Unit 9
Under the Investment Advisers Act of 1940, which of the following criteria are considered in determining whether a person is in the business of rendering investment advice? The person regularly gives advice on securities. The person derives his earnings from executing transactions on recommended securities. The person receives compensation from rendering advice on securities.
1 and 3
Under the NSMIA, as amended by Dodd-Frank, investment advisers with less than _____ in assets under management must register with the states.
100 mill
Under the NASAA Model Rule on financial requirements for investment advisers, unless an exception exists, investment advisers who have discretionary powers but not custody of customer funds are usually required to have a net worth in the amount of
10k
As defined in the Uniform Securities Act, which of these is not an investment adviser? A broker-dealer who charges for investment advice A publisher of a financial newspaper A person who sells security analyses A CPA who, as an incidental part of his practice, suggests certain tax-sheltered investments to his affluent clients
2 and 4
Fast Execution Services (FES), a registered broker-dealer, provides investment advice as an incidental part of its commission business. Madeleine, an agent registered with FES, charges for investment advice as a freelance investment adviser outside the scope of her employment at the firm. Which of the following statements are true? FES must register as an investment adviser. Madeleine must register as an investment adviser. Madeleine need not register as an investment adviser. FES need not register as an investment adviser.
2 and 4
Under IA-1092, which of these are true regarding an investment adviser? He makes advice his principal activity. He makes advice his regular activity. He is compensated directly for advice. He is compensated directly or indirectly for advice.
2 and 4
Under the Uniform Securities Act, which of the following are not required to register as investment adviser representatives in this state? An individual who sells advisory services in several states, including this one, for AAA Advisers, Inc. United Trust Company of America An agent for a broker-dealer advising customers for a fixed separate fee stated as a percentage of the customer's assets under management An investment adviser with no office in the state that does business exclusively with other investment advisers located in the state
2 and 4
A broker-dealer with an office in this state would be defined as an investment adviser if it charges which of these? Commissions for selling securities Commissions for selling securities while offering investment advice incidental to the sale of the securities A fee for selling investment research and additional fees in the form of commissions for the sale of securities Fees for investment research sold exclusively to institutions located in this state
3 and 4
An investment adviser with $20 million under management exercises investment discretion over client portfolios. If the firm's accounting manager were to discover that the firm's net worth was only $8,500, the USA would require the firm to do which of the following? Cancel all discretionary powers Immediately raise an additional $1,500 Send notice to the administrator before the close of business on the day following discovery Send a financial report to the administrator before the close of business on the day following the sending of notice
3 and 4
Under current law, which of the following would not be required to register as an investment adviser in a state? A) A person who has directed advice relating to securities to six individuals in that state within the past 12 months even though he has no place of business within the state B) A person who deals exclusively with broker-dealers in that state but maintains no place of business within the boundaries of the state C) A person whose home office is in the state and who manages less than $90 million in assets D) A person who limits advisory services exclusively to issuers of securities in that state while maintaining no office therein
B
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, an investment adviser must register with the SEC if A) its only place of business is outside of the United States, deals with fewer than 15 U.S.-based clients, and has less than $25 million in AUM in the United States. B) it has $35 million in client assets invested in cash or money market funds and $75 million of client assets invested in long-term bonds under management. C) it would be required to register in 15 or more states. D) it limited its clients to insurance companies only
B C makes you eligible, but not req'd
States may require investment advisers who are registered with the SEC to do each of the following except A) file any documents with the state that are filed with the SEC. B) pay state notice filing fees. C) maintain net capital requirements. D) file a consent to service of process.
C
Which of the following individuals does not come under the supervisory regimen of an investment adviser? A) An individual in the mailroom who has fewer than six retail advisory clients B) A CFA® preparing the firm's research reports C) The CPA engaged to perform the annual audit D) A financial planner registered with the firm as an IAR but who maintains a separate financial planning practice as an independent contractor
C
Which of the following is required to register as an investment adviser with the state securities Administrator? A) The author of a book on money and banking that is sold to residents of the state in which it is published B) A person with no office in the state whose only advisory clients are investment companies and banks in the state C) An investment advisory firm that opens an office in the state with less than $100 million in assets under management D) A newly formed investment advisory firm with $145 million in assets under management
C
Which of the following is required to register in a state under the Uniform Securities Act? A) A broker-dealer who has no place of business in the state and whose only clients in the state are limited to insurance companies, banks, and broker-dealers B) An investment adviser who has no place of business in the state and communicates with only five advisory clients in the state for the year C) An investment adviser who has a place of business in the state and whose only clients in the state are insurance companies, banks, and broker-dealers D) ABC State Bank, which provides investment advice in its branches throughout the state
C
Which of the following persons must register as an investment adviser under the Uniform Securities Act? A) An investment adviser whose advice is limited to securities issued or guaranteed by the U.S. government and who has three places of business in the state B) An investment adviser representative with no place of business in the state who has dealt with seven retail clients during the most recent 12 months C) An investment adviser who only serves institutional clients and whose only office is in this state D) An accountant who makes no pretense of providing investment advisory services but gives incidental advice to clients as a small part of accounting services provided
C
As defined in the Investment Advisers Act of 1940, all of the following would be considered investment advisers except A) a civil engineer making investment decisions for $5 million held in escrow while a bridge for which she is the project manager is being constructed. B) a tax attorney who manages investment portfolios for 50 clients. C) a professional plumber with excellent stock market skills who, as a hobby and without pay, manages portfolios for 8 of his neighbors. D) a portfolio manager who limits advice to municipal securities exclusively.
C
The Uniform Securities Act would not provide an exemption from registration as an investment adviser to an investment adviser who A) has no place of business in the state and limits clientele to other investment advisers. B) has no place of business in the state and limits clientele to banks and insurance companies. C) is an out-of-state investment adviser and directed business communications to fewer than 12 clients in the state in the past 12-month period. D) has no place of business in the state and limits clientele to broker-dealers.
C - more than 5
Which of the following would be excluded from the definition of investment adviser under the Uniform Securities Act? A) A civil damages attorney who advertises that he is available to assist clients in suggesting appropriate investments for their successful claims B) A finance teacher at a local community college who offers weekend seminars on comprehensive financial planning at a very reasonable price C) A broker-dealer charging a separate fee for investment advice D) The publisher of a weekly newsmagazine, sold on newsstands, that contains at least five stock recommendations per issue
D
Gibraltar Investment Advisers opened for business last week. Because of the clients brought over from previous affiliations of their investment adviser representatives, they have started with $94 million under management for various individual and corporate clients. They also signed a contract to manage an additional $10 million for a wealthy individual. Gibraltar will begin managing that individual's portfolio at the beginning of the next calendar quarter. Which of the following best describes Gibraltar's investment adviser registration requirements? A) Gibraltar's only option is to register at the state level because it currently manages less than $100 million in client funds. B) Gibraltar must register with the state(s) and then, within 90 days of the receipt of the additional $10 million, must register with the SEC. C) Gibraltar need not register as an investment adviser because it will manage funds for an insti
D -- eligible above 100 mill
On April 15, ABC Advisers, Inc., made application for registration as an investment adviser with State X. Absent a denial or stop order, registration will become effective
May 15
Form PF must be filed by
SEC-registered advisers with at least $150 million in private fund assets under management.
A person is excluded from the definition of investment adviser under the Investment Advisers Act of 1940 if the investment advice and reports are restricted to
US gov't secs
The term exempt reporting adviser refers to
advisers who rely on either the venture capital fund or the private fund adviser exemption
Unless renewed, the registration of which of the following securities professionals expires on December 31? Agents Broker-dealers Investment advisers Investment adviser representatives
all 4
NASAA's Model Rule on recordkeeping by investment advisers requires that partnership articles and any amendments, articles of incorporation, charters, minute books, and stock certificate books of the investment adviser and of any predecessor shall be maintained in the principal office of the investment adviser and preserved until
at least 3 years after termination
An investment adviser is required to disclose any financial condition that is reasonably likely to impair its ability to meet contractual commitments to their clients in any of the following cases except when the adviser
charges a performance-based fee to clients
The National Securities Markets Improvement Act of 1996 (NSMIA)
defined the term federal covered adviser
institutional clients (do/do not) count towards the de minimis requirement
do not (de minimus is 6)
who must provide consent to service
every legal person seeking reg or making a notice filing
An investment adviser whose primary business is the rendering of investment advice providing investment supervisory services is entitled to use the term
investment counsel
Which of the following are not investment advisers under the Uniform Securities Act? Joe advises customers regarding the value of gold and silver coins. The trust department of ABC Bank provides investment advice to its clients. Tammy writes a newspaper column in which she analyzes and recommends securities. Jack is an investment adviser representative.
none of them are
Under both state and federal law, the executive office of the investment adviser from which the officers, partners, or managers of the investment adviser direct, control, and coordinate the activities of the investment adviser is properly referred to as
principal office or place of business
The purpose of the Investment Advisers Act of 1940 is to provide
standards at the federal level for the regulation of investment advisors
When filing the consent to service of process, which of the following is true?
supplied with initial reg and remains on file permanently
The responsibility for administering the Investment Advisers Act of 1940 lies with
the SEC
Under the Uniform Securities Act, a state-registered investment adviser whose only office was in State N would not have to register in State O if its only clients were
trust companies
