Crunch Time : Chapter 4 Flashcards
How many credits of Regulatory and Ethics continuing education must IARs complete each year?
SIX credits
THREE of the six credits must specifically cover ethics.
What is required for IARs who are not dually registered with FINRA?
SIX credits of Products and Practices CE
This is an annual requirement.
Can additional IAR CE credits earned in one year be rolled over into the next year?
No
Any additional credits cannot be carried over.
What is considered investment advice in relation to newsletters?
Publishing newsletters on the best time to exercise options
This implies giving investment advice.
Who is required to register as an IAR?
A person serving on a committee that makes investment decisions for advisory customers
This is a regulatory requirement.
What is required of a person creating financial plans for a fee?
Register as an IA or IAR
This is necessary to comply with regulations.
Where must an IAR of a state-registered adviser register?
In all states where the IAR has a place of business or more than five non-institutional clients
This ensures compliance across multiple jurisdictions.
What does an adviser’s net worth not include?
Home, furnishings, or automobiles
Only business assets are considered.
What does Schedule A of Form ADV (ADV-A) list?
Direct owners and executives of the adviser
It is filed only during initial registration.
Who files Form ADV-E and when?
Filed by the auditor of an IA maintaining custody of client funds or securities; within 120 days of the audit
This is a regulatory requirement.
How often must state-registered investment advisers renew their registration?
Every year within 90 days of calendar year-end
This requires filing an updating amendment to Form ADV.
When must advisory clients receive a brochure according to the USA?
At least 48 hours before signing a contract OR at the time of signing
Clients can cancel without penalty within five days if provided at signing.
Is a brochure required for contracts with registered investment companies?
No
Also not required for impersonal advisory service costing less than $500 per year.
When must updates to an adviser’s brochure be sent to advisory clients?
At the IA’s year-end
This ensures clients have the latest information.
How do IARs register?
By filing Form U4
This is the standard registration form for IARs.
What does NASAA recommend for IAs regarding emails?
To encrypt emails containing personal identifying information
This is a recommendation, not a requirement.
For how long must IAs keep books and records?
Five years
This includes records of clients no longer doing business with the IA.
Who are considered supervised persons of an IA?
Officers, directors, partners, and employees providing investment advice
This includes all individuals involved in advisory activities.
