s66

As an investment adviser, you are required to record and keep a record of every transaction in a security for a client's account within: 10 days of the end of each quarter 10 days of the end of each quarter, excluding direct obligations of the U.S. government 20 days of the end of each quarter 20 days of the end of each quarter, excluding direct obligations of the U.S. government

10 days of the end of each quarter, excluding direct obligations of the U.S. government Under both the Investment Advisers Act and the Uniform Securities Act, investment advisers are required to keep a record of every securities transaction within 10 days of the end of the quarter in which the transaction took place. Transactions in direct obligations of the U.S. government are excluded from this requirement. (62968)

A customer enters a sell stop-limit order for 100 shares at 18.50. The last round-lot sale that took place before the order was entered was 18.88. Round-lot sales that took place after the order was entered occurred at 18.25, 18.38, 18.50, and 18.63. The trade was executed at: 18.25 18.38 18.50 18.63

18.50 After the order was activated by the round-lot sale of 18.25, the order became a limit order to sell 100 shares at 18.50 or better. 18.50 is the first price that meets this requirement and would be the execution price.

Under the Uniform Securities Act, which of the following would be EXEMPT from the definition of an investment adviser? An insurance company that provides investment advice to clients for a small fee A company that provides investment advice to nonprofit organizations and municipalities for a fee A firm that solely provides advice on municipal bonds for a fee A trust company that provides investment advice to trust clients for a fee

A trust company that provides investment advice to trust clients for a fee A trust company is the only response that is exempt from the definition of an investment adviser. Under the Uniform Securities Act, the following persons are exempt from the definition: Banks, trust companies, or savings institutions Lawyers, accountants, teachers, and engineers whose advice is incidental to their profession Broker-dealers whose advisory services are incidental to their business Bona fide publishers Federal covered advisers Any other person who is designated by the Administrator

According to NASAA provisions, an investment adviser that maintains custody of a client's funds must: Notify the client of the location of the funds within 90 days of taking custody Provide prior verbal notification to the Administrator of its intention to take custody of the client's funds Notify the client of the location of the funds within 30 days of taking custody Be subject to a surprise audit by an independent accountant

Be subject to a surprise audit by an independent accountant If an investment adviser maintains custody of its clients' funds, it must provide prompt written notification as to the location of where the funds are being held as well as prompt written notification if that location is changed. Choice (b) is incorrect since an adviser is required to promptly notify the Administrator in writing when it takes custody. Any audit of the records must be performed by an independent accountant, not by the Administrator. (88895)

Section 15 of the Securities Exchange Act of 1934 regulates: Exchange-listed securities transactions Broker-dealer registration The sale of equity securities by insiders The delivery of prospectuses for nonexempt securities

Broker-dealer registration Section 15 of the Securities Exchange Act of 1934 requires broker-dealers to register with the SEC. (62957)

Under the Uniform Securities Act, a person whose advice is limited to U.S. government agency securities is defined as a(n): Federal covered adviser and is not required to register with the Administrator Agent and required to register with the Administrator Broker-dealer, but not required to register since the securities are exempt Investment adviser and must register with the Administrator

Investment adviser and must register with the Administrator There is no exemption or exclusion under the Uniform Securities Act for a person providing advice solely related to U.S. government securities. However, under the Investment Advisers Act of 1940, a person whose advice is limited to direct obligations of the U.S. government is not required to register. Since the person is not effecting transactions, he would not be defined as a broker-dealer or an agent. (67752)

If a new investment advisory firm is created and registered with the SEC, which of the following statements would be TRUE? It may not register unless it has $100 million or more under management It must register with both the SEC and the Administrator It may not register with the SEC until it has been in business for one year It may register with the SEC at any time without restriction under the Investment Advisers Act of 1940

