Ch 1 Laws & Regs Overview Flashcards

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1
Q

Exempt security

A

Does not have to be registered to be sold

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2
Q

Who governs federal registration? What about state?

A

SEC for federal
USA for state

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3
Q

Who is a person?

A

Can be an organization too
Cannot be a minor, deceased, or mentally incompetent

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4
Q

Agent acting as broker vs dealer

A

Broker: securities transactions on behalf of clients; agent excludes principals

Dealer: securities transactions on own account

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5
Q

Market maker

A

Dealer providing liquidity by publishing quotes in the Nasdaq marketplace

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6
Q

Investment advisor can investment advisor representative

A

IA: usually a firm; ABC (advice, business, compensation)

IAR: partner, officer, etc individual associated with IA who gives advice, determines advice, manages client portfolios, solicits services, supervises employees who for his

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7
Q

USA

A

Uniform Securities Act aka “Blue sky laws”
Model law for states to use, not a law itself

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8
Q

Role of administrator

A

State securities regulator who administers and enforced securities laws and educates investors

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9
Q

NASAA

A

North American securities administrators association

Updates USA and maintains 65 exam

Comprised of state administrators (+ Canada, Mexico and US territories)

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10
Q

Securities acts of 1933

A

Regulation of new issues
Requires certain securities be registered with SEC to be sold

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11
Q

Securities exchange act of 1934

A

Established the SEC
Regulation of secondary market

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12
Q

Investment advisors act of 1940

A

Regulation of investment advisors

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13
Q

Investment company act of 1940

A

Regulation of mutual funds and other investment companies

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14
Q

National securities markets improvement act of 1996

A

Purpose was to eliminate duplication of state and federal regulation for securities and advisors

Created category of securities that are exempt from state registration called Federal Covered Securities

Includes securities listed on US exchanges, certain Regulation D offerings (private placements), municipal securities issued outside the state, securities issued by registered investment companies (e.g. mutual funds)

Created category of investment advisors called Federal Covered Advisors based on AUM or services

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15
Q

Notice filing

A

For federal covered securities

Even though exempt from state registration, states may require issuer to file copies of SEC documentation with the state or pay a fee

Will be required for issuers of investment company shares and private placements under Regulation D

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16
Q

Dodd frank act

A

Passed as a response to 2008 recession

Made most significant changes to financial regulation since the regulation that followed the Great Depression