Missed Questions-63

According to the Uniform Securities Act, there are record retention requirement for investment advisers. Generally how long must records be kept in the principal office of the IA?

2 years

The Administrator of State A would like to initiate a criminal action against XYZ Investments for fraudulently selling limited partnership interests to several dozen investors. How long does the Administrator have to initiate action?

5 years

When must a state registered IA firm file an updated Form ADV with the state?

90 days after the firm's fiscal year end

Which of the following is not an issuer under the Uniform Securities Act?

A broker-dealer acting as a standby underwriter in a rights offering

Which of the following is not considered an agent, according to the Act?

A person who solicits for an issuer of commercial paper who has the highest ranking of a national rating organization

All of the following are not considered broker-dealers under the Uniform Securities Act, except:

A person, not an agent, who acts as a market maker in several NASDAQ securities

Which of the following would be required to register as an agent in State B?

A registered broker-dealer agent in State D and transacts business for Alfonso who lives in State D, but is in State B temporarily for 40 days

Which of the following is the correct definition of a non-exempt security?

A security that must be registered under the Uniform Securities Act with the State Administrator

A customer of a registered broker-dealer bought $50,000 of BCD, Inc. stock in her margin account, but she did not pay for the entire transaction by the settlement date. The broker-dealer lent her the balance of the purchase price. How can this practice be best described?

Acceptable

An individual is employed by a financial institution and also by a broker-dealer who offers securities products on the premises of the financial institution. If the individual executes a transaction for investment company shares for the account of a customer, they are:

Acting as an agent of the broker-dealer, not the financial institution

XYZ is a firm that has been registered with the SEC for 5 years. XYZ intends to offer securities in the state using registration by Filing/Notification. When does the registration becomes effective?

After a specified number of days

A low-level officer of a broker-dealer violates a securities law that subjects the firm to having its registration revoked. If revoked, what will happen to all of the agent's registrations?

Agents registrations are automatically revoked

Which of the following is least likely considered to be an unethical business practice under the Uniform Securities Act?

An RR divides some of the assets in a discretionary account between five different funds in a single fund family, but fails to mention this to his customer

Which of the following is not considered a broker-dealer?

An agent with a place of business in the state who sells only municipal securities

Which one of the following is excluded from the definition of an agent under the USA?

An individual who works for an issuer and sells securities only to institutions

As defined by the Uniform Securities Act, which of the following is an exempt security?

An unsecured $75,000 large corporation promissory note with a top rating that matures in 120 days

Which one of the following is a post-registration requirement for broker-dealer agents under the Uniform Securities Act?

Annual renewal of the agent's license with the State Securities Administrator

Under the Uniform Securities Act, when must a prospectus be delivered to a customer who is interested in purchasing 1,000 shares of an open-end fund?

At or prior to the due date of the confirmation

All securities sold by an agent must be:

Authorized and approved by the agent's employing broker-dealer

A registered representative has just executed a discretionary order for their best client's account. When must the representative obtain written authorization for this activity?

Before the execution of the order

An agent residing in State J would like to do business in neighboring State K. What must occur for this to be permitted?

Both the agent and broker-dealer must be registered in State K

All of the following are defined as securities EXCEPT:

Commodity futures contracts

According to the Uniform Securities Act, the advisory brochure of a registered investment adviser must include all of the following, except:

Detailed information about investment returns expected

Which of the following best describe the investment adviser record retention requirements for the minutes of the firm's board of directors' meetings?

For 3 years after the firm is terminated

XYZ Industries has filed a registration statement with State A to offer $6,000,000 of equity securities. According to the Uniform Securities Act, this registration remains in effect:

For one year after the effective date

An investment adviser is opening a wrap account with a new customer and will require the customer to prepay the first year's fee. Which of the following is the IA not required to deliver to the customer?

Form ADV Part 1

Which of the following is not a true characteristic of registration by coordination?

