UNIT 9 MC
Pension consultants are not eligible for SEC registration until their AUM reaches
$200 million.
A state-registered investment adviser who maintains custody of client assets must maintain net worth of at least
$35,000 or a surety bond of the same amount (not both)
If the net worth should fall below that amount, the firm must immediately obtain a surety bond rounded to the next
$5,000 to meet that level
excluded from definition of investment adviser
-Publishers and writers of general, regular, paid circulation publications -giving advice dealing only with U.S. government securities -work for banks and trust companies
Under the Investment Advisers Act of 1940, an adviser's registration usually becomes effective how many days after it is filed?
45
Under the Investment Advisers Act of 1940, for how many years must an investment adviser maintain the records required by regulation?
5 yrs
The annual updating amendment to Form ADV must be filed within how many days of the adviser's fiscal year-end.
90
Under the Uniform Securities Act, which of the following is included in the definition of an investment adviser?
A broker-dealer who receives a flat fee for analyzing a customer's investment objectives and recommending a portfolio of securities
When, if ever, would a broker-dealer be required to register as an investment adviser?
If it charges distinct fees for investment advice or management
Form ADV If the applicant is registering on the state level,
Part 1B is also required.
The Investment Advisers Act of 1940 excludes from the definition of investment adviser persons whose advice does
Relates solely to issues issued by or guaranteed by the U.S. Treasury
A state-registered investment adviser suddenly incurs a liability that materially affects its net worth, causing it to drop below the required minimum. Which of the following statements is true?
The investment adviser must notify the Administrator by the close of business on the following business day.
following statements is true regarding registration of an investment adviser if the application has not been amended?
Unless specified earlier by the Administrator, the registration becomes effective no later than noon on the 30th day after application.
The document that gives the Administrator the right to process complaints against a registrant is known as
a consent to service of process.
A consent to service of process required by an Administrator is
an agreement whereby a registrant will be bound by any legal action or subpoena served on the Administrator as if it had been served on the registrant.
Form ADV Part 1A is the form filed by all applicants for registration as
an investment adviser.
Under the Uniform Securities Act, a person whose business model is selling reports on a subscription basis concerning specific securities to investors based on their individual objectives will be defined as
an investment adviser.
Form ADV Part 2B is the
brochure supplement.
Investment advisers who have no place of business in the state are exempt from registration, provided their clients are
broker-dealers, other advisers, insurance companies, banking institutions, or government agencies. Also exempt are those advisers who have five or fewer clients in a 12-month period.
Under the language of the USA, a commercial bank is excluded from the definition of
investment adviser whereas a bank holding company subsidiary is not
The term federal covered investment adviser would apply to a person who
is registered as such under the Investment Advisers Act of 1940.
Form ADV Part 2A
is the brochure
With less than $100 million in assets under management and no investment company clients, Kapco cannot qualify as a federal covered adviser. Therefore, the firm must register in each state in which
it maintains an office, regardless of the nature of its clientele in that state
The powers of the Administrator include the ability to determine
minimum net worth requirements for investment advisers.
Form ADV Both Part 2A and 2B are filed with the Administrator when registering in a state. But when registering with the SEC, those forms are
not filed with the SEC but are maintained in the principal office of the adviser
A state-registered investment adviser who maintains custody of client assets, If the net worth should fall below the minimum, by the close of the next business day after discovery, notice of the deficiency must be sent to
the Administrator of the state in which the principal office of the adviser is located Then, by the close of business the day after that a detailed financial report, including the number of clients served by the adviser, must be sent to the Administrator
The final responsibility for ensuring that investment adviser representatives are adequately supervised is that of
the chief compliance officer.
All of the following information is required on SEC registration Form ADV except
the personal securities holdings of the principals of the firm.
Wealth Preservation Specialists is a covered adviser that is organized as a partnership. If the firm were to dissolve, partnership agreements must be kept for
three years after the dissolution.
if assets under management equal $110 million or more, SEC registration is required
tru
t/f A trust company is not an investment adviser under the USA.
true
t/f Advisers who only service insurance companies or venture capital funds are exempt, as are advisers performing intrastate who do not give advice to private funds or on listed securities.
true
