USA - Fed Securities Acts

Question 1

Intrastate investment advisers are exempt from the ______ definition of the term

Answer 1

exempt

Question 2

The de minimus exemption from the fed definition of investment advisor is any IA that has had no more than ____ clients in the last 12 months

Answer 2

12 clients

Question 3

Registration with the SEC is required for those who manage over _____ in assets or those IAs who advice to _______

Answer 3

$100m in AUM, or those who advise to investment companies

Question 4

An adviser with at least ____ in AUM who is NOT required to register in their state must register with the SEC

Answer 4

$25m

Question 5

An adviser with ____ in AUM and who does business in _____ or more states has the option to register with the SEC

Answer 5

$25m, 15 states or more

Question 6

Private fund advisers with more than _____ in AUM are required to register with the SEC (must have _____ or few investors)

Answer 6

$150m; 100 or fewer investors

Question 7

Private fund investors with under _______ must register with the state

Answer 7

$150m

Question 8

All _____ are included in determining AUM for “private fund adviser” status

Answer 8

assets (including commodities, direct real estate investments, callable loans, etc.)

Question 9

All of a “private adviser’s” clients must be _______

Answer 9

private funds

Question 10

Exempt private advisers still have to _______ to the SEC

Answer 10

report

Question 11

There is _____ registration for IARs under fed law

Answer 11

NO

Question 12

Form ADV Part 1 contains _______ information

Answer 12

general

Question 13

ADV Part 2 has more ______ information and part _____ is considered the “brochure”

Answer 13

more detailed information, part 2A is the brochure

Question 14

Under fed law, if an IA takes more than ______ in prepaid fees ____ months in advance, must include its ______ in its ADV

Answer 14

more than $1,200 6 months in advance must include its balance sheet

Question 15

Part 2B discloses information about _______ within the IA

Answer 15

individual people generating the investment advice

Question 16

SEC normally grants registration within ______ of filing form ADV

Answer 16

45 days

Question 17

In addition to filing form ADV parts 1 & 2, private fund advisers with more than $150m in AUM must file form ______

Answer 17

PF

Question 18

Anyone who has spent more than _____ in prison is denied registration

Answer 18

1 year

Question 19

For material changes, an amendment to form ADV must be filed ______ according to fed rules and ______ for NASAA rules

Answer 19

promptly for Fed rules and within 30 days for NASAA rules

Question 20

Annual year-end amendment must be filed (for Fed) within _____ of year end

Answer 20

90 days

Question 21

Form ADV-W (for withdrawal) is submitted if IA ceases operations and is effective _____ after submission for Fed and _____ for NASAA

Answer 21

60 days for Fed, 30 days for State

Question 22

Fed requires that you keep records of the signed _______ from each client

Answer 22

brochure

Question 23

Records must be maintained for _____ with first ____ in easily review-able place

Answer 23

5 years, first 2 years (same as state)

Question 24

Brochure must be delivered to clients _____ beginning an advisory relationship with the IA

Answer 24

at or before (counts for oral or written agreements)

Question 25

The brochure delivery rule for states is different than from the fed. T/F

Answer 25

True - state requires 2 days prior or alternatively customer can sign and has 5 days to rescind

Question 26

If there are material changes to the brochure, then is must be sent to each client within ______ of year end (does not apply to the supplement)

Answer 26

120 days

Question 27

If brochure is amended because of disciplinary actions, then must be delivered ______ to all clients

Answer 27

promptly

Question 28

Brochure delivery is not required if adviser is contracting to sell to _____, “impersonal advisory services” for less than _____, or clients who are officers or employees of the firm (or are otherwise related)

Answer 28

investment companies; less than $500

Question 29

If using a solicitor, then the IA must received a signed copy, no later than the time the agreement is entered into, of both the _____ and the ______

Answer 29

IA brochure and the brochure received from the solicitor

Question 30

If the IA has custody, then must send an itemized statement to the customer _____ from either the _____ or the ________

Answer 30

quarterly from either the IA or the custodian

Question 31

If an IA with custody sends the reports, then they must arrange for an _______ audit, file form ______ within ______ of the audit

Answer 31

annual audit, file form ADV-E within 120 days of the audit

Question 32

Principal transactions by advisers must be _____ and _____ must be obtained prior

Answer 32

disclosed and consent must be obtained prior from the customer

Question 33

For agency cross transactions made by advisers, only one of the parties may be ______

Answer 33

solicited

Question 34

For agency cross transactions, must send clients an annual _______ with how many cross transactions were affected and how much received in comp

Answer 34

disclosure

Question 35

A disclosure must be made to clients if an IA has ______ and has become financially impaired

Answer 35

has custody over client assets

Question 36

Appeals to a revoked registration by the SEC must be made within _____

Answer 36

60 days

Question 37

If a private placement does NOT include non-accredited investors, it can be _______

Answer 37

advertised

Question 38

The SEC commissioners are appointed by the ______. There are ______ of them and no more than _____ can come from the same political party

Answer 38

appointed by the president. there are 5 of them and no more than 3 can come from the same party

Question 39

Copies of all proxy materials must be filed with the SEC ______ before mailed to shareholders

Answer 39

10 days

Question 40

BDs must send financial disclosures to customers ______

Answer 40

semi-annually

Question 41

Securities information processors (such as bloomberg and reuters) must ______

Answer 41

register with the SEC

Question 42

Clearing and transfer agents must _______

Answer 42

register with the SEC

Question 43

If you buy over 5% of an issuer, must file form _____ within _____

Answer 43

form 13D within 10 days

Question 44

If 5% holding but intend to be passive investor, then file form _____ within ______ of year end

Answer 44

form 13G within 45 days of year end

Question 45

Institutional investment managers who manager over _____ must file form within ______ of each quarter end where AUM is above that limit

Answer 45

$100m, within 45 days of quarter end in which you meet that AUM threshold

Question 46

Any fund with over ______ investors must be registered

Answer 46

100

Question 47

Min fund capital is _____

Answer 47

$100k

Question 48

_____% of a funds board must be independent

Answer 48

40%

Question 49

Violations of the Investment Company Act of 1940 is punishable with fines up to _____ and _____ in jail

Answer 49

$10k and 5 years in jail

Question 50

For private placements, commissions can be received under _____ law but not ____ law

Answer 50

federal law but not state law

Question 51

An “affiliated” person to a fund cannot borrow money but can buy share of the fund. T/F

Answer 51

True - they cannot borrow money but they can buy shares

Question 52

Mutual funds must send their financial statements to investors ______

Answer 52

semi-annually