Frequently used when only registering in one state

A registered broker-dealer is also considering registering as and investment adviser. Prior to its registration as an IA, which of the following would be acceptable forms of compensation? I Payment of commissions to the firm by an issuer II Payment of commissions to the firm by a customer​ III Payment of a wrap fee to the firm by an institutional customer IV Payment of investment advisory fees to the firm by a retail customer

I and II

According to the Uniform Securities Act (USA), an individual who represents which of the following is NOT considered an agent? I Issuer in effecting transactions in private placements II Issuer in effecting transactions in municipal bonds III Broker-dealer in effecting transactions in Treasury bonds

I and II

According to the Uniform Securities Act (USA), an individual who represents which of the following is NOT considered an agent? I Issuer in effecting transactions in private placements II Issuer in effecting transactions in municipal bonds III Broker-dealer in effecting transactions in Treasury bonds A

I and II

An attorney is handling the legal work for the takeover of ABC Inc. by XYZ Corporation and tells their spouse, who is a stockbroker, about the takeover. The next day, knowing that the stock will rise because of the takeover, the spouse encourages all of their customers to buy ABC Inc. stock and purchases 500 shares for their own account. This scenario is unlawful because of which of the following? I The spouse is acting on "inside" information II The spouse is making recommendations regardless of client suitability III The spouse is misleading their customers IV The spouse has not disclosed his own purchase to these customers

I and II

Which of the following are true characteristics of accounts with which there is an agreement for a client and agent to share in profits? I Depositing client funds into an agent's personal checking account is prohibited II Only under this circumstance is it permissible for the client and agent funds to be commingled​ III All sharing must be in direct proportion to the contributions made by each party

I and II

An investment adviser has recently hired a new employee. Which of the following activities would result in the employee being considered an IAR? I Soliciting new clients II Entering trades into an online order system III Conducting qualitative research to determine the firm's investment recommendations IV Supervising the IA's IT staff

I and III

According to the Uniform Securities Act and NASAA's Model Rule on Investment Adviser Recordkeeping Requirements, which of the following are true regarding an investment adviser's books and records? I Regulators can spot check an IA's books and records​ II Regulators must give IAs 2 business days' notice before conducting a books and records inspection III Records must be kept in an easily accessible location for 2 years IV Records must be kept in an readily accessible location for 5 years

I and IV

Simka has been hired by ABC Securities to develop and service a book of retail clients. Simka lives in State A and is about to file an application with the Administrator to secure an agent's registration. According to the Uniform Securities Act, which of the following must be disclosed on the application? I Any felony convictions II Only felony convictions involving securities III Any misdemeanor convictions IV Any misdemeanor convictions involving securities

I and IV

According to the Uniform Securities Act (USA), an individual that represents which of the following is considered an agent? I A broker-dealer in effecting transactions in municipal bonds II A broker-dealer in effecting transactions in Treasury bonds III A broker-dealer in effecting transactions in private placements IV A broker-dealer in effecting transactions for an existing client who moved to a new state 40 days ago

I, II and III

According to the Uniform Securities Act which of the following must be disclosed in writing and contained in the investment advisory contract? I The investment adviser will not share in customer profits II No assignment of the contract may be made by the investment adviser without the consent of the other party to the contract III The investment adviser, if a partnership, must notify the other party to the contract of any change in the membership of the partnership within a reasonable time after the change IV The investment adviser shall notify the other party of its current standing as either a federal covered adviser or as a state-registered adviser

I, II and III

An agent in State A calls a client that is on their way to a national park in State B. The client receives the call on their cell phone while at a rest stop in State C. The agent presents and investment opportunity to this client while speaking at the rest stop. Two days later while in State B, the client accepts the offer. Which of the following Administrators have jurisdiction over these events? I State A II State B III State C

I, II and III

Which of the following would be included in the definition of agent under the Uniform Securities Act? I A salesperson of a broker-dealer selling stock to the public II A salesperson of a broker-dealer selling stock to an institutional investor III A salesperson of a broker-dealer selling municipal bonds to the public IV A salesperson of a broker-dealer selling a private placement to an institutional investor

I, II, III and IV

Anti-fraud provisions for investment advisory activities apply to which of the following? I Advice related to the purchase or sale of securities II Advice on the value of securities III Solicitation of advisory clients IV Any person who gives advice on securities

I, II, and III

Under the USA, all of the following are agents, except: I An individual who represents a broker-dealer in the sale of nonexempt securities II An individual who represents an issuer in the sale of exempt securities III An individual who represents an issuer in the sale of nonexempt securities in exempt transactions IV An individual who represents an issuer in sales of the issuer's common stock to employees of the issuer for commissions

