Chp1 Flashcards
An ______ sells its own securities in order to raise capital (i.e., obtain funds). They include corporations that sell stock and bonds, as well as government entities (e.g., the U.S. Treasury) that sell bonds to investors
Issuer
___ ______securities must be registered with the state Administrator before being sold in a state. On the other hand, __________securities are not required to be registered with the state Administrator. However, ________securities are still subject to the anti-fraud provisions of the Uniform Securities Act (USA). Exemptions are established in the USA and not defined by the state Administrator.
Non-exempt; Exempt; Exempt
True or False: Investment adviser representatives (IARs) either provide advice or solicit advisory services for an investment adviser (IA). In addition, IA employees that supervise other IARs are also defined as IARs. Executing transactions is an activity of a broker-dealer and its agents.
True
The ___________________ Act was created to eliminate the duplication of state and federal regulations.
National Securities Markets Improvement Act of 1996 (NSMIA)
A _________ is defined as any legal entity that’s not deceased, is not a minor, and is not mentally incompetent. Since minors are not considered persons, they’re not able to enter into legal contracts without a parent or legal guardian.
Person
Congress enacted _______________ to eliminate the duplication of state and federal regulation of securities and investment advisers. Specifically, it created two definitions - federal covered securities and federal covered advisers - which eliminated the need to simultaneously register with the SEC and state Administrator. Note that broker-dealers were not included and are generally required to register with both the SEC and state Administrator.
the National Securities Markets Improvement Act (NSMIA)
The ____________ established the Securities Exchange Commission (SEC), requires the registration of certain financial professionals, and governs the secondary market for securities in the United States.
Securities Exchange Act of 1934
The A-B-C Test has three parts for determining whether a firm meets the definition of an investment adviser. The three parts are (A) providing _________ about securities (B) providing these services as a __________ and (C) receiving __________ for these services.
Advice, Business and receiving Compensation
Federal covered investment advisers must register with the SEC under the___________________ . The Uniform Securities Act is a model law that’s used to create state laws. Advisers that are registered with the state(s) register under the provisions of the Uniform Securities Act.
Investment Advisers Act of 1940
The________________ established the Securities Exchange Commission (SEC), requires the registration of certain financial professionals, and governs the secondary market for securities in the United States.
Securities Exchange Act of 1934
An_______________ is a non-clerical individual who represents an issuer in effecting securities transactions that involve the issuer’s securities with the public.
agent of an issuer
The______________________ is responsible for writing and updating the Uniform Securities Act (USA). The SEC enforces federal securities laws, while FINRA is a self-regulatory organization (SRO) that regulates broker-dealers.
North American Securities Administrators Association (NASAA)
An_____________________ is any partner, officer, director, or other individual who’s associated with an investment adviser and makes recommendations or gives advice regarding securities.
Investment Adviser Representative (IAR)
An________________________ is a non-clerical individual who represents an issuer in effecting securities transactions with the public involving the issuer’s securities.
Agent of an issuer
______________________ either provide advice or solicit advisory services for an investment adviser (IA). In addition, IA employees that supervise other IARs are also defined as IARs. Executing transactions is an activity of a broker-dealer and its agents.
Investment adviser representatives (IARs)
An__________________ effects securities transactions on behalf of a broker-dealer. Investment advisor representatives (IARs) provide investment advice or solicit advisory services.
agent of a broker-dealer
By buying and selling securities for the accounts of customers and charging commissions the broker is acting in an ___________.
Agency Capacity
A_______ ________ is any person engaged in the business of effecting transactions in securities for the accounts of others or for the firm’s own account.
Broker-Dealer
By buying and selling securities for or from the firm’s own inventory and charging a mark-up or a mark-down they are considered to be acting in a ________.
Principal Capacity
The term Broker-Dealer does not include the following persons:
Agents, Issuers, Banks, Savings Institutions, and Trust Companies
True or False: A firm with a place of business in state A that only effects transactions in securities for financial institutions in state A would be defined as a broker-dealer under the USA.
True
True or False: A firm with no place of business in state B that only effects transactions in securities for financial institutions in state B would be excluded from the definition of a broker-dealer under the USA.
True
An ________ is any individual who represents a broker-dealer or an issuer in effecting or attempting to effect purchases or sales of securities.
Agent
True or False: An individual that represents an issuer in the sale of an interest in a limited partnership is not an agent and does not need to be registered as such?
False. An individual who represents an issuer in the sale of an interest in a limited partnership is considered an agent and must be registered as such. This is because they are involved in effecting transactions in securities, which requires registration to ensure compliance with securities laws and to protect investors.