It may not register unless it has $100 million or more under management Under the Investment Advisers Act of 1940, advisers that manage assets of $100 million or more generally register with the SEC and are referred to as federal covered advisers. IAs are not required to register with both the state and federal regulators and there is no one-year business requirement. The SEC has created a buffer for investment advisers with assets under management (AUM) between $90 million and $110 million and clarifies with whom they should be registered. An adviser may register with the SEC once it reaches AUM of $100 million. However, an adviser must register with the SEC if it has AUM of $110 million or more. Once registered with the SEC, a mid-sized adviser may remain registered with the SEC provided it has AUM of at least $90 million. This means that a mid-sized adviser that is currently registered with the SEC may remain registered with the SEC if it has AUM of at least $90 million. If an adviser's AUM falls below $90 million, it must instead register at the state level. (67476)

Schedule 13D is required to be filed with the SEC by any person, or those acting together, who acquire more than 5% of the voting stock of a public corporation. Which of the following statements is NOT TRUE regarding Schedule 13D? It must be filed within 10 days of acquisition of the stock It must be filed with the SEC, the issuer, and the appropriate exchange A copy must be given to the current shareholders It must disclose the purchaser's purpose for acquiring the stock

A copy must be given to the current shareholders

Every investment advisory contract must be in writing and it must include which of the following provisions? A statement that assignment of the contract is prohibited A statement that defines the length of time for which the services are contracted A statement that limits the investment adviser's liability to $500,000 per client A statement that fully explains the percentage of the capital gains that will be shared with the adviser

A statement that defines the length of time for which the services are contracted An investment adviser's contract must be in writing and clearly disclose the specific length of time that it is in force. Provided customer consent is obtained, advisory contracts may be assigned to another advisory firm. Advisory contracts may not include a clause which attempts to limit an adviser's liability. Also, an adviser is prohibited from sharing in a client's capital gains unless the client is qualified and meets specific financial criteria. (67615)

Under the Investment Advisers Act, which of the following statements is TRUE? If an IA is given brokerage discretion by a client, the IA may not choose a full-service broker-dealer due to the higher fee schedule Since an IA is prohibited from exercising brokerage discretion, the client must choose a broker-dealer through whom the trades will be executed An adviser who has investment discretion may not always have brokerage discretion Commissions may not be levied on transactions if the client is paying an advisory fee

An adviser who has investment discretion may not always have brokerage discretion The client can decide which firm will execute the trades, or the client can give the investment adviser brokerage discretion. If given the authority to select a broker, the investment adviser has the flexibility to select either a full-service broker or a discount broker. Information regarding these arrangements is found in Form ADV Part 2. (62459)

Under the Uniform Securities Act, which of the following statements is NOT TRUE concerning the state registration of an agent? An agent may only sell securities that have been properly registered in a state or qualify for an exemption from registration An agent's registration to sell securities in a given state expires at the end of the broker-dealer's fiscal year An agent may only solicit business in a state if both the agent and broker-dealer are registered in that state If an agent leaves a broker-dealer to go to another broker-dealer, the agent and both broker-dealers must notify the Administrator of the change

An agent's registration to sell securities in a given state expires at the end of the broker-dealer's fiscal year The licenses of all agent, broker-dealer, investment adviser, and investment adviser representatives expire on December 31 each year and must be renewed in order to be effective. Renewal is accomplished by the payment of a filing fee. (62046)

If an adviser has custody of customer funds and securities, the submission of Form ADV-E must be performed by: The adviser within 120 days after the completion of an audit The adviser within 90 days after the completion of an audit An independent accountant within 120 days after the completion of an audit An independent accountant within 90 days after the completion of an audit

An independent accountant within 120 days after the completion of an audit Submission of Form ADV-E with the SEC is required if the adviser has custody of client funds and securities. The form must be filed by an independent accountant, not the adviser, within 120 days after the completion of the audit. (79297)

Under the Uniform Securities Act, what information is NOT disclosed in an investment advisory contract? Any other states in which the investment adviser is registered The manner in which the advisory fee will be computed A provision disallowing the investment adviser to assign the contract to another party without client consent A provision prohibiting the investment adviser from being compensated based on a share of capital gains

