Disclosure Form ADV Part 1 - IACCP Q's Flashcards
- Which activity would be considered “continuous and regular supervisory or management”?
a. Scheduled quarterly rebalancing.
b. Recommending third-party managers to a client with the discretionary authority to hire and fire the managers.
c. Providing investment recommendations to a client with the client implementing the transaction.
d. Passively tracking an index and rebalancing at pre-determined periods.
Recommending third-party managers to a client with the discretionary authority to hire and fire the managers.
A firm is considered to have custody if which THREE criteria are TRUE: (Choose three):
a. The firm directly or indirectly holds client funds or securities.
b. The firm has signatory power over a client’s checking account.
c. The firm is “operationally independent” from its related person.
d. The firm has general power of attorney over a client’s account.
a. The firm directly or indirectly holds client funds or securities.
b. The firm has signatory power over a client’s checking account.
d. The firm has general power of attorney over a client’s account
An investment adviser, in determining whether a legal or disciplinary event is “material,” should consider which THREE factors (Choose three):
a. The severity of the sanction.
b. The time elapsed.
c. The individual’s education and experience.
d. The distance of the entity or individual from the advisory function.
a. The severity of the sanction.
b. The time elapsed.
d. The distance of the entity or individual from the advisory function.
A Form ADV Part 2B Brochure Supplement must be prepared and delivered for all supervised persons EXCEPT those who:
a. Formulate investment advice and have direct client contact.
b. Have discretionary authority as part of an investment team with no direct client contact.
c. Have discretionary authority over client assets and have direct client contact.
d. Have discretionary authority over client assets without direct client contact.
b. Have discretionary authority as part of an investment team with no direct client contact.
Which THREE Form ADV Part 2A “Brochure” delivery requirements are TRUE? (Choose three):
a. The Brochure must initially be delivered to new or prospective clients before or at the time they enter into an advisory agreement.
b. The Brochure or a summary of material changes must be delivered on an annual basis.
c. The Brochure, including a summary of any material changes, must be delivered to clients within 120 days of the adviser’s fiscal year end or an adviser may deliver a summary of material changes with an offer to provide a complete copy of the updated brochure upon request.
d. Advisers having no material change summary to deliver are required to deliver a brochure to their existing clients that year with a summary indicating that there were no material changes.
a. The Brochure must initially be delivered to new or prospective clients before or at the time they enter into an advisory agreement.
b. The Brochure or a summary of material changes must be delivered on an annual basis.
c. The Brochure, including a summary of any material changes, must be delivered to clients within 120 days of the adviser’s fiscal year end or an adviser may deliver a summary of material changes with an offer to provide a complete copy of the updated brochure upon request.
Which TWO Schedule 13D requirements are TRUE? (Choose two)
a. Schedule 13D must be filed within 45 days of the end of the calendar year in which the obligation arose.
b. Copies of Schedule 13D must be provided to each exchange where the security is traded as well as to the issuer.
c. Required amendments to Schedule 13D must be made “promptly.”
d. Required amendments to Schedule 13D must be made within 10 days.
b. Copies of Schedule 13D must be provided to each exchange where the security is traded as well as to the issuer.
c. Required amendments to Schedule 13D must be made “promptly.”
Which THREE Form 13H disclosures are TRUE? (Choose three)
a. Large traders are defined as persons whose transactions in exchange-listed securities equal or exceed two million shares or $200 million during any calendar day.
b. Market participants can voluntarily register as large traders even if they have not yet effected transactions equal to or greater than the identifying level of transactions.
c. A firm must file an initial form 13H within 10 days of first effecting aggregate transactions equal to or greater than the identifying activity level.
d. After filing an initial Form 13H, large traders must file Form 13H with the SEC within 45 days of the end of each calendar year.
b. Market participants can voluntarily register as large traders even if they have not yet effected transactions equal to or greater than the identifying level of transactions.
c. A firm must file an initial form 13H within 10 days of first effecting aggregate transactions equal to or greater than the identifying activity level.
d. After filing an initial Form 13H, large traders must file Form 13H with the SEC within 45 days of the end of each calendar year.
Which communication is LEAST likely to be considered an “advertisement” according to the SEC Marketing Rule ?
a. A book published by an investment adviser discussing its services, investment methods and performance.
b. A written response to a client who requested specific information about an unprofitable past recommendation.
c. An investment adviser’s website.
d. A radio announcement by an adviser offering a securities analyses.
b. A written response to a client who requested specific information about an unprofitable past recommendation.
Which TWO criteria must be met before an adviser can publish a client testimonial? (Choose two)
a. Adviser must state whether the testimonial was provided by a current client or investor.
b. Adviser must disclose the identity of the current client or investor.
c. Adviser must disclose material conflicts of interest on the part of the person giving the testimonial.
d. The person providing the testimonial must be registered as an Investment Adviser Representative.
a. Adviser must state whether the testimonial was provided by a current client or investor.
b. Adviser must disclose material conflicts of interest on the part of the person giving the testimonial.
Which advertisement would be in violation of the Marketing Rule?
a. Makes a statement that performance presented has been reviewed and approved by the Securities and Exchange Commission.
b. Discloses whether and to what extent the results portrayed reflect the reinvestment of dividends and other earnings.
c. Reflects the deduction of advisory fees, brokerage or other commissions and any other expenses a client would have paid or actually paid.
d. Provides a relevant index to aid performance comparison.
a. Makes a statement that performance presented has been reviewed and approved by the Securities and Exchange Commission.
All of the adviser’s responsibilities regarding private fund reporting in Schedule D are TRUE EXCEPT:
a. Advisers must report on private funds that are advised by affiliates.
b. Advisers sponsoring a master-feeder arrangement are permitted to submit one Schedule D for the master fund and all feeder funds.
c. Advisers with a principal office and place of business outside the U.S. can omit a Schedule D for a private fund that is not organized in the U.S., or offered to, or owned by U.S. persons.
d. Advisers must complete Section 7.B. of Schedule D for each private fund that it (and not a related person) advises
a. Advisers must report on private funds that are advised by affiliates
The CFA Institute’s Global Investment Performance Standards (GIPS®) requires an investment firm to follow which TWO guidelines to claim compliance? (Choose two)
a. Make available a full list of firm composites and make each composite performance available upon request.
b. Calculate composite returns by asset weighting the individual portfolio returns at least annually.
c. Calculate all returns after the deduction of the actual trading expenses incurred during the period.
d. Do not include cash and cash equivalents returns in total return calculations.
a. Make available a full list of firm composites and make each composite performance available upon request.
c. Calculate all returns after the deduction of the actual trading expenses incurred during the period.
Under the Marketing Rule, an advertisement that includes prior performance would not, in and of itself, be misleading if which THREE of the following conditions were satisfied? (Choose three)
a. The accounts managed at the predecessor investment adviser are sufficiently similar to the accounts managed at the advertising. investment adviser that the performance results would provide relevant information to clients or investor.
b. All accounts that were managed in a substantially similar manner are advertised unless the exclusion of any such account would not result in materially higher performance.
c. The advertisement does not contain references to the fact that the performance results were from accounts managed at another entity.
d. The person or persons who manage accounts at the successor adviser were also primarily responsible for achieving the prior performance results.
a. The accounts managed at the predecessor investment adviser are sufficiently similar to the accounts managed at the advertising investment adviser that the performance results would provide relevant information to clients or investor.
b. All accounts that were managed in a substantially similar manner are advertised unless the exclusion of any such account would not result in materially higher performance.
c. The person or persons who manage accounts at the successