Unit 1 Checkpoint Exam
Who maintain financial records?
-B/D -IA
SEC Rule 501 Accredited investors
-any bank or insurance company -charitable organization exceeding $5mil -directors, executive officer, general partners issuer -employee benefit plan worth more then $5mil -$200 past two years -$1mil net worth minus primary residence
During the application process for registration as an agent, the Administrator may request information about the applicant's
-citizenship -proposed method of doing business
During the application process for registration as an B/D or IA, the Administrator may request information about the applicant's
-financial condition
According to the Securities Exchange Act of 1934, a report of beneficial ownership must be filed with the SEC by interested persons when their ownership of a security registered on a national exchange exceeds what level
5%
Who is not inspected by the admin?
Agents and IAR
Who maintain sales records?
Agents, there are no financial inspections of these
SEC criminal penalties
no more then $10k, imprisonment for no more then 5 years or both
USA Criminal Penalties
no more then $5k or prison sentence to exceed three years, or both
Section 15 of The Investment Company Act of 1940 spells out many of the specific requirements for the contract between a management investment company and its investment manager. Among those requirements is that
Contracts between funds and their advisers may not be terminated with more than 60 days notice and these contracts must be in writing
What two individuals never have to meet net worth/net capital requirements?
IAR and Agents
Under NASAA's Model Rule on Unethical Business Practices oral authority given
Investment Advisers, Investment Adviser Representatives, and Federal Covered Advisers, oral discretionary authority is permitted to be used for the initial transactions in a customer's account for the first 10 business days after the date of the first transaction
De minimis exception
allows covered employees to make contributions up to $350 per official or candidate per selection they can vote -$150 for other elections
When suspending trading on an exchange the SEC
must notify the President of the US
If a B/D or IA needs to meet net worth levels they can
post a bond
The procedures to be followed by an investment adviser whose power was lost due to an earthquake would be found in
the firm's business continuity plan
