Chapter 1 Part 2

Question 1

An agent of a bd is defined as

Answer 1

a nonclerical individual who represents a broker-dealer in effecting securities transactions.

Question 2

Without exception, salespersons of broker-dealers effecting securities transactions are considered

Answer 2

agents and 1nust be registered.

Question 3

However, not every employee of a broker-dealer is considered an agent and subject to registration. An individual \vho provides

Answer 3

only inforrnation relating to prices and sales of securities or performs clerical tasks, such as filing paperwork or answering the phone, is not considered an agent.

Question 4

An agent of an issuer is

Answer 4

a nonclerical individual who represents an issuer in effecting securities transactions in the issuer’s securities with the public.

Question 5

An investment adviser {IA) is

Answer 5

any person {usually a firm, rather than an individual) who, for compensation, engages in the business of advising others as to the value of securities or the advisability of purchasing or selling securities.

Question 6

The advice may be given

Answer 6

directly, or through publications or writings.

Question 7

To meet the definition of an investment adviser, a person must satisfy all

Answer 7

1. Providing Advice about securities 2. Providing these services as a Business 3. Receiving Compensation for these services

Question 8

An investment adviser representative {IAR) is any pmtner, officer, director, or other individual associated with an investment adviser who:

Answer 8

• Makes recommendations or gives advice regarding securities • Manages accounts or portfolios of clients • Determines which recommendations or what advice should be given • Solicits, offers, or negotiates the sale of investment advisory services • Supervises employees who perform any of these functions

Question 9

Investment advisers and investment adviser representatives are also referred to as

Answer 9

registered investment advisers (RIAs) and registered investment adviser representatives (RIARs).

Question 10

State securities rules and regulations are governed by

Answer 10

the Uniform Securities Act (Blue-Sky Laws).

Question 11

The USA is a

Answer 11

model law, which means that il is nol the actual law of any one state, but rather a blueprint or template that each stale may customize to suit its own needs.

Question 12

While the securities laws of most slates are based on the Uniform Securities Act released in

Answer 12

1956

Question 13

The stale securities regulator, more commonly known as the state

Answer 13

Administrator, is the person responsible for administering and enforcing the securities laws in a state as well as educating investors.

Question 14

The fundamental miission of a state securities regulator is to

Answer 14

protect the consumers who purchase securities or pay for investment advice within the state.

Question 15

In some states, a special official, such as the

Answer 15

Securities Comissioner, may carry out the Administrator’s duties, while in other states these Functions may Fall under a more comprehensive office such as the Secretary of State.

Question 16

NASAA has been given the responsibility of

Answer 16

updating the Uniform Securities Act as well as maintaining the content of the Series 65 Examination.

Question 17

Organized in 1919, NASAA is the

Answer 17

oldest international organization devoted to investor protection.

Question 18

NASAA’s current membership is comprised of

Answer 18

67 state, provincial, and territorial securities Administrators in the 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico, Canada, and Mexico.

Question 19

Additionally, NASAA has released

Answer 19

a number of Model Rules and Statements of Policy that clarify various provisions of the USA.

Question 20

As with the USA, these Model Rules and Statements of Policy are

Answer 20

not the actual law of any one state, although many of the states have chosen to adopt at least some of them.