Question 1

What must be included in initial registration?

Accepted Answer

``` When initial registration is filed, it must include: 1). An Application for registration 2). Registration Fee 3). Consent to Service of Process 4). A Bond Ch 02(2) ```

Question 2

What is a Consent to Service of Process?

Accepted Answer

Allows the Administrator to be served with Legal Documents when the applicant is being sued. Serving the Administrator with legal documents would be as binding as serving the applicant directly. Ch 02(2)

Question 3

Who sets the Surety Bond amount (for B-Ds, Agents, and IAs with custody/discretionary authority over client funds or securities)?

Accepted Answer

Amount prescribed by the Administrator Administrator may require B-Ds, Agents, and IAs to post bonds if they have custody of or discretionary authority over client funds or securities. ``` The Administrator is limited to setting bonding requirements based on SEC requirements. Ch 02(2) ```

Question 4

Every application for registration must contain:

Accepted Answer

Memory Device: People Manage Quality Delivers / Faithful Intuition Appreciates 1) . applicant’s form and Place of business 2) . applicant’s proposed Method of doing business 3) . the Qualifications and business history of the applicant. 4) . Disclosure of any Injunction or administrative order or conviction of a misdemeanor involving securities or the securities business, or ANY conviction of a felony. 5). Financial condition and history 6). information to be given to clients — if the applicant is an investment advisor 7). the administrator may require an applicant to publish an announcement in one or more specific Newspapers published in the state. Ch 02(2)

Question 5

What is not required to be filed / disclosed on a firm's application for registration?

Accepted Answer

Salaries of officers and partners, as well as the names and SSNs of all employees of the firm DO NOT have to be disclosed on an Application for Registration. Salaries and fingerprints of officers, partners, and directors of the firm are NOT automatically required with a firm’s application. If these persons are acting as an agent, then fingerprints may be required when individuals are filing a U-4. But not at the time when the firm files an application for Registration. Ch 02(2)

Question 6

Disclosures of misdemeanors are required only if the misdemeanor involves

Accepted Answer

``` securities. Ch 02(2) ```

Question 7

When are felonies required to be disclosed on the Application for Registration?

Accepted Answer

``` Always. Any conviction of a felony, related to securities or not. Ch 02(2) ```

Question 8

When does a Registration become Effective?

Accepted Answer

1). Registration becomes effective when determined by the Administrator 2). If there is no denial order in effect, and no proceedings are pending, then registration will “automatically” become effectively at noon on the 30th day after the application is filed. 3). The Administrator may advance or delay that effective date. Ch 02(2)

Question 9

Can a B-D or IA that reorganizes in the middle of a registration period file for registration?

Accepted Answer

Yes. A B-D or IA that reorganizes in the middle of a registration period may file an application to register the successor firm for the unused portion of the year. May file an application to register the successor firm, whether the successor firm is in existence or not. They may still be putting together the reorganized firm. We can still file for the unused portion of the year for the NEW successor firm, even if it’s not yet completely all together. Note: Partners, officers, and directors of the successor firm would automatically be registered with the successor firm’s registration. Ch 02(2)

Question 10

What can the Administrator do with a B-D or IA's registration? With a registrant's (individual - IAR or Agent) registration?

Accepted Answer

``` The Administrator may Deny Suspend -or- Revoke ANY registration -or- Bar -or- Censure ANY registrant from employment with a registered B-D or IA, or restrict a registrant as to any activity of the business. Ch 02(2) ```

Question 11

What is the basis for an Administrator to deny or bar registration?

Accepted Answer

Memory Device: Fine Willing Convicts Forgive / Every Fraud Surrenders Virtue / Imagine Freedom Not Willful Failure if they deem it to be in the public’s interest -AND- that the applicant or registrant 1) . Filed a false application 2) . Willfully violated the Uniform Securities Act (USA) 3) . Convicted of securities misdemeanor (past 10 years) 4) . Felony Conviction. 5) . Enjoined by any court involving the securities or commodities business 6) . Fraudulent / excessive / dishonest acts or practices 7) . Subject of Administrator 8) . Violated FINRA Rules (10 years) -- violated any securities or commodities regulations within last 10 years. 9). Insolvent 10). Failed to supervise employees 11). Not qualified in securities 12). Willfully violated law of foreign jurisdiction (5 years) 13). Failed to pay filing fees. Ch 02(2)

Question 12

Registration Administration -- What is the difference between willful and non-willful violation of the Uniform Securities Act?

Accepted Answer

An accidental error or the actions of someone who is supervised, do not automatically constitute a willful violation for a registered individual. ``` E.g. My registration will not be revoked if my Registered Assistant's actions merit a willful act of violation. Ch 02(2) ```

Question 13

Registration Administration -- What does insolvent mean?

Accepted Answer

A B-D or IA that has become insolvent means its liabilities exceeds assets, and the person cannot meet their obligations as they come due. ``` The issue of solvency typically only applies to the actual firm, and NOT to the principals (the people or employees) of the firm. Ch 02(2) ```

Question 14

Registration Administration -- Would an Administrator have grounds to deny or revoke an application for registration of an IAR with prior declaration of bankruptcy?

Accepted Answer

the prior bankruptcy by itself is NOT grounds for denial of registration. ``` (Even though an Administrator can take a prior bankruptcy of an individual into consideration when they are reviewing an application for registration to become an IAR.) Ch 02(2) ```

Question 15

Registration Administration -- Would an Administrator have grounds to deny or revoke an application for registration of an IA Firm w/ Limited Partner with prior declaration of bankruptcy?

Accepted Answer

WOULD NOT be grounds for revocation of the firm’s registration. ``` (If an IA Firm is a Limited Partnership or corporation, and one of the limited partners or corporate shareholders becomes insolvent or declares bankruptcy, this would NOT affect the registration of the IA firm,.) Ch 02(2) ```

Ch 02(2) USA Registration Procedures Flashcards

Explain Registration Procedures for B-Ds & IAs.

Brainscape's Knowledge GenomeTM

Ch 02(2) USA Registration Procedures Flashcards

Explain Registration Procedures for B-Ds & IAs.

Brainscape's Knowledge Genome^TM