Series 63 finals corrections

for an investment adviser to take custody of funds, what 5 things are required?

1. notify the admin 2. custody must be kept by a qualified custodian 3. prompt notice to customer of custodian name and address 4. account statements are sent quarterly 5. IA must be audited annually

If a registered investment adviser that takes custody of client funds or securities wishes to send account statements directly to clients, the investment adviser MUST: A. send account statements monthly B. be audited annually on a surprise basis C. receive approval from the Administrator D. be a federal covered adviser with at least $100 million of assets under management

B.

An investment adviser in State A has an investment adviser representative who gives advice to his client, a bank, in State B. When would the investment adviser representative (IAR) be required to be registered in State B? A. The investment adviser representative would never be required to register in State B because the investment adviser representative is already registered in State A B. The investment adviser representative would have to register in State B when the firm has 3 other clients in State B C. The investment adviser representative would have to register in State B when the investment adviser opens an office in State B D. The investment adviser representative would have to register in State B if he or she has 3 clients in State A and 3 clients in State B

C. because all exemptions are based on the fact that the adviser has no principal office in the state

A customer contacts her IAR (Investment Adviser Representative) and tells her to: "Sell my 1,000 share XYZZ stock position if the price falls to $35 per share." After receiving this customer's order, the IAR stumbles across an XYZZ company press release that has not yet been distributed stating that the company has lost an extremely large government contract. The press release occurs 3 days later, at which point the stock's price dives and becomes worthless. The IAR was able to sell the customer's stock at $35 when the price was falling. Which statement is TRUE about this? A. This is an insider trading violation because the trade was based on non-public information B. This is not an insider trading violation because the customer was attempting to avoid a loss and was not trading to make a profit C. This is not an insider trading violation because the customer placed the order before the IAR knew of the non-public information D. This is not an insider trading violation because the IAR did not solicit the customer to place the sell order

C. it doesn't matter if an order is solicited or unsolicited, what matters is who knows what when and how they got that information

An individual that is registered as an IAR in a State is also registered as an agent of an affiliated broker-dealer in that State. This individual would be allowed to perform which services for a fee for a customer? A. The individual can provide advisory services but cannot earn commissions on recommended transactions B. The individual can earn commissions on recommended transactions but cannot provide advisory services C. The individual can provide both advisory services and earn commissions on recommended transactions since he is registered in both capacities D. The individual can provide both advisory services and earn commissions on recommended transactions as long as this fact is disclosed in writing to customers

D. A person, if dual registered, CAN provide both broker dealer and advisory services. However, this is a potential conflict of interest and MUST be disclosed to the customer in writing

Under the Uniform Securities Act, the registration of a broker-dealer may be revoked for all of the following reasons EXCEPT the firm does not: A. maintain required records B. file financial reports with the Administrator C. file advertising with the Administrator D. file customer complaints with the Administrator

D. a broker dealer must retain customer complaints , but not required to file them with the administrator

To register an issue by filing, the issuer must be: I in business for the past 3 years II profitable for 2 of the past 3 years III in business for the past 5 years IV profitable for 2 of the past 5 years

I and II. a business must be in existence for 3 years and profitable for 2 of the past 3 years. It wouldn't make sense to require a business to be incorporated for 3 years and be profitable for 5