II and III

Under the Uniform Securities Act, a broker-dealer need not register with a state if: I They have a place of business in the state, but deal only with institutional investors II They have no place of business in the state III They do not effect securities transactions with noninstitutional customers who reside in the state

II and III

Under the Uniform Securities Act, which of the following may an Administrator require of registered broker-dealers? I Keeping of records in excess of that required by the SEC II Submitting to state examination of records III Filing of amendments to documents that were previously filed with the administrator IV Filing of sales and advertising literature on any security subject to anti-fraud provisions

II and III

A FINRA member broker-dealer offers, as a courtesy to its clients, personally tailored investment advice. For this service, the firm does not charge a fee but believes that it adds value to the firm in terms of retaining key customers, as well as justifying higher commissions on transactions than competing firms. According to the Uniform Securities Act, which two of the following statements are true regarding this firm? I The firm is an investment adviser and must register as such II The firm is not an investment adviser III The firm is a federal covered adviser IV The firm is not a federal covered adviser

II and IV

According to the Uniform Securities Act (USA), which of the following individuals is considered an agent? I An individual that represents an issuer in effecting transactions in municipal bonds II An individual that represents a broker-dealer in effecting transactions for resident customers III An individual that represents an issuer in effecting transactions in Treasury bonds IV An individual that represents a broker-dealer in effecting transactions in private placements

II and IV

Which of the following communications may be required to be filed with the Administrator in a given state? I Individual letters II A general prospecting form letter III Ads for GNMAs IV Ads for CMOs

II and IV

An agent has a client that is have trouble making an investment decision. As an attempt to motivate his client, the agent tells them "Either I'm crazy or I know something, and I know I'm not crazy. Now, let's make some money." In reality, the agent does not have any material, non-public information about the company. How can this situation be best described? I Insider trading II Manipulative, but not insider trading III Unethical IV Fraudulent

II, III and IV

Under what circumstances may an investment adviser share in the profits of an account subject to an investment advisory contract?

If the contract specifies that the compensation is based upon the total value of the account averaged over a specified period of time, or as of a definite date

Which of the following statements is true regarding the effective date of a securities registration when done by filing?

In most states it will be effective 5 days after filing

Which of the following statements regarding investment advisers is false?

Investment advisers must obtain written customer consent before exercising discretion in an account

An investor enters a trade and informs their agent that they have non-public, material information. Which action should the agent take?

Keep the information to themselves

Under the Uniform Securities Act, which of the following would not be considered fraudulent?

Making any untrue statement of fact to a retail investor

A federal covered adviser could enter into an advisory contract which allowed for performance-based compensation with a customer who met which of the following financial criteria?

Net worth of $2.1 million

A broker-dealer has just changed its branch office location in State A. When does the firm need to file an amendment with the Administrator in State B?

Never

An investor of an advisory firm holds a large position of a thinly traded stock. This investor informs the adviser that they would like to sell 100,000 shares of this stock. The advisory firm contacts one of their institutional clients and recommends the purchase of these shares of stock. The institutional client agrees and the transaction is completed with the institutional client purchasing the 100,000 shares. All of the following are true except:

No commission may be charged to to the selling investor for this transaction

Under the Uniform Securities Act, registrations of broker-dealers, agents, investment advisers, and investment adviser representatives become effective on which of the following?

On the 30th day after filing

Which of the following regulations reminds investment advisers about their fiduciary obligation to clients?

SEC Release IA-1092

An agent registered with the state is also known as:

Securities sales person

The Administrator has knowledge that a broker-dealer is in violation of the Uniform Securities Act. The administrator can take all of the following actions, EXCEPT:

Seek an indictment for fraud

An IAR for a federal covered advisor has offices is state A where the IAR works. Who would the IAR need to register with?

State A

When transactions or securities involved are exempt from state registration requirements, the agent representing a broker-dealer in such transactions:

Still must be registered

A newly formed investment adviser with $10 million of assets under management would like to begin providing IA services to registered investment companies. What would need to be filed with the State Administrator in order to do so?

