Advertising etc

Question 1

How long must advertising be retained for?

Answer 1

IAs: FIVE years

Fines rules for BDs: Three years after last used

Question 2

What’s approval requirement prior to use?

Answer 2

All advertising and written sales material approved by principal in advance.
All written seminar principals and guests plus advertising notices for seminar itself approved in advance.

Question 3

What’s requirement on correspondence?

Answer 3

Must be monitored with a way of detecting complaints.

Question 4

Basic approach on social media?

Answer 4

1. Well structured policies and procedures
2. A way of supervising and retaining
3. Principal approval of sites in advance (based on allowing personnel to comply with requirements)

Question 5

Seven social media elements in compliance programme?

Answer 5

1. Usage guidelines
2. Content guidelines
3. Monitoring
4. Approval of content
5. Training
6. Personal and professional / 3rd party sites
7. Information security

Question 6

What does Investment Advisors Act of 1940 say about testimonials?

Answer 6

Bans their use

Question 7

Rules on testimonials in context of social media?

Answer 7

1. IAs may not encourage endorsement on their own social media pages
2. May publicise reviews on independent sites provided they have zero control
3. Never promise free/discounted services for offering a review and warn own personnel not to post

Question 8

When can IA refer to reviews?

Answer 8

In an ad can point to a site but never quote a testimonial.
Can sort reviews they receive in a neutral fashion and allow users to sort in any way.
Can quote composite score from independent site as long as rating system not designed to elicit positives

Question 9

Requirements on an IA using social about performance information…

Answer 9

May not cherry pick

Must generally include all recommendations is last year, profitable or not.

Question 10

Information security policy must include…

Answer 10

Employee training

Question 11

Considerations in using outside security experts?

Answer 11

Perform proper due diligence and establish confidentiality agreements.

Question 12

Factors in cyber security risk assessment - list 4

Answer 12

1. Existence of written policies and training programmes
2. Does firm maintain insurance?
3. Has it experienced an incident resulting in theft, loss, exposure, use or access?
4. Does it use safeguards like encryption, antivirus and anti-malware?

Question 13

Difference between entanglement and adoption?

Answer 13

Entanglement means involved in creation.

Adoption means endorsing and/or spreading.