101-7 Regulatory Requirements & Financial Institutions

Question 1

Investment Advisers Act of 1940

Answer 1

Requires persons who fall within the definition of investment adviser to register with the SEC or with the states in which they do business

Question 2

Investment Adviser

Answer 2

A-B-C

Providing ADVICE or issuing reports or analysis regarding securities

Being in the BUSINESS of providing such services

Being COMPENSATED for such services

Question 3

Securities Act of 1933

Answer 3

Requires registration of new issues

Also specifies which issues are exempt

Question 4

Prospectus

Answer 4

Legal document created as part of the security registration process per the Securities Act of 1933

Question 5

Securities Act of 1934

Answer 5

Aka Exchange Act, 34 Act, or People Act

Extended regulation to the secondary market or exchanges
Also established the SEC as the primary regulatory body overseeing the sale and purchase of securities by a potential investor

Question 6

Maloney Act of 1938

Answer 6

Brought the OTC market under the regulation of the SEC and called for self-regulation of OTC securities dealers

Question 7

Federal Bankruptcy Act of 1938

Answer 7

Requires a court-appointed trustee to oversee the affairs of a firm for which bankruptcy charges have been filed

Question 8

Investment Company Act of 1940

Answer 8

Authorized the SEC to regulate certain financial products, most notably open-end investment companies or mutual funds

Question 9

McCarron Ferguson Act of 1975

Answer 9

Federal legislation that made it clear that insurance was to be regulated at the state level, as long as the states implemented and executed this regulation adequately

Question 10

Securities Investor Protection Act of 1970

Answer 10

Established the Securities Investor Protection Corporation (SIPC) to insure investors against losses arising from the failure of any brokerage firm

Question 11

Insider Trading and Securities Fraud Enforcement Act of 1988

Answer 11

Specified what constitutes the insider trading of securities and stiffened the penalties for engaging in such trading

Material, nonpublic information

Question 12

Financial Industry Regulatory Authority (FINRA)

Answer 12

Self-regulatory organization (SRO)

Any planner or broker-dealer who wishes to sell securities must register with FINRA

Question 13

Series 6

Answer 13

Can sell mutual funds, variable annuities, variable life insurance, and initially-offered (not secondary) unit investment trusts

Question 14

Series 7

Answer 14

Can sell any security

Question 15

Series 24

Answer 15

General securities principal

Question 16

Series 63

Answer 16

Uniform State Securities Agent State Law Exam

Question 17

Series 65

Answer 17

The Uniform Investment Adviser Exam

Question 18

Series 66

Answer 18

Combines the Series 63 license requirements with the Series 65 license requirements

Question 19

Credit Union

Answer 19

Deposits are insured by the National Credit Union Share Insurance Fund (NCUSIF) up to 250k per qualifying account

Question 20

FDIC Insurance

Answer 20

Each category of ownership (e.g. individual, joint, or retirement account) in the same institution is subject to a separate limit of $250,000

Question 21

Federal Reserve primary purpose

Answer 21

Controlling the flow of capital to maintain steady economic growth with moderate inflation