Bl 66 Flashcards
Non person
Dead stupid
Teenager
Deceased
Incompetent
Minor
Broker/dealer
Person engaging in securities transactions for the benefits of others or themselves
Others broker
Themselves dealer(from own inventory)
Must register as broker dealer if
If you have physical location like office or you have client who is resident in that state
Can be any kind of client and any number of clients
Not required to register if you
Have no physical office
No clients that reside in that state.
If they are institutions or issuers(not general public)
What is an agent(RR)
They accept or place orders for securities transactions
agent must register when
accepting or placing orders for securities transactions
company’s who accept or place orders for securities transactions are non exempt issuer
agent doesn’t need to register when
sales assistants or interns. They need to register if they accept or place orders for securities transactions
with exempt issuer- bank, muni, gov, non profit, religious, etc
Investment adviser definition
in the business of providing investment advice
holds themselves out to the public as investment advisor
receives economic benefit for that advice.
MUST LATCH ON TO IN THE BUSINESS. it is a FIRM.
considered a FIDUCIARY
are BDs under fiduciary obligation
no
agents are not
banks are not
individuals who work for IA are not
Excluded from definition of IA
LATE
lawyers
accountants
teachers
engineers
if its cpa provides investment advice for fee he must register
finance professor gives investment seminars on weekend for fee. must register
national securities markets improvement act of 96
Separate advisers into 2 categories
FED l State
here is fed
If IA manages client assets in excess of 110 mill they then only register with the feds, but still must pay filing feels with state.
States may also enforce anti fraud.
what authority does state administrator have over a fed covered adviser
anti fraud
what defines state registered IA under ISMIA 96
those advisors managing less than 100 million in assets under management
Fed covered Advisor
must register with SEC only if manage over 110 mill under management
investment advisers of mutual fund companys
not register if private advisor
manages venture capital fund
foreign adviser
state registered advisors and registration
must register if they have office in the state or clients who are residents of that state.
dont need to register if dont have an office
no more than 5 clients (deminimus exemption)
investment adviser representative
and registration
natural living person.
Do we work for fed covered adviser or state covered adivsor?
fed covered ADV
must register with state administrator
must register where home office is or any state where you maintain an office.
not required to register if you have no office
state IAR
must register if have an office in state or clients who are residents in that state unless you have no more than 5 clients.
no register if you have no more than 5 clients
no office
agents and IARS registration procedures
applications
fingerprints
felony CONVICTION over past 10 years will disqualify
securities midemeanors disqualify
must sign consent to service of process must pay filing fees must pay test registration becomes effective on noon on the 30th day administrator must clear
registration expires every dec 31. ***
B/Ds and IAS registration procedures
net capital requirements
IA’S NCR is 10k or 35k
if IA physically holds possession of customer assets, then they have higher financial requirements
NCR must be for home state
B/Ds ncr no more than what SEC requires
may be required to post serety bond(ether cash or securites can replace this)
a successor firm(one firm buys another) must refile application. do not pay a filing fee.
have post registration requirements- books and records
ias 5/2, bds is 3/2 . required to be readily accessible
advertising always has to be filed with home state
cloud service
firms must have written supervisory procedures in place to handle data storage and cyber security.
what if an IA falls below minimum net capital
must notify the administrator within one day and then submit a plan 1 day from notification for how they plan to fix this problem.
investment adv act 1940
federal
Registration of federally covered advisers with form adv
name goes on adv, education, criminal background, affiliations
net capital requirement for fed covered advisers is nothing
rigistration effective 45 days
withdraw is 60
all advisors have brochure rule(form adv part 2)
State advisors at least 48 hours prior to contact or customer gets auto 5 day free look period**
resend- if there are material changes or if customer requests them
fed brochure rule. at or before to contract
must resend annually within 120 days of fiscal year end
advisor contract- no assignment(involved with verger and application) no assingment without written client consent)***
everything is 30 for . who is 45
states
fed covered advisors
what is not a security
fixed insurance
commodities
futures contracts
coordination
becomes effective when
if there is fed registration requirement then you do coordination
coordinates state with fed
becomes effective when cleared by SEC
instrate offering uses coordination or qualification
cleared by who
qualification
administrator
only 2 methods for registration
coordination and qualification
