Ch. 1 Flashcards
Identify who is considered a person under the USA.
Business entities, issuers, estates, governments, individuals (e.g., clients, IARs and agents)
A securities firm that executes trades for its own account or the accounts of others is deemed a _______.
Broker Dealer
T/F: The Uniform Securities Act is exactly the same law in every state.
F; the USA is a model law, not the actual law of any state
Identify the acronym: NASAA
North American Securities Administrators Association
What is the three pronged test for determining whether a firm meets the IA definition?
ABC
A= advice/analyses
B= business
C= compensation
T/F: States may make rules that are more restrictive than SEC (federal) rules.
F; NSMIA prohibits states from making laws that are more restrictive than existing federal requirements
Identify who IS NOT considered a person under the USA.
Minors, incompetents, securities, and the deceased are NOT considered persons.
T/F: Puerto Rico is a member of NASAA
T
Who is the official that monitors and administers a states securities laws?
The Administrator or Commissioner
Identify the acronym: NSMIA
National Securities Markets Improvement Act
When acting in a __________ capacity, a firm is assuming risk.
Principal
Identify the acronyms IA
Investment Advisor
T/F: The US Virgin Islands are a member of NASAA
T
What is the ABC Test for investment advisors?
The test that defines an IA as a firm that provides Advice as a part of a Business for Compensation
Who enforces the Uniform Securities Act?
The Administrator
How is a firm acting if it is trading for, or from, it’s own inventory?
As a principal/dealer
T/F: Blue Sky Laws apply to broker dealers and agents operating within a state.
T
What are the three components that must be met for a firm to be defined as an IA?
- Provide advice regarding securities
- Do so as a business
- Receive specific compensation (the ABC test)
Under the provisions of the USA, how is the institutional investor designation made?
Under the USA, an institutional investor is any person designated by rule or order of the Administrator
How is a firm acting if it effects trades on behalf of its customers, without taking the other side of the trade?
Agent or broker
What is the general definition of an investment banker?
A firm that provides advice/analyses regarding securities, as a part of a business, and for compensation
T/F: The District of Columbia is a member of NASAA.
T
What rules govern the registration of an issue in any state in which it will be offered?
Blue Sky Laws
When acting in an ________ capacity, firms assist customers, but do not assumed risk.
Agency
T/F: A firm producing investment research for BDs to deliver to its clients is considered an IA under the USA.
T; since advice is being provided, as a business, and compensation is received, the ABC test is met
List the entities that make up NASAA
All 50 states, the US Virgin Islands, Puerto Rico, Washington DC, Canada and Mexico
What is a principal trade?
A trade involving a firm ( BD or IA) buying or selling securities for its own account at its own risk.
According to the USA, who is included under the term “person”?
Any legal entity, including individuals (clients/agents/IARs), BDs, issuers, corporations and partnerships
The _______ ________ ___________ __________ is an organization consisting of state Administrators.
North American Securities Administrators Association
According to the USA, who is included under the term person?
Any legal entity, including individuals (clients/agents/IARs), BDs, IAs, issuers, corporations, and partnerships.
What is the general definition of an issuer?
Any person who issues or proposes to issue a security, such as government entities and corporations.
Identify two significant creations that are credited to the National Securities Markets Improvement Act (NSMIA).
Federal Covered Advisers and Federal Covered Securities
Identify the acronym: USA
Uniform Securities Act