Any other states in which the investment adviser is registered The investment advisory contract must disclose the manner in which the adviser will be compensated. The contract must also include a statement that the adviser may not assign the contract to another party unless the client consents and may not be compensated based on a share of capital gains. (62944)

Kevin is an agent of CMP Broker-Dealers. Kevin is currently registered in five states. CMP is registered in ten states. Kevin only transacts business with institutional clients. Due to recent mergers, some of Kevin's clients will be relocating to North Carolina and CMP now wants to open a new office there. Kevin will not be moving from his current office in Missouri, a state in which both Kevin and CMP are registered. Under the USA: Both Kevin and CMP need to be registered in North Carolina CMP needs to be registered in North Carolina, but Kevin does not Neither Kevin nor CMP needs to be registered in North Carolina Only Kevin needs to be registered in North Carolina

Both Kevin and CMP need to be registered in North Carolina Under the USA, the term broker-dealer does NOT include any person that does not have a place of business in the state AND only transacts business with issuers, other broker-dealers, financial institutions, or institutional buyers. Since CMP is opening an office in North Carolina, the firm would need to be registered in that state regardless of the clients it sells securities to or conducts business with. Since the broker-dealer will be registered in North Carolina, any agent of that broker-dealer effecting transactions in that state would also need to be registered. (79475)

If a publicly traded corporation has 20,000,000 shares outstanding and an investor buys 1,400,000 of the shares in the open market, which of the following forms would he be required to file with the SEC? None, since the client has not purchased more than 10% of the shares Form 13F Form 13D Form 144

Form 13D If a person acquires more than 5% of a public company's common voting shares, Form 13D must be filed with the SEC. In this example, since the customer has acquired 7% of the 20,000,000 outstanding shares, he is subject to the filing requirement. Form 13F is filed by institutional investment managers that exercise investment discretion over $100 million or more in securities. Form 144 is filed when an investor intends to sell restricted (private placement) stock or when an insider intends to sell control stock. (67610)

According to the Uniform Securities Act, the Administrator may require federal covered advisers to: Register in every state in which they have a branch office Give notice or notice file in any state where they transact business with six or more individual retail clients Register with the Administrator in any state where they transact business with six or more individual retail clients Do nothing because the Administrator has no jurisdiction

Give notice or notice file in any state where they transact business with six or more individual retail clients The Administrator may require federal covered investment advisers to notice file if they transact business with more than five noninstitutional clients over a 12-month period. Notice filing is not a form of registration. Instead, it is the process of a federal covered adviser sharing information with the Administrator that it has filed with the SEC. (67640)

An employee of an investment company is negotiating a contract with an investment adviser. The adviser wants to charge the employee a 2% management fee plus 20% of any appreciation realized in any given quarter. The employee is not opposed to the idea, but in order to comply with the law, the employee must: Be an accredited investor Have assets under management of at least $1 million or a net worth of more than $2 million Have an existing brokerage account with an affiliated firm Be identified as an institutional investor

Have assets under management of at least $1 million or a net worth of more than $2 million Investment advisers may only charge performance-based fees to clients who are qualified. A qualified client is one who has at least $1 million of assets under management with the adviser or has a net worth of at least $2 million. To determine net worth, the value of a client's primary residence and any associated mortgage are excluded. (67629)

Which of the following is/are regulated under the Investment Company Act of 1940? Investment companies investing money into other investment companies The firm that serves as a mutual fund's custodian and holds its assets The minimum rate of return required to remain registered as a fund The performance of the investment company I only I and II only I, II, and III only All of the above

I and II only The Investment Company Act of 1940 regulates investment companies and their investment adviser, custodian bank, and distributor. The Investment Company Act of 1940 does not regulate performance nor does it require minimum rates of return in order to maintain registration. (67537)

