Chapter 1 Part 3

Question 1

Securities Act of ‘33

Answer 1

New issue regulation. First fed law covering securities industry, specifically regulation of primary market. Passed as reaction to ‘29 crash and prior to it, state law governed regulation

Question 2

In 1934, Congress passed the Securities Exchange Act of 1934. Among many items, the Act is responsible for

Answer 2

Created SEC, charged with regulation of domestic securities… (in primary and secondary market)

Power to enforce registration of certain fin pros

Gave FRB regulatory oversight over the extension of credit

Tune of Don’t Stop Believin’

Question 3

Investment Company Act of 1940 was passed to regulate

Answer 3

investment companies, mutual funds, and UITs.

inv companies were a new type of packaged product that invest $ it receives in a portfolio of securities, each investor owning an undivided interest in this pool of money which is professionally managed by an IA.

Question 4

As result of NSMIA, federal covered securities are no longer regulated by the state or required to register at the state level. Keep in mind, if the state does not require registration, it may not deny or revoke that registration. However, Administrators will want to know, admins can require

Answer 4

what is being offered or sold in their state.

states may require the issuer to file copies of the documents submitted to the SEC.

In certain cases, states may also require the issuer to pay a fee to the state. This process is called notice filing.

Question 5

The SEC is responsible for determining if the Advisers Act

Answer 5

or one of the rules promulgated under the Advisers Act has been violated, or is about to be violated.

Question 6

NSMIA was intended to

Answer 6

reduce duplication of state and fed securities regulation

created categories of federal covered securities and federal covered advisers

Question 7

NSMIA created federal covered securities include

Answer 7

securities listed on US exchanges

Reg D offerings (private placements)

Muni securities offered outside the state

Securities issued by investment companies

Question 8

NSMIA created federal covered advisers are such based on:

Answer 8

amount of AUM or type of client they service

regulate advisers at one level