Broad Definitions

Question 1

Uniform Securities Act (USA)

Answer 1

Model law - not actual law of any state

Question 2

North American Securities Administrators Association (NASAA)

Answer 2

• Responsible for UPDATING USA policy through NASAA Model Rules and statements of policy
• Aka current regulator

Question 3

National Securities Markets Improvement Act (NSMIA)

Answer 3

• Reduced duplication of fed and state regulation
• Defined Federal Covered Advisers and Federal Covered Securities that are now exempt from state reg
• an attempt to reduce cost of regulation (paperwork)
• entities most affected: inv. advisers

Question 4

Federal Covered

Answer 4

• entity regulated by the SEC, so state admin says if it’s good with them, it’s good with us
• may ask for copies of filings, etc and may get filing fee income

Question 5

B/D

Answer 5

-a PERSON in the business of effecting securities transactions for the accounts of others or for its own account (agency vs. principal capacity)

Question 6

B/D Agent

Answer 6

• an individual who reps a B/D in effecting securities transactions is always an agent and subject to registration
• included: officers, partners or directors of a B/D who are involved w sale of securities
• excluded: those whose jobs are clerical

Question 7

Issuer

Answer 7

Any person (muni, corp, US gov) that issues to propose to issue any security with the purpose of raising capital
(any sale by an issuer is an issuer transaction)

Question 8

Agent of an Issuer

Answer 8

-An individual who reps an issuer in the sale of securities is ONLY an agent and subject to registration IF:
-The securities are NOT exempt and it is not an exempt transaction
AND
-Compensation (outside of regular comp) is received for effecting the sale

If an issuer is exempt, the agent is exempt

Question 9

Investment Adviser

Answer 9

Any person who meets the ABC test
ADVICE: Provides advice about securities, including asset allocation
BUSINESS: As a regular business
COMPENSATION: receives compensation for advice

Question 10

IA Rep (IAR)

Answer 10

Any individual who:

• Provides or determines investment advice
• Manages accounts
• Solicits advisory services (doesn’t even have to work for the firm)
• Manages those who perform these functions