Registration and Licensing (Definition of Terms)

A company offers a salary reduction defined contribution plan to its employees that adheres to ERISA Rule 404(c). It is administered by the firm's Human Resources (HR) department. The individual in HR who oversees enrollment of employees in the plan receives a bonus for any employees that purchase the company's stock in the plan. This employee is: A. defined as an agent who must register in the State B. defined as an issuer who must register in the State C. not defined as an agent and is not required to register in the State D. not defined as an issuer and is not required to register in the State

A

An agent of a broker-dealer has been spending his spare time, at night and on weekends, on the Internet. The agent has been trading a thinly traded stock listed in the Pink Sheets, and has accounted for more than 50% of the trading volume in the stock. The agent has also been sending out e-mails to potential investors, recommending the stock. The agent has not informed his broker-dealer of these activities, since they only occur when the broker-dealer is closed. Which statement is TRUE regarding the applicability of the Uniform Securities Act to these activities? A. The agent is defined as a statutory broker-dealer and must register in the State B. Activities effected through the Internet are exempt from the provisions of the Uniform Securities Act C. A violation of the Uniform Securities Act will occur only if there is a customer complaint lodged against the agent with the Administrator D. The State Administrator can issue a stop order against the agent's broker-dealer for these actions

A

An individual acts as a finder, facilitating mergers and acquisitions of companies that are both publicly and privately held. The individual searches for companies that appear to be compatible and that will either enjoy a revenue enhancement or cost reduction benefit from the transaction. The individual just introduces the parties to the proposed transaction, but has no involvement in the agreements or valuation. Upon the closing of the deal, the individual is paid a percentage of the transaction. Under NASAA rules, this individual A. needs to register as a broker-dealer in the State because he or she is receiving transaction based compensation B. needs to register as an investment adviser in the State because he or she is giving advice about investing in securities C. does not need to register as a broker-dealer in the State because the clients involved are institutional investors D. does not need to register as an investment adviser in the State because he or she has no involvement in the agreements or valuation

A

An institutional buyer is defined under the Uniform Securities Act as any person: A. so designated by the Administrator by rule or order B. with over $100 million of assets under management C. defined under Section 4(6) of the Securities Act of 1933 D. that solely effects transactions using the mails or other means of interstate commerce

A

The State Administrator has the power to do which of the following to a federal covered adviser? A. Increase the number of audits that the Administrator makes of the adviser B. Establish minimum financial requirements that are more stringent than the requirements of the Investment Advisers Act of 1940 C. Require the adviser to file financial reports other than those filed under the Investment Advisers Act of 1940 D. Require the adviser to keep records other than those required under the Investment Advisers Act of 1940

A

The purpose of the Uniform Securities Act is to protect investors from: A. investment fraud B. aggressive sales pitches C. financial loss D. moral turpitude

A

The term "issuer" applies to a: A. person who proposes to sell a security B. director of a company that is selling new shares to the public C. trader executing trades off an exchange floor D. market maker in a security traded over-the-counter

A

Under the Uniform Securities Act, a "natural person" includes a(n): A. agent B. investment adviser C. broker-dealer D. issuer

A

Under the Uniform Securities Act, which of the following would be required to register as an investment adviser representative? A person who: A. acts as a solicitor for the adviser B. performs ministerial functions for the adviser C. handles the books and records of the adviser D. registers investment adviser representatives

A

Which of the following individuals is defined as an "agent" under the Uniform Securities Act? A. An individual who represents an issuer in sales of non-exempt securities B. A person who effects securities trades for his own account as a regular course of business C. A person who has no place of business in the State who offers a security to an existing customer who is not a resident of that State D. An individual who represents a broker-dealer in reporting completed trades to customers and answering customer account inquiries

A

Which of the following individuals would be defined as an agent under the Uniform Securities Act? I An insurance salesperson who sells variable annuities to customers II A sales assistant at a broker-dealer who only accepts unsolicited orders III A salaried employee of an issuer that handles the sale of the issuer's securities to its employees through the issuer's ESOP IV A Chief Financial Officer of the issuer that negotiates with an investment banker to set the terms of an additional share offering A. I and II only B. III and IV only C. II and IV only D. I, II, III, IV

A

Which of the following is (are) NOT considered to be a "broker-dealer" under the Uniform Securities Act? I A person who effects securities transactions for its own account II A person who effects securities transactions for the account(s) of others III An agent of a broker-dealer who effects securities transactions IV An agent of a broker-dealer who effects securities transactions that are not recorded on the books of the broker-dealer A. III only B. I and II only C. I, II and IV only D. I, II, III, IV

A

Which of the following is (are) non-issuer transactions? I Purchase of a NASDAQ listed security II Purchase of a mutual fund share III Purchase of a limited partnership interest from the sponsor IV Purchase of an initial public offering from an underwriter A. I only B. I and II C. III and IV D. I, II, III, IV

A

A broker-dealer is defined as a person who: A. for compensation, engages in the business of advising others as to the value of securities B. engages in the business of effecting securities transactions for the account of others or for his own account C. issues or proposes to issue a security D. is not a bank, savings institution, or trust company

B

An issuer has filed a registration statement in the State proposing to offer 500,000 shares in a combined primary and secondary distribution, consisting of 300,000 newly issued shares and another 200,000 shares being offered by the officers of the firm. Under Uniform State Law, the 200,000 shares being sold by selling shareholders are a(n): A. issuer distribution B. non-issuer distribution C. commingling of securities D. exempt transaction

B

An issuer has filed a registration statement in the State proposing to offer 500,000 shares in a combined primary and secondary distribution, consisting of 300,000 newly issued shares and another 200,000 shares being offered by the officers of the firm. Under Uniform State Law, the: A. 500,000 shares being sold is an issuer transaction B. 300,000 shares being sold is an issuer transaction and the 200,000 shares being sold is a non-issuer transaction C. 300,000 shares being sold is a non-issuer transaction and the 200,000 shares being sold is an issuer transaction D. 500,000 shares being sold is a non-issuer transaction

B

Under the Uniform Securities Act, which of the following are defined as federal covered investment advisers? I Investment advisers managing assets of $100,000,000 or more II Investment advisers to investment companies registered under the Investment Company Act of 1940 III Investment advisers to insurance companies A. I only B. I and II C. II and III D. I, II, III

B

Under the provisions of the Uniform Securities Act, a "person" includes all of the following EXCEPT a(n): A. adult couple B. minor C. municipality D. corporation

B

Which individual is defined as an agent under the Uniform Securities Act? A. An individual representing a broker-dealer who takes phone messages from clients that wish to purchase or sell listed stocks B. An individual representing a broker-dealer who takes unsolicited orders for partnership units C. An individual representing an investment adviser who provides advice to clients about investing in securities D. An individual who works for an issuer selling that issuer's stock to the issuer's employees

B

Which of the following are EXCLUDED from the definition of a broker-dealer? I Any person who effects securities trades for the account of others II Any person who effects securities trades for his own account III Any person with no place of business in the state who only deals with financial institutions IV Issuers of securities A. I and II B. III and IV C. I, II, III D. I, II, III, IV

B

An officer of an issuer is engaged in the sale of that issuer's securities to the public. The issuer's securities are federal covered. The officer is: A. excluded from the definition of an agent because the securities involved are federal covered B. not defined as an agent because officers of issuers are excluded C. defined as an agent who must register in the State D. defined as an issuer and is not required to register in the State

C

The term "Investment Adviser" includes: A. lawyers who give advice about investments as part of an estate tax plan B. depository institutions that recommend bank products as investments C. publishers of reports on securities tailored to client situations D. broker-dealers who make recommendations to clients and charge commissions on the resulting trades

C

Under the National Securities Markets Improvement Act of 1996, which statement is FALSE? A. Federal covered advisers cannot be required to be registered in the State B. Federal covered securities cannot be required to be registered in the State C. Federal covered advisers cannot be investigated by the State Administrator D. Federal laws supersede State laws covering the same actions

C

Under the Uniform Securities Act, all of the following are defined as an investment adviser EXCEPT a(n): A. broker-dealer firm that charges for investment advice B. publisher of a stock market newsletter that makes recommendations based upon the specific investment situation of each specific client C. accountant who recommends types of investments to his clients as part of his accounting services D. research firm that sells an analysis of securities to each customer as part of an individualized financial plan

C

When is a bank considered to be a broker-dealer? A. Never, because banks are excluded from the definition of a broker-dealer under the Uniform Securities Act B. If an assistant manager at the bank solicits a customer to obtain a mortgage from the bank, which the bank then sells to Fannie Mae, which packages the mortgage into a pass-through certificate C. If a teller of the bank, when assisting a customer that is making a deposit of a payroll check, offers the customer a money market mutual fund that is primarily invested in Treasury Bills D. If a customer service representative at a bank call center offers a bank certificate of deposit of a customer that asks about an investment that is FDIC-insured and that cannot lose value

C

Which of the following are defined as "issuers" under the Uniform Securities Act? I For corporate securities, the corporation itself is the issuer II For collateral trust certificates, the person performing the functions of depositor under the Trust agreement is the issuer III For equipment trust certificates, the corporation is the issuer IV For oil and gas program fractional interests, the owner of the minerals is the issuer A. I only B. II and III only C. I, II, and III only D. I, II, III, IV

C

Which of the following individuals are defined as an agent under the Uniform Securities Act? I An individual who represents an issuer in selling exempt securities II An individual who represents an issuer in selling non-exempt securities III An individual who represents a broker-dealer in selling exempt securities IV An individual who represents a broker-dealer in selling non-exempt securities A. II and IV only B. III and IV only C. II, III, and IV D. I, II, III, IV

C

Which of the following is (are) issuer transactions? I Purchase of a NASDAQ listed security II Purchase of a mutual fund share III Purchase of a limited partnership interest from the sponsor IV Purchase of an NYSE listed security A. I only B. I and IV C. II and III D. I, II, III, IV

C

Which of the following is NOT EXCLUDED from the definition of an "investment adviser"? A. Broker-dealer B. Trust company C. Insurance company D. Savings and loan

C

Which of the following is NOT considered to be an "issuer transaction" under the Uniform Securities Act? A. Google Incorporated, selling its common shares in an initial public offering to investors via Dutch auction and then listing its shares on NASDAQ B. MM Mars Corporation, a privately held company that is proposing to go public by offering 20% of its common stock in an initial public offering and then listing its shares on the NYSE C. RJR Corporation, a publicly held company listed on the NYSE that is proposing to go "private" in a leveraged buyout transaction D. AJAX Company, a publicly held company listed on the AMEX (NYSE American), making a secondary offering of common shares that will be listed on the AMEX (NYSE American)

C

Who does NOT have to be registered in the State as an agent of a broker-dealer? A. A secretary that answers the phone and who takes orders B. A trading assistant who only accepts unsolicited customer orders C. A director of the company that is not involved in sales D. An officer of the company that oversees the firm's marketing

C

All of the following are defined as "professionals" that are excluded from the definition of an investment adviser under the Uniform Securities Act EXCEPT: A. lawyers B. engineers C. teachers D. geologists

D

Investment advisers may be formed as: I Partnerships II Corporations III Associations A. I only B. II only C. III only D. I, II, III

D

Under the Uniform Securities Act, all of the following statements are true EXCEPT an individual: A. representing an issuer in an exempt transaction is not defined as an agent B. who is a clerical employee in a broker-dealer is not defined as an agent C. who is a silent partner of a broker-dealer is not defined as an agent D. representing a broker-dealer in an exempt transaction is not defined as an agent

D

Under the Uniform Securities Act, which of the following would be defined as an investment adviser? A. U.S. Trust Corporation B. Countywide Savings and Loan C. IZZI Advisers, which has $110 million of assets under management D. ACCO Publishers, which has a website that charges for customized financial plans based on customer input

D

Which of the following are EXCLUDED from the definition of an investment adviser under the Uniform Securities Act? I An employee of an investment adviser II A federal covered adviser III A savings and loan institution IV A broker-dealer A. I only B. I and II C. III and IV D. I, II, III, IV

D

Which of the following are permitted to register with the SEC as a Federal Covered Adviser? I An adviser with $10,000,000 of assets under management II An adviser with $25,000,000 of assets under management III An adviser that is currently registered in 10 States IV An adviser that is currently registered in 15 States A. I and III B. I and IV C. II and III D. II and IV

D

Which term is NOT defined under the Uniform Securities Act? A. Investment Adviser B. Investment Adviser Representative C. Broker-Dealer D. Broker-Dealer Representative

D