Under the Uniform Securities Act, an individual applying for an investment adviser representative registration may be required by the Administrator to: Pass an examination Pay a filing fee Maintain a minimum net capital I and II only I and III only II and III only I, II, and III

I and II only When an individual applies for an investment adviser representative registration, the Administrator may require the individual to pass an examination (which may be oral, written, or both) and pay a filing fee. Investment advisers and broker-dealers may be required to maintain a minimum net capital in addition to meeting the two previously mentioned requirements. (62988)

Which of the following documents must be retained by an investment adviser regarding its IARs? Fingerprint cards Background checks Registration applications Employment applications I only II only I and III only III and IV only

I and III only NASAA Recordkeeping Requirements for IAs include the retention of all documents that the IA files with either the state or federal regulators regarding itself and its representatives, such as applications for registration, amendments, renewal filings, and correspondence. (62848)

Honcho Rio Investments is a single-office investment advisory firm based in New Mexico. The firm is looking to expand its business to New Jersey. Under the Uniform Securities Act, in which of the following situations would Honcho Rio NOT be considered an IA in New Jersey? The firm transacts business only with New Jersey broker-dealers. The firm transacts business only in New Jersey with a few employee benefit plans containing assets under $500,000. The firm's sole business in New Jersey is with 12 or fewer noninstitutional customers within a twelve-month period. The firm's sole business in New Jersey is with a limited number of federal covered advisers. I and II only I and IV only I, II, and IV only I, III, and IV only

I and IV only Under the Uniform Securities Act, any firm without an office in a given state that deals only with banks, broker-dealers, and advisers, would be exempt from registration. The Act also exempts firms dealing with five or fewer retail customers. (Honcho Rio is dealing with too many individuals to take advantage of this exemption.) Under the USA, the exemption for employee benefit plans applies only to plans with assets of $1 million or more; therefore, Honcho Rio is not entitled to this exemption either. (62423)

A broker-dealer has their principal office in Texas. They transact business with 8 banks in Arizona, 3 investment companies in Nevada and a client who is attending grad school in Ohio. Which state(s) must the broker-dealer be registered in? Texas Arizona Nevada Ohio I only I and II only I, II, and III only I, II, III and IV

I only According to the Uniform Securities Act, a broker-dealer that has no place of business in a state and only transacts business there with issuers, other broker-dealers, financial institutions, or existing clients who are not residents of the state, are excluded from the definition of a broker-dealer and not subject to registration. (89960)

A broker-dealer would be required to register in Pennsylvania if the broker-dealer: Has an office in Pennsylvania and executes nonissuer transactions of securities listed on a national securities exchange Has no office in Pennsylvania and executes nonissuer transactions of securities listed on a national securities exchange with clients that are residents of Pennsylvania Has an office in Pennsylvania and executes transactions of municipal securities with clients that are not residents of Pennsylvania Has no office in Pennsylvania and executes transactions of municipal securities with clients that are residents of Pennsylvania I and II only I and III only III and IV only I, II, III, and IV

I, II, III, and IV In all four choices, the broker-dealer would be required to register in Pennsylvania. A nonissuer transaction of a security listed on a national securities exchange is an exempt transaction and a municipal security is an exempt security. A broker-dealer executing a transaction in an exempt security or exempt transaction is required to register, unless it is exempt from the definition of a broker-dealer in that state. Since the broker-dealer either has an office in Pennsylvania or is transacting business with residents of that state, it would be required to register. (62678)

A cash forward contract is different than a futures contract because the cash forward contract is: A personal transaction between the buyer and the seller Not for a standard amount of the commodity, but rather is for a specific amount and quality of the cash commodity Not negotiated by open outcry in the trading pits and is not subject to the rules of a futures exchange I only I and II only II and III only I, II, and III

I, II, and III A cash forward contract is a personal transaction for a specific amount and quality of the cash commodity and is not subject to the rules of a futures exchange.

