Registration & Licensing Ch. 1

30 days

. An agent's registration becomes effective after _____ days have passed since meeting all registration filing and qualification requirements.

promtly

Notice to the Administrator must be given to the Administrator ________of any changes to the registration information given by the applicant.

A

A Canadian broker-dealer has a client who comes to the United States for 4 months as a contract employee for an American company. Which statement is TRUE about the Canadian broker-dealer doing securities business with the client in the United States? AThe Canadian broker-dealer can continue to do business with the client in the United States without taking any further action BThe Canadian broker-dealer can rely on the "vacationing" client exemption and does not have to register in the State CThe Canadian broker-dealer must register in the State DThe Canadian broker-dealer need only register in the State if the client is not a dual citizen

30 DAYS

A Federal Covered Adviser discovers a material error in its Form ADV. When must Form ADV be amended with the State to correct the error?

A

A broker-dealer that is registered in New York and that is not registered in any other State may effect transactions in securities: A any existing customer that is a New York resident that is vacationing anywhere in the United States Incorrect answer B. You did not choose this answer. Bwith any new customer that is a New York resident that is vacationing anywhere in the United States Cwith any New York resident located in any part of the United States Donly in New York and not in any other State

5

Advisers must retain records for _____years under NASAA rules

is

Any person retained by an investment adviser to "find" new clients, if he or she is paid for doing so, _____ defined as an IAR

has a few clients in the State with a de minimis exemption

All of the following are EXCLUDED from the definition of a broker-dealer under the Uniform Securities Act EXCEPT a firm with no place of business in the State that:

deals exclusively with issuers of securities deals exclusively with other broker-dealers deals exclusively with insurance companies

All of the following are EXCLUDED from the definition of a broker-dealer under the Uniform Securities Act:

Dsale of federal covered common stock to the public

All of the following are EXCLUDED from the definition of an agent EXCEPT an individual who represents the issuer in the: A sale of municipal securities to the public B private placement of common stock C sale of common stock to the issuer's employees D sale of federal covered common stock to the public

B

An Investment Adviser falls below the minimum net capital required by the State on Monday. The IA must file a report with the Administrator no later than: ATuesday of that week BWednesday of that week CThursday of that week D10 business days after the event

C

An Investment Adviser has just submitted a U-4 registration application for a newly hired salesperson to be registered as an Investment Adviser Representative of the firm. This individual can start soliciting potential clients: Aimmediately because the U-4 application has been filed with the State Bonce the appropriate licensing test has been passed Conce the State Administrator approves the application Donce the appropriate licensing fee has been paid

statutory broker-dealer

An agent of a broker-dealer effects a securities trade for a customer privately, where the transaction is neither known to the broker-dealernor is it recorded on the books of the broker-dealer. This individual is defined as a:

retains jurisdiction over the resigned agent for a period of 1 year

An agent of a broker-dealer wishes to withdraw his registration. If there is a customer complaint, the Administrator:

C must register as an Agent in the State *COMPENSATION

An employee of a company is being paid to assist in the sale of stock options to the company's employees and will receive a bonus based on sales results. This company employee: Amust register in the State as an Investment Adviser Bmust register in the State as an Investment Adviser Representative Cmust register as an Agent in the State Dis not required to register in the State

Agent

An employee of an issuer who is compensated for selling that company's securities to its employees is defined as an

does not; must

An individual who represents an issuer in an EXEMPT transaction (one that does not involve the general public) _______ have to register; but an individual who represents a broker-dealer selling either EXEMPT or NON-EXEMPT securities _______register.

does not; must

An individual who represents an issuer in the sale of EXEMPT securities ______ have to register as an agent; but an individual who represents an issuer in the sale of a NON-EXEMPT security______ register.

U-4;30 days

Annual renewal of registration as an agent or an investment adviser in each State is made by filing: Form U-_____ within _____ days of the date that renewal statements are sent out

30 days

As a general rule, spending more than ____ days in a location is no longer considered to be a vacation

SEC; BD

Broker-dealers must initially register federally with the ______. They use Form______for this, which is a broker-dealer registration form.

30 days

Registration is not valid until _______ elapse from registration date (regardless of the date of passing the Series 63 or 66 exam).

partners, officers, and directors of the adviser

Registration of an investment adviser in a State automatically registers any investment adviser representative that is a:

"broker-dealer"

Engages in the business of effecting securities transactions for the account of others Engages in the business of trading for his own account (known as "proprietary trading")

investigation and bringing of enforcement actions with respect to unlawful broker-dealer conduct

Federal securities laws supersede the provisions of the Uniform Securities in all of the following areas EXCEPT:

Oil and Gas Programs, or Mining Titles or Leases

For _______ there is not considered to be any "issuer."

o register as a broker-dealer or investment adviser

For a ______ & ________the Administrator can require that the firm have a minimum net worth or minimum net capital amount; and can require the posting of a surety bond.

charge separately for the advice.