The IA must register with the SEC, file notice with the administrator, and pay a state filing fee

A registered representative has a client with a non-discretionary account. The client has placed an order to buy 1,000 shares of PFE whenever the RR thinks the market for PFE has reached a bottom during the day's trading. Which of the following is true regarding this situation?

The RR can execute this order without additional documentation

An advertisement for a securities offering is published in a newspaper. Which of the following is true?

The advertisement is an offer in the state where the newspaper is published if at least 2/3 of the newspaper's circulation is within the state

Who is responsible for determining what information is material and should be given to the client in order to make an informed investment decision?

The agent

An established customer of a Canadian broker-dealer relocates to Arizona. The customer subsequently opens a margin account in order to use leveraging in the securities markets. Which of the following is true?

The broker-dealer must register in Arizona

A principal in a registered broker-dealer notices that there are excessive trades in a client's account and investigates the circumstances. In which of the following cases would these excessive trades be permissible?

The client initiated all the trades with no encouragement from the firm or its representatives

A customer determines that the agent who sold them 500 shares of DEF common stock two years ago was not registered in the customer's state at the time of the sale. Which of the following is true under these circumstances?

The customer may file a civil suit for up to three years from the date of the sale

Under which of the following conditions is a Canadian broker-dealer required to register in a state?

The firm has a fewer than five retail clients who reside in the state within the last 12 months

Martha, the founder of SuperNova Advisors, has decided to retire as of the end of the year. Her son, Luke, will be taking Martha's place on SuperNova's investment advisory committee and will be elevated to the status of partner. What action is necessary for Supernova to initiate this change?

The firm must notify each client of the change within a reasonable time period

A small, one-office investment advisory firm with $5 million in assets under management, is located in State A. Which of the following persons associated with this firm would NOT fall under the definition of an IA representative according to the Uniform Securities Act?

The founder's son who tabulates investment results for client accounts

Who benefits from a consent to service of process?

The investor

An investment adviser is generally prohibited from paying cash referral fees to a non-employee, unless certain conditions are met. All the following are conditions required for an investment adviser to pay a referral fee to a solicitor EXCEPT:

The solicitor is required to establish and register as an investment adviser, independent of the investment adviser to whom the solicitor refers prospective clients

Which of the following statements concerning unregistered, non-exempt securities is correct?

These securities may be sold to institutions and retail investors, provided the trade is done on an unsolicited basis

A customer at XYZ brokerage recently placed an order to buy stock. The customer directed their agent to buy a large amount of LSMF stock when the price looks good. Under which circumstance can this transaction be completed?

This can be done only if the agent was given written discretionary authority

An individual manages a dividend reinvestment program for DEF Technologies and executes purchase orders for company shares in order to fulfill shareholder requests. Which of the following is accurate?

This individual is an issuer agent

A customer asks their registered representative for a recommendation on how to invest the funds in their IRA. The RR recommends the purchase of a variable annuity and explains that the tax-advantaged features of the annuity provide double-barreled protection against taxation. Which of the following best describes the RR's statements?

This is unsuitable and unethical; agents cannot use the tax-deferred status of annuities as a selling point to encourage their purchase in retirement accounts

If an Administrator wishes to deny the registration of a new securities offering, he/she must identify at least:

Two reasons

A registered representative encourages a new customer to begin a program of dollar cost averaging with monthly investments. The agent explains that, since in non-static markets, the average cost of the investment will always be lower than the average price, over the customer's anticipated 15 year holding period, the customer cannot lose money. How would you describe these statements?

Unethical

An agent who guarantees a security does which of the following?

Violates the anti-fraud provisions of the USA

An IAR with BB Advisers, has provided one of his clients with a research report on EFG Corporation. This distribution is prohibited by the Uniform Securities Act if it:

Was prepared by a third party and the IAR fails to disclose that fact

A corporation has filed an application to register a new stock offering in Arizona using the qualification method. Under the Uniform Securities Act, when will the registration become effective?

When determined by the Administrator

An IA partnership has just hired two new partners. When do the firm's clients need to be notified?

Within a reasonable time

None of the following are broker-dealers in State A, except:

XYZ Brokerage, which transacts business with retail customers who reside in State A