Series 63 Chapter 1 Continued Further
While registration as an agent is pending, the individual would be permitted to send out confirmations of order executions to customers accept unsolicited orders only ask registered agents to explain their sales techniques to him offer exempt securities only
I and III While registration is pending, the only activity that the future agent may engage in is clerical, administrative or related to training.
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.
II and III NOT I, II and III Investment advice DOESNT have to be in writing An investment adviser provides advice related to securities for compensation. However, the advice may be given orally or in writing.
According to the Uniform Securities Act, a person representing an issuer in the sale of which of the following securities would have to be registered as an agent?
Securities issued by a federal credit union An individual is exempt from registering as an agent only when representing the issuer in one of the limited group of five exempt securities, or in any exempt transaction. Oddly enough, a federal credit union is not on that list.
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
could not sell without being registered as an agent in State B Although securities issued by a building and loan association are included in the Uniform Securities Act's list of exempt securities, they are not included in the group of exempt securities where employees selling on behalf of the issuer are excluded from the definition of agent. Please see your LEM for the 5 categories of exempt securities that qualify for that exclusion.
Under all of the following circumstances, the USA requires investment advisers with no place of business in the state to register EXCEPT
when an adviser only provides advice to registered investment companies An adviser that only provides investment advice to investment companies registered under the Investment Company Act of 1940 is federal covered and does not have to register in a state, regardless of whether or not it has a place of business there. An adviser that provides advice only to 401(k) plans or other tax qualified employee benefit plans with $1 million in assets (not $250,000) is not required to register in a state in which it does not have a place of business. The assets of the adviser is not what determines becoming a federal covered adviser; it is assets under management and the determining factor is the AUM now, not the range over the previous 10 years.
All of the following statements regarding registration of broker-dealers under the Uniform Securities Act are true EXCEPT
a successor firm is exempt from filing a consent to service of process until the renewal date 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. Broker-dealers with discretionary authority may be required to post a surety bond or maintain minimum net capital. However, no state can impose financial or recordkeeping requirements that exceed those of the SEC. SO BDs with discretionary authority MAY be required to post a surety bond or meet maintain min net capital
Which of the following is (are) NOT exempt from registration as an investment adviser representative in the state in which they maintain a place of business? A certified financial planner who prepares financial plans and whose only compensation is commissions An insurance agent who prepares comprehensive financial plans and receives commissions on any insurance products purchased by his clients A broker-dealer with extensive business in the state A mutual fund company with offices and clients in the state
I and II NOT I only A certified financial planner who prepares financial plans for commissions must register in the state as an investment adviser representative because the commissions represent compensation for advice. An insurance agent who prepares comprehensive financial plans for commissions is also acting in the capacity of an investment adviser representative and must register accordingly. In both cases, these individuals are holding themselves out as offering investment advice because, at least in the eyes of the USA, there is no such thing as a comprehensive financial plan that does not involve securities. The commissions they receive are considered indirect compensation for the rendering of investment advice. Broker-dealers and mutual fund companies are not investment advisers under the Uniform Securities Act. Insurance Agent here IS a a financial advisor here because NO such thing as a comprehensive investment plan without securities
An investment adviser representative may perform which of the following functions? Solicit for advisory business Manage advisory accounts Make specific securities recommendations Supervise those who render advice
I, II, III, and IV
A state Administrator may require an applicant for registration to do which of the following? Furnish information about any SEC adjudications in the past Pay a registration fee Pass a qualification examination Place an advertisement in one or more newspapers circulated in the state
I, II, III, and IV In general, the application for registration will request information about any disciplinary actions, such as an adjudication by the SEC at any time in the past, and require an applicant to pay a fee, pass an examination, or place an advertisement in a local newspaper before granting registration.
Which of the following are not specifically excluded from the definition of an investment adviser under the Uniform Securities Act? An investment adviser representative of an advisory firm who makes securities recommendations on a regular basis for compensation A temporary employee hired to assist in administrative responsibilities of an advisory firm Any person who is a federal covered investment adviser A person who, on a regular basis for compensation, offers specific investment advice to clients as to the value of securities
IV only Clerical and ministerial personnel, full-time or temporary, are not included in the definition of either investment adviser representatives (supervised persons) or investment advisers. Other persons associated with an investment adviser, including officers of the firm, are generally considered to be investment adviser representatives. An investment adviser representative is not an investment adviser in the same manner that an agent is not a broker-dealer. A federal covered adviser is not, for definitional purposes, considered an adviser under the USA to avoid duplicate regulation by both the state and the federal government.
An individual with a place of business in State A manages client assets on behalf of a covered investment adviser. This individual wishes to expand his client base by working one day per week out of the firm's office in State B. Which of the following actions must the person take to practice within that particular state?
Pay state registration fees if required by the Administrator Individuals with a place of business in a state, managing client assets while employed by federal covered investment advisers, must register as investment adviser representatives in that state (or any others in which they, the IAR, maintain a place of business). Registration WILL generally involve paying the registration fees. Because this individual is already registered in State A, it is not necessary to pass another exam to become registered in another state. It is the investment adviser who may be required to notice file with the Administrator.
A sales agent who is only registered in Nebraska works for a broker-dealer that is registered in all 50 states. A customer who is a resident of North Dakota calls the representative in Nebraska and offers to purchase securities. Under the Uniform Securities Act, the agent should
reject the order because she is not registered in North Dakota Both the broker-dealer and the agent must be registered in each state where they plan to do business. Although the broker-dealer is properly registered, in order for the agent to accept the order, she must be registered in North Dakota. Even though the order is unsolicited, making this an exempt transaction, agents must still be licensed in the state where the client is a resident.
An individual who has applied for registration as an agent of a broker-dealer has just passed the Series 63 exam. This individual may begin soliciting brokerage clients
when informed by the broker-dealer that the agent's registration is effective NOT when informed by the Administrator that the representative's registration is effective Passing the Series 63 exam is the typical way an individual can meet the testing requirements to be an agent. Registration is not effective immediately upon passing. Notice is received by the broker-dealer from the appropriate state and/or federal authorities and then, in accordance with that firm's procedures, the firm determines when activity as an agent may start. The Administrator does not directly contact the individual. OFC the Admin doesnt contact the agent DIRECTLY