For a lawyer or accountant to be excluded from the definition of an investment adviser, he or she must only give incidental advice about investing in securities and cannot ?

the person performing the functions of depositor under the Trust agreement is the issuer

For collateral trust certificates, who is the issuer considered to be?

the corporation itself is the issuer

For corporate securities, who is considered to be the issuer?

the corporation is the issuer

For equipment trust certificates, who is the issuer?

D

For initial registration as an agent in a State, all of the following are required EXCEPT: AConsent to Service of Process BFiling Fee CRegistration Application DGovernment Issued Photo I.D.

individuals- agents

Give an example of a natural person?

savings and loans; trust companies; insurance companies; investment companies; pension and profit sharing plans; other financial institutions; and anyone so designated by the State Administrator by rule or order.

Give example of Institutional buyers

Trust Administrator Minor

Give example of those Excluded from the definition of a "person"?

there is no additional fee required at that time.

If a broker-dealer "buys out" another broker-dealer, or an investment adviser "buys out" another investment advisory firm, what is the fee?

surety bond requirement.

If a broker-dealer or investment adviser maintains a high enough net capital amount, the Administrator may waive the _________

investment adviser

If a representative of an investment adviser terminates employment, the ______ must notify the Administrator promptly.

Investment Adviser Representative

If a representative that transacts business in a State terminates employment with a Federal covered adviser, notice must be given to the Administrator by the:

notice must be given to the Administrator by the representative only

If a representative that transacts business in a State terminates employment with a federal covered adviser: Notice must be given by who?

SEC; state

If an adviser is defined as a "federal covered adviser" - then the adviser must register with the_____ but is not required to register______

state; SEC

If an adviser is not a "federal covered adviser" - then it must register in the ____, but is not required to register with the ______.

promtly

If an agent changes his place of employment from one broker-dealer to another, the registration must be transferred:

expires

If an agent fails to renew his or her license at the end of the year, the registration:

registration expires with no action by the Administrator

If an agent fails to renew his or her license at the end of the year, the:

are not

Individuals who represent issuers in trading exempt securities or in exempt transactions _______ defined as agents.

all of them

Investment advisers may be formed as: I Partnerships II Corporations III Associations

Investment Advisers Act of 1940

NASAA does not set rules for federal covered advisers - only the _______applies!

Agents: These are individuals who represent the broker-dealer when performing securities transactions, basically sales representatives Banks, Savings Institutions, and Trust Companies: These firms are separately regulated under State and Federal banking laws. Issuers: (except when an issuer effects transactions other than with respect to its own securities

Persons NOT considered to be "broker-dealers" include:

investment adviser representatives; professionals such as lawyers and accountants who give incidental advice without taking a fee; broker-dealers since they also give incidental advice without taking a fee for the advice (instead they earn a commission on the trade); financial publications that are not tailored to specific client situations; and depository institutions such as banks, and savings and loans (they are already highly regulated under other laws).

Persons that are NOT DEFINED as "investment advisers" include:

Dec 30th

Registration expires at the end of each year on ______

Cdetermines that the agent does not have the required experience to act as an agent in that State

The Administrator would revoke the license of an agent for all of the following reasons EXCEPT the Administrator: Ahas attempted to locate the agent at his or her last known address and has determined that the agent is no longer at that location Bthat the agent has willfully violated a provision of the Uniform Securities Act Cdetermines that the agent does not have the required experience to act as an agent in that State Dfinds that the agent has unknowingly violated a provision of the Uniform Securities Act

no commission is being paid

The Uniform Securities Act only excludes individuals who represent issuers in sales of securities to employees of that issuer (say when an employee makes a purchase of the issuer's stock in the issuer's 401(k) plan) as long as what?

the office that they're headquartered

The Uniform Securities Act provides that State-registered advisers with offices in many States only have to comply with the recordkeeping rules for where?

false - the Administrator can inspect records at will

Under the Uniform Securities Act regarding recordkeeping requirements True or false that an annual inspection must be scheduled with the Administrator

federal covered adviser

Under the Uniform Securities Act, a person who renders investment advice solely about U.S. Government Agency securities is defined as a(n):

ALL OF THEM

Which of the following investment advisers with no place of business in the State is exempt from registration? Investment Advisers whose only clients are: I other investment advisers II broker-dealers III investment companies IV insurance companies

Insurance company

Which of the following is NOT EXCLUDED from the definition of an "investment adviser"? Incorrect answer A. You chose this answer. Broker-dealer Trust company Insurance company Savings and loan

II,III

Which of the following items would be included in the computation of an investment adviser's net capital? I Business reputation II Furniture and fixtures III Automobiles IV Organizational expenses which ones

noon 30th day; earlier effective date;

The wording in the Uniform Securities Act is that: "If no denial order is in effect and no proceeding is pending, registration becomes effective at _______day after an application is filed." It then goes on to say that: "The Administrator may by rule or order specify an ________date and may by order defer the effective date until noon of the thirtieth day after the filing of any amendment."

registration of agents of broker-dealers or investment adviser representatives.

