration by qualification is effective after 30 days.

C)Registration by coordination is effective concurrent with federal registration. Coordination is the method used to register a security simultaneously under the Securities Act of 1933 and under the USA in a state. If the security's federal registration is pending and the Administrator has received all of the required material, the two registrations can be declared effective at the same time.

While an application for registration as an agent of a broker-dealer is still pending, that person would be permitted to: A)limit her acceptance of orders to those from the broker-dealer's existing clients. B)engage in no activity at the office other than studying for the exam. C)assist registered employees of the firm by doing research on securities they are following. D)accept unsolicited orders only.

C)assist registered employees of the firm by doing research on securities they are following. While registration as an agent is pending, the applicant can take no active role in the sale or offering of securities. However, performing research on an internal basis does not involve contact with the public in a sales effort and would be permitted.

Broker-dealers are not required to keep: A)financial records. B)customer account records. C)copies of client's tax returns. D)blotters.

C)copies of client's tax returns. There is no requirement for broker-dealers or their agents to maintain copies of client's tax returns. A firm's blotter is its record of original entry for all money and securities transactions.

An individual currently registered in State A would not have to register as an agent in State B if he: A)solicited only 5 individuals living in State B during a 12-month period. B)made solicitations for unregistered, exempt securities to residents of State B. C)received an unsolicited call from an existing customer currently on vacation in State B who wishes to purchase a particular stock listed on the NYSE. D)made a offer of securities to a resident of State B who is an existing customer of the broker-dealer.

C)received an unsolicited call from an existing customer currently on vacation in State B who wishes to purchase a particular stock listed on the NYSE. As long as the agent is properly registered in the customer's state of residence, (and he must be if this is an "existing" customer), transactions made in another state being visited by the client do not require the registration of the agent. A customer living in State B can only be called by an agent registered in that state, whether or not the securities are exempt. There is no de minimis exemption for broker-dealers or agents.

Under the Uniform Securities Act, an employee of a licensed broker-dealer firm is allowed to sell securities as an unregistered agent when: A)the employee is not paid any commission or salary. B)the securities are exempt. C)under no circumstances. D)the transactions are exempt.

C)under no circumstances. It is unlawful for a person to transact business as a representative of a broker-dealer unless that person is registered as an agent, even if the securities are exempt.

Under the National Securities Markets Improvement Act of 1996 (NSMIA), states are prevented from: I. registering securities. II. establishing capital and custody requirements that exceed those provided for in the Securities Exchange Act of 1934. III. establishing recordkeeping requirements for broker-dealers or investment advisers that exceed those required under federal securities law. IV. registering investment advisers. A)I and III. B)III and IV. C)I and IV. D)II and III.

D)II and III. The NSMIA streamlined much of federal and state securities law and specifically prevented dual regulation. As a result, states may not impose capital, custody, and recordkeeping requirements that exceed requirements under federal securities law. States can register securities and investment advisers that are not covered by the registration requirements of federal legislation.

Which of the following statements regarding an agent's registration is most accurate? A)If the broker-dealer with which that agent is registered should have its registration revoked, the agent's license will be held by the Administrator and the agent will be required to register with an active broker-dealer within 30 days. B)Registration of a broker-dealer in a specific state automatically registers all of the firm's agents in that state as well. C)If the broker-dealer with which that agent is registered should have its registration revoked, the agent may continue to do business only with existing clients and may not acquire any new ones until registered with an active broker-dealer. D)Revocation of the registration of that agent's broker-dealer will result in cancellation of that agent's effective registration.

D)Revocation of the registration of that agent's broker-dealer will result in cancellation of that agent's effective registration. The registration of an agent is not effective during any period when he is not associated with a particular broker-dealer registered under the Uniform Securities Act. Therefore, when the broker-dealer's registration is revoked, the agent's license is no longer in effect. The exam may refer to the agent's registration being placed into suspense which has the same meaning. The Administrator does not "hold" licenses. Agents must register in each state in which they wish to do business; there is no automatic registration other than for certain officers and partners when the firm first registers.

A consent to service of process required by an Administrator is a(n): A)agreement to perform all services and duties that the Uniform Securities Act (USA) requires of those individuals covered by the USA. B)formal statement declaring that an investment adviser will comply with all advertising requirements of the USA. C)legal procedure that authorizes the Administrator to issue injunctions. D)agreement whereby a registrant will be bound by any legal action or subpoena served on the Administrator as if it had been served on the registrant.

D)agreement whereby a registrant will be bound by any legal action or subpoena served on the Administrator as if it had been served on the registrant.

A woman wants to buy from an agent who is not registered in her state. She decides to use a friend's address in the state in which the agent is licensed. This action is: A)acceptable because the agent can do business only with those who have a residence address in those states in which he is registered. B)not acceptable because the other party does not know you are using the address. C)acceptable as long as she has her friend's permission to use the address. D)not acceptable because there are no circumstances under which you are permitted to use someone else's address as yours.

D)not acceptable because there are no circumstances under which you are permitted to use someone else's address as yours. This should be obvious. The new account form must always include your residence address.

One method of securities registration under the Uniform Securities Act is Qualification. The effective date of a security registered using this method is: A)within 2 business days of the filing of maximum and minimum proposed offering prices. B)by Noon of the 30th day following the filing of the application. C)when the offering is made effective by the SEC. D)when so ordered by the Administrator.

D)when so ordered by the Administrator. Registration by Qualification becomes effective on the date set by the Administrator

What form is filled when an investment adviser registers

Form ADV