Series 65 CH 2 -USA laws
If a person offers to buy a security after reading a tombstone ad, the offer to buy would be considered: A) unsolicited. B) null and void. C) solicited. D) illegal.
A) unsolicited.
All of the following are exempt transactions EXCEPT a(n): A) certified financial planner selling NYSE-listed securities to numerous high net worth individual clients. B) administrator of an estate selling securities to liquidate the estate's assets. C)client, on his own initiative, requesting a transaction in a security that is not registered in the state. D) pledgee liquidating securities that were put up as collateral for a loan that has now gone into default.
C)client, on his own initiative, requesting a transaction in a security that is not registered in the state.
Which 3 securities are exempt from registrations under USA but are not exempt from federal registrations under the Securities Act of 1933?
Foreign government securities Insurance company securities Federal covered securities (traded on NYSE or Nasdaq, and registered investment companies)
Under the USA, a state securities Administrator can: I. start an investigation against a registrant even if a violation has not yet occurred. II. subpoena witnesses living in the Administrator's state only. III. subpoena witnesses living outside the state. IV. begin an investigation only after a violation of the act has occurred. A) II and IV. B) I and III. C) II and III. D) I and II.
B) I and III.
The Uniform Securities Act authorizes the state Administrator to require: I. either oral or written qualification examinations of investment adviser representatives and officers of investment adviser partnerships or corporations. II. officers of investment advisers to pass a qualification examination. III. an applicant for initial registration to publish an announcement of the application in one or more specified newspapers published in the state. IV. investment adviser representatives to pass a qualification examination. A) I only. B) I, II, III and IV. C) III and IV. D) I and II.
B) I, II, III and IV.
The Uniform Securities Act grants state securities Administrators all of the following powers EXCEPT the power to: I. conduct investigations involving dealers located in states other than the Administrator's state. II. issue subpoenas to agents and brokers not residing in the Administrator's state. III. revoke or suspend a registration without an opportunity for a hearing because of the confidential nature of the offense. IV. limit the length of an investigation to one year from the alleged offense, rather than place a registrant in continuous jeopardy. A) I, II and IV. B) III and IV. C) I and II. D) II and III.
B) III and IV. Explanation State securities Administrators may conduct investigations involving dealers in other states and issue subpoenas to agents and brokers not residing in the Administrator's state. Administrators may not revoke or suspend a registration without an opportunity for a hearing. Administrators have no limits on the amount of time they may devote to an investigation of a registrant
While an application for registration as an agent of a broker-dealer is still pending, that person would be permitted to: A) accept unsolicited orders only. B) assist registered employees of the firm by doing research on securities they are following. C) limit her acceptance of orders to those from the broker-dealer's existing clients. D) engage in no activity at the office other than studying for the exam.
B) assist registered employees of the firm by doing research on securities they are following.
To register a sole proprietorship as an investment adviser in a state, the application for initial registration (Form ADV) must be filed with the appropriate party. This application must include: I. a consent to service of process. II. the appropriate fees. III. any information to be furnished or disseminated to any client or prospective client. IV. a copy of the articles of incorporation for the business A) I, II, III and IV. B) I and IV. C) I, II and III. D) II and III.
C) I, II and III.
Section 403 of the USA Act states that the Administrator may, by rule or order, require the filing of any sales and advertising literature addressed or intended for distribution to prospective investors, including clients or prospective clients of an investment adviser unless the security or transaction is exempted by Section 402 or is a federal covered security. This would include any: I. circulars. II. form letters. III.investment adviser's website. IV, prospectus. A) III and IV. B) I and II. C) I, II, III and IV. D) I, II and III.
C) I, II, III and IV.
Under the Uniform Securities Act, it is legal for a investment adviser representative to tell a client that: A) a registered security may lawfully be sold in that state. B) a registered security has been approved for sale in the state by the Administrator. C) an exempt security is not required to be registered because it is safer than a nonexempt security. D) her qualifications have been found satisfactory by the Administrator.
C) an exempt security is not required to be registered because it is safer than a nonexempt security.
Under the Uniform Securities Act, which of the following are cause for disciplinary review action by the state securities Administrator? I. Joe files an application for registration as an investment adviser and omits the fact that he was convicted of fraud 12 years ago. II. Tom, a registered investment adviser, fails to disclose that he recently filed for bankruptcy protection. III. The ABC Advisory Group, a registered investment adviser, employs several investment adviser representatives as independent contractors. IV. Ed is suspended from conducting business in the securities industry for a period of 6 months by FINRA (NASD). A) II and IV. B) III and IV. C) I and II. D) I, II and IV.
D) I, II and IV.
It would not be considered an unethical and dishonest business practice for an agent registered with a broker-dealer to divide or otherwise split the agent's commissions, profits or other compensation from the purchase or sale of securities I. with any person also registered as an agent for the same broker-dealer. II. with any person also registered as an agent for a broker-dealer under direct or indirect common control. III.as long as the arrangement is in writing. IV. as long as the client has approved of the sharing arrangement A) I, II, III and IV. B) I, II and III. C) III and IV. D) I and II.
D) I and II.
NASAA's Statement of Policy on Dishonest or Unethical Business Practices of Broker-Dealers and Agents would likely consider which of the following to be prohibited activities? I. A client is rather insistent on purchasing a security deemed unsuitable by the agent. In an effort to dissuade the client, the agent furnishes several websites of analysts who have issued negative reports on that security II. An agent takes an order from the client's attorney without written trading authorization III. An agent takes an order from the secretary of a nondiscretionary client who is too busy to give the order herself IV. An agent encourages a client to acquire a security on the basis of research recently published by the broker-dealer for its institutional clients A) I and II B) I and III C) II, III, and IV D) II and III
D) II and III
Under the Uniform Securities Act, all of the following are included in the definition of the term exempt transaction EXCEPT a sale of: A) unregistered non-exempt securities in an unsolicited transaction. B) securities to a bank. C) nonexempt securities to a broker-dealer. D) securities to an individual investor with a net worth of more than $5 million.
D) securities to an individual investor with a net worth of more than $5 million.