There is no net capital requirement for who?

I person

Under NASAA recordkeeping rules for investment advisers, a communication to a client must be retained if it is circulated to MORE than:

10 business days following the end of each calendar quarter.

Under NASAA rules for State-registered advisers, transactions must be recorded in customer account records no later than:

90 days annually

Under NASAA rules, the Form ADV filed with the State must be updated:

no

Under State law, if an investment adviser will not take custody of a client's funds, then is the adviser required to take a surety bond ?

if both broker-dealers are under common control

Under Uniform State Law, as adopted in most states, an agent may be affiliated with more than one broker-dealer at the same time:

anytime

Under the Uniform Securities Act if it is in the public interest, the Administrator may inspect a broker-dealer's books and records:

same

Under the Uniform Securities Act regarding recordkeeping requirements the ______ records are not required to be kept for both broker-dealersandinvestment advisers

10; 5

The statute of limitations for conviction of securities-related offenses that occurred in the U.S. is _____years The statute of limitations for conviction of securities-related offenses that occurred in a foreign jurisdiction is _____ years

B

To act as an adviser in a State, federal covered advisers must do all of the following EXCEPT: Aregister with the Securities and Exchange Commission Bregister with the State Cfile notice with the State Dpay a filing fee to the State

$10,000

To be registered as a broker-dealer, the Administrator typically requires the posting of a surety bond in the amount of:

non-rewritable

To ensure the integrity of electronically stored data, the record must be:

net capital (minimum liquid net worth).

To register as a broker-dealer or investment adviser, the State Administrator can require minimum what?

D have more than 5 clients in the state in the preceding 12 months

Under the Uniform Securities Act, all of the following persons with no place of business in the State are EXEMPT from registration as an investment adviser EXCEPT advisers that: Adeal solely with insurance companies Bdeal solely with investment companies Cdeal solely with broker-dealers Dmore than 5 clients in the state in the preceding 12 months

after 30 days

Under the Uniform Securities Act, if an agent withdraws his or her registration, the withdrawal becomes effective:

D

Under the Uniform Securities Act, posting of cash in lieu of meeting the surety bond requirement is permitted for all of the following EXCEPT: AAgent registration BBroker-dealer registration CInvestment adviser registration DSecurity registration

ALL OF THEM

Under the Uniform Securities Act, which of the following are EXCLUDED from the definition of an investment adviser? I Teacher II Engineer III Lawyer IV Accountant

II,III,IV

Under the Uniform Securities Act, which of the following persons must register as a broker-dealer in a state? I A firm with no place of business in the state that has no clients in the state II A firm with no place of business in the state that has 25 clients in the state over the preceding 12 months III A firm with a place of business in the state that deals exclusively with issuers IV A firm with a place of business in the state that deals exclusively with financial institutions which ones

Agent and Broker-dealer

Under the Uniform Securities Act, who must notify the State Administrator when an agent disassociates from his or her broker-dealer?

all of them

Under the provisions of the Uniform Securities Act, a "person" includes: I A parent that is acting as custodian II An adult coupleI II Municipality IV Corporation

Surety bond

Under the provisions of the Uniform Securities Act, if an investment adviser wishes to take custody of client funds, the RIA must:

Broker-dealers Agents Investment advisers Investment adviser representatives

Uniform State Law requires that the following register in the State if they are operating in the State, unless an exemption is available:

B

When can a solicitor of a Federal Covered Adviser contact potential clients in a State without having to be registered in that State? AUnder no circumstances BIf the solicitor is not physically located in the State and the solicitor only contacts institutional clients in that State CIf the solicitor is not physically located in the State and the Federal Covered Adviser has made a notice filing in the State DAt any time because the Federal Covered Adviser has registered with the SEC

Is not; is

When deciding whether a firm is considered to be a "broker-dealer," the regulators look to see if compensation is being paid. If compensation is not being paid, then that firm ______ considered to be a BD If it is being paid, in any form, then it is "in the business" and _____ broker-dealer that must register.

Broker-dealers

Which entity couldn't be formed as a Investment advisors?

ALL OF THEM

Which of the following investment advisers are NOT required to register in a State? I An investment adviser that has no place of business in the State and which has no more than 5 clients in that State within a 12 month period II An investment adviser with at least $100,000,000 of assets under management registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940 III An investment adviser that has no place of business in the State that deals solely with Investment Companies as defined under the Investment Company Act of 1940 IV An investment adviser that has no place of business in the State that deals solely with other investment advisers

II,IV

Which of the following would be defined as an "agent" under the Uniform Securities Act? I A firm that only sells municipal securities of that State to residents of that State II A salesperson who only sells federal covered securities to residents of that State III A wholly owned subsidiary of a bank that is registered as a broker-dealer in the State IV A sales assistant who takes orders from clients when the agent is unavailable

B A person with no place of business in the State who represents an issuer in the sale of exempt securities to non-institutional customers for compensation

Which person would be required to register as a broker-dealer in a State? A. A person with no place of business in the State who conducts securities transactions with the issuer of non-exempt securities B.A person with no place of business in the State who represents an issuer in the sale of exempt securities to non-institutional customers for compensation C.A person with no place of business in the State who represents an issuer in the sale of non-exempt securities to the issuer's employees without receiving compensation D.A person with no place of business in a State who conducts securities transactions with financial institutions in the State for compensation

I,IV

Which records MUST be retained in a state-registered investment adviser's principal office? I Customer securities positions II Correspondence with customers III Investment adviser's bank statements IV Records of customer purchase and sales orders which two

A

Which statement is TRUE regarding the State Administrator's authority to establish net capital standards for broker-dealers? AThe Administrator can only establish Net Capital standards that are the same as those set by the SEC BThe Administrator cannot establish Net Capital standards for broker-dealers CThe Administrator has the power to set Net Capital standards if it is in the public interest DThe Administrator can neither establish nor enforce Net Capital requirements for broker-dealers Explanation

I,II,III

Which statements are TRUE about registration of investment advisers? I An adviser with no place of business in the State that limits its clientele to insurance and investment companies is exempt from registration II Broker-dealers can act as investment advisers without registering as such if any advice given is solely incidental to the business of the broker-dealer III Investment Advisers must register with the State

II,III

Which statements are TRUE about the applicability of NASAA recordkeeping rules to investment advisers? I NASAA recordkeeping rules apply to Federal Covered advisers II NASAA recordkeeping rules do not apply to Federal Covered advisers III NASAA recordkeeping rules apply to State-registered advisers IV NASAA recordkeeping rules do not apply to State-registered advisers pick two

II,IV

Which statements are TRUE regarding registration of agents? I Agents can be registered in a state without affiliating with a broker-dealer II Agents can only be registered in a state if they are affiliated with a broker-dealer III Agents must only be registered in the state where they have an office IV Agents must be registered in any state into which they direct offers of securities

ALL OF THEM

Which statements are TRUE? I Investment advisers with a place of business in the State that are not registered with the SEC must register in the State II Investment advisers with a place of business in the State that are registered with the SEC must file notice in the State III Investment adviser representatives with a place of business in the State that are affiliated with advisers that are not registered with the SEC must register in the State IV Investment adviser representatives with a place of business in the State that are affiliated with advisers registered with the SEC must register in the State

Yes, because the student is not considered to be a resident of the state where he or she is attending college

You are an agent registered in a State where you have a customer. The customer will be going to college in another State. May the agent still do business with the customer, even though the agent is not registered in the State where the student is going to college?

agents of broker-dealers

a surety bond can be required for who?

federal covered adviser

an investment adviser that manages $100,000,000 or more of assets; or an investment adviser to registered investment companies.

investment adviser representative

any partner, officer, or individual employed by the advisory firm that: makes recommendations renders advice performs research manages accounts solicits the sale of advisory services supervises employees who perform any of these functions

II,III

nder NASAA rules, the Form ADV filed with the State must be: I updated quarterly II updated annually III sent to customers if the update is material IV sent to other investment advisers if the update is material which ones

less

every adviser required to be registered in the State shall, by the close of business the next business day, notify the Administrator if such investment adviser's net worth is ______ than the minimum required."

"consent to service of process"

in an initial registration application appoints the State Administrator as attorney for the registrant, authorizing the Administrator to receive any lawsuits on behalf of the registrant.

ccept a deposit of cash in the appropriate amount, or a deposit of securities in the appropriate amount.

in lieu of posting a surety bond, the Administrator must

An Agent

is an individual who represents a broker-dealer selling any type of security - whether it is exempt or non-exempt.

The "issuer"

is any person who issues or proposes to issue a security.

Uniform Securities Act

is to prevent fraud in the sale of securities to the public and to stop illegal and deceptive sales practices.

post-registration requirement

requirements cover such things as maintaining books and records; making required filings with the Administrator; giving reports to customers; and filing advertising and sales literature with the State.

investment adviser

s defined as a person who, for compensation, engages in the business of advising others, directly or indirectly, as to the value of securities or the advisability of investing in, buying, or selling, securities

Issuer Transaction

the sale of the securities is for the benefit of the issuer - the issuer receives the proceeds from the sale.

"Persons," as defined under the Uniform Securities Act,

to be either human or non-human may issue securities or can trade securities