Chapter 5 Part 5

Question 1

An adviser excluded from the definition

Answer 1

would never be required to register

Question 2

an adviser who is exempt from registration

Answer 2

would customarily be required to register if it were not for the exemption

Question 3

There are two situations in which a person who meets the definition of an investment adviser under the USA will be considered exempt from registration. The first exemption is

Answer 3

The adviser has no place of business in the state and the adviser’s only clients are institutional investors AND The adviser has no place of business in the state, and the adviser does not direct communications to more than five noninstitutional clients in the state within 12 consecutive months. this is considered the de mininis exception for investment advisers

Question 4

Institutional investors include

Answer 4

investment companies, other investment advisers, bds, banks, trust companies, savings and loan associations, insurance companies, employee benefits plans with at least $1,000,000 of assets, government entities, or other institutional investors

Question 5

There is no de minimis exemption for

Answer 5

“broker–Oealers. If a broker–Oealer
has no office in a state, but intends to do business with noninstitutional (retail) clients in that state, it must be registered regardless of the number of clients”

Question 6

an investment adviser representative (iAR) is a

Answer 6

nonclerical employee of an investment adviser who manages accounts, provides advice to clients, solicits advisory services, or supervises all employees who perform these functions

Question 7

The registration of an investment adviser constitutes the automatic registration of

Answer 7

a partner, officer, or director as an investment adviser representative if they were with the firm at the time of the firm’s initial registration

Question 8

A representative’s registration is effective only during the time the individual is

Answer 8

employed by a registered investment adviser.

Question 9

When the representative’s association with the investment adviser begins or ends, the Administrator must be

Answer 9

notified by the investment adviser

Question 10

In order to register with a state, an investrnent adviser representative must

Answer 10

File an application, File a Consent to Service of Process, Pay a filing fee

Question 11

An iAR will be required to complete Form

Answer 11

U4, which is filed by the investment adviser through the iARD system. Upon separation or termination, the IA will file Form U5 and notify the state Administrator

Question 12

the iar applicants may also need to pass

Answer 12

an oral or written examination. However, simply passing an examination is not sufficient for registration. Applicants may not transact business in a state until all required items are filed and registration is granted by the Administrator

Question 13

If the Administrator finds it appropriate, the examination may be

Answer 13

waived for certain categories of persons.

Question 14

lnvestment adviser representatives of state-registered investment advisers are exempt from registration in any state where

Answer 14

They have no place of business, and They do not direct solicitations to more than five noninstitutional clients who are residents of the state within 12 consecutive months

Question 15

The previous exemption is known as the de minimis exemption

Answer 15

iAs and IARs are afforded the same exemptions