According to NASAA's Statement of Policy on Unethical Business Practices, what information is required to be included in the renewal of an investment advisory contract? The investment advisory fee A statement that no assignment of the contract will be made by the investment adviser without the consent of the client A statement regarding the amount of prepaid fees that must be returned if the contract is terminated The educational background of each IAR I and II only I, II, and III only I, II, and IV only I, II, III, and IV

I, II, and III only NASAA's Statement of Policy on Unethical Business Practices states that the renewal of an investment advisory contract must include the disclosure of all fees and services provided, the method for computing the advisory fee, the amount of prepaid fees to be returned in the event of an early termination of the contract, and the fact that no assignment of the contract will be made without the client's consent. There is no requirement to disclose the educational experience of each investment adviser representative that works with clients. (67517)

If the dollar is increasing against foreign currencies, which TWO of the following results would most likely occur? An improvement in the U.S. balance of trade A worsening of the U.S. balance of trade An increase in imports into the U.S. Increased exports by the U.S. I and III I and IV II and III II and IV

II and III If the U.S. dollar is rising against foreign currencies, U.S. goods will be more expensive to foreigners. This should lead to decreased U.S. exports and increased imports into the U.S. These events would worsen the U.S. balance of trade.

A client is seeking a yield of 6.8%. An investment adviser has located two bonds with similar credit quality, duration, and the client s desired yield. After performing discounted cash flow analysis on each bond, the adviser has determined that Bond A is trading at a discount to its present value, while Bond B is trading at a premium to its present value. Which of the following statements is NOT TRUE? Bond A is priced attractively and should be purchased. Bond B is priced attractively and should be purchased. The investor will earn an annual interest rate greater than 6.8% on Bond B. The investor will earn an annual interest rate greater than 6.8% on Bond A. I and III only II and III only II and IV only II, lll, and IV only

II and III only Discounted cash flow (DCF) analysis evaluates the present value of all coupon payments and the repayment of a bond's principal at a present value, based on a rate of return. This makes it possible to evaluate a bond's value against the investor's desired rate of return. The sum of each of the discounted cash flows, plus the present value of the bond's principal, determine the total value of the bond. By comparing this value to the current price of the bond, the adviser will be able to determine if the bond is an attractive investment for a client. If a bond is trading at a discount to its present value, the investor will earn more than the interest rate that has been used to calculate the present value. Conversely, a bond that is trading at a premium to its total present value will be worth less than the price of the bond. (The investor would be overpaying for the bond.)

A futures contract is different than a cash forward contract because the futures contract is: A personal transaction between the buyer and the seller For a standard amount of the commodity rather than for a specific amount and quality of the cash commodity Not negotiated by open outcry in the trading pits and not subject to the rules of a futures exchange Or may be offset on the exchange where the contract was established I and III only I and IV only II and III only II and IV only

II and IV only A futures contract is a standardized contract whose terms are set by the exchange it trades on. Buyers and sellers of futures contracts are not required to take delivery of the underlying commodity. Instead, futures positions can be offset on the exchange where the contract is established.

According to Sarbanes-Oxley, a public corporation's financial statements must be certified by the corporation's: Chief auditor Chief executive officer Legal counsel Chief financial officer Compliance officer I only I and II only II and IV only II, III, and V only

II and IV only Sarbanes-Oxley is a federal law that, among other things, requires a corporation's annual and quarterly financial reports to be certified by the CEO and CFO of the corporation. (62840)

Bill is an investment adviser representative for New Age Investment Advisory Services. New Age has satellite offices in Florida and California, but its principal office is in New York City. New Age manages under $25,000,000 in assets. Its largest client is the Aquarius SmallCap Growth Mutual Fund. Bill works in the New York office and has clients in Florida, New York, and New Jersey. He must register as an investment adviser representative in which states? California New York New Jersey Florida I, II, and III only II only II, III, and IV only I, II, III, and IV

II only Even though New Age has less than $25,000,000 under management, it is an adviser to a registered investment company. As such, the firm is a federal covered investment adviser. Bill must register as an investment adviser representative in New York since he has a place of business in that state. (79472)

Under the Uniform Securities Act, an investment adviser must meet all of the following conditions in order to have custody of client assets, EXCEPT: Obtaining written discretionary authority from each client for whom it is holding funds and/or securities Sending each client an itemized statement of his or her account at least quarterly Verifying client funds and securities at least once every calendar year in an unannounced audit by an independent accountant Making sure all client funds are deposited in bank accounts containing only client funds, in the name of the adviser as trustee or agent

Obtaining written discretionary authority from each client for whom it is holding funds and/or securities The rules for advisers having custody of client assets are independent of the rules for discretion. The client accounts for which the adviser maintains custody may be either discretionary or nondiscretionary. (62901)

According to the USA, if the ownership of a registrant changes, it must do which of the following? Notify the Administrator at the time of renewal Promptly file a new application with the Administrator Promptly file a correcting amendment with the Administrator Provide notification of the change to the Administrator by altering its books and records

Promptly file a correcting amendment with the Administrator Whenever there is a material change of ownership for a registrant, a correcting amendment to its registration must be filed with the Administrator promptly. While registrants are not required to file a new application, they may not wait until the time of their annual renewal to notify the Administrator of the change. (67677)

Which of the following actions by an agent of a broker-dealer is NOT permitted? Providing securities-related advice to a customer and receiving a commission based on the purchase of the security by the customer Describing the features of a trust to a customer Providing advice to a customer regarding the type of joint account to be opened Providing advice to a customer regarding the investments within a custodial account

Providing advice to a customer regarding the type of joint account to be opened Giving advice to customers regarding the type of joint account to be opened is legal advice and, therefore, may only be provided by attorneys. (62014)

Walck Asset Management has $67.5 million in assets under management. Under the Uniform Securities Act (USA), if Walck transacts business with clients in State A, it is: Required to pay an initial and renewal filing fee to State A Not required to pay any filing fees in State A Required to pay filing fees in State A only if it has an office in State A Required only to pay an initial filing fee in State A

Required to pay an initial and renewal filing fee to State A Advisers with assets of $110 million or more must register with the federal government and are known as federal covered advisers. Advisers with assets of $100 million up to $110 million may register with the federal or state government. Those with fewer assets generally fall under state jurisdiction. Since the Advisory firm has assets under management of less than $100 million, it must register with State A and pay a registration fee and annual renewal fee, as well as in any state in which the firm is required to register. (79481)

Which of the following securities may have their registration denied or revoked by the Administrator? Securities issued by a nonprofit organization Municipal bonds Stock issued by a bank that is chartered in a different state U.S. Treasury bonds

Securities issued by a nonprofit organization Generally, states are not permitted to revoke an exemption that has been granted under the Securities Act of 1933. However, nonprofit securities (choice a), exchange-listed securities, and investment contracts for employee-benefits plans may be denied registration by the state Administrator. (67570)

An adviser who manages $140 million in assets is recommending the sale of Nasdaq-listed securities to a client. Which of the following statements is TRUE? The adviser is a federal covered adviser and subject to registration with the state Administrator, while the securities are nonexempt and subject to registration with the state Administrator The adviser is a federal covered adviser and required to file a notice filing with the SEC, while the securities are exempt from registration with the SEC The adviser is a non-federal covered adviser and is exempt from SEC registration, while the securities are federal covered and exempt from registration with the SEC The adviser is a federal covered adviser and exempt from state registration, and the securities are federal covered securities and exempt from state registration

The adviser is a federal covered adviser and exempt from state registration, and the securities are federal covered securities and exempt from state registration Advisers who manage $110 million or more in assets must register with the SEC, not the state Administrator. Those registered with the SEC are federal covered advisers and exempt from state registration, though subject to Notice Filing. Securities listed on an exchange or Nasdaq, are federal covered securities and are exempt from state registration. (62830)

The Administrator may require an investment adviser to file which of the following documents along with its initial ADV application? A list of all customer securities and the location where they are held A list of all of its recommendations for the past five years A list of all customers and their addresses The firm's current financial condition

The firm's current financial condition

Which of the following is the LEAST important factor when planning for college? The parents' income The current cost of tuition The assumed rate of return The inflation rate

The parents' income When planning for college, a person needs to anticipate what tuition costs will be in the future. An effective method of estimating the future cost is to use the current cost of tuition and inflate it over time. Since the investment made today will compound over time, a person must select an assumed rate of return. (75939)

Under the Securities Exchange Act, a customer confirmation need NOT disclose: The amount of remuneration to be received from a customer in connection with an agency transaction That a portion of the commission was returned to a third party in the form of a cash rebate The broker-dealer's capacity in the transaction The time of the trade

The time of the trade Rule 10b-10 of the Securities Exchange Act requires broker-dealers to make disclosures on customer confirmations. The actual time of the trade does not require disclosure unless requested. All of the other disclosure items would be required. (62421)

A client has terminated an investment advisory contract one week after signing the agreement. The adviser informs the client that a prorated portion of the advisory fee will be retained by the adviser, and the remainder will be sent to the client. Under the USA: This practice is considered unethical This practice is acceptable This practice is considered fraudulent The client may apply for a rescission

This practice is acceptable

Rather than utilizing a custodian, an investment adviser chooses to maintain custody of customer assets. According to the Investment Advisers Act of 1940, the adviser is required to: Verify client funds and submit to an unannounced annual audit by a CPA Submit to an unannounced annual audit by the SEC File Form ADV-E with the SEC Have a qualified custodian verify the clients' funds and securities

Verify client funds and submit to an unannounced annual audit by a CPA If an IA acts as a qualified custodian and holds customer cash and securities, the assets must be subject to an unannounced annual audit by a CPA. At the completion of the audit, the CPA (not the IA) must file Form ADV-E. Choice (b) is incorrect because the SEC lacks sufficient resources to audit every IA on an annual basis. (67626)

According to the Investment Advisers Act of 1940, when is an investment adviser required to provide a balance sheet to its clients? When the adviser requires the prepayment of a fee that is greater than $500, six months or more in advance of providing service When the adviser requires the prepayment of a $500 initial advisory fee When the adviser requires the prepayment of a fee that is greater than $1,200, six months or more in advance of providing service When the adviser has taken custody of the client's funds or securities

When the adviser requires the prepayment of a fee that is greater than $1,200, six months or more in advance of providing service Under the provisions of the Investment Advisers Act of 1940, an investment adviser must provide clients with its balance sheet if it requires the prepayment of a fee in excess of $1,200, six months or more in advance of the service. For questions regarding the requirement to send a balance sheet, it is important to identify whether it is referencing state or federal law. At the state level, a balance sheet is provided for collecting/soliciting a prepaid fee of greater than $500, and also for maintaining custody or discretionary control of clients' assets. However, at the federal level, a balance sheet is provided only if the adviser is collecting/soliciting a prepaid fee of greater than $1,200. (67751)

Under the Investment Advisers Act of 1940, when is a firm's registration required to be electronically filed or renewed? Within 30 days of the calendar year-end Within 90 days of the adviser's fiscal year-end Within 30 days of the adviser's fiscal year-end Within 90 days of the calendar year-end

Within 90 days of the adviser's fiscal year-end Under the Investment Advisers Act of 1940, all IAs are required to renew their registration within 90 days of the end of their fiscal year. However, under the Uniform Securities Act, all registrations expire at the end of the calendar year and then must be renewed. The federal regulation of IAs is based on a fiscal year, while the state law is based on a calendar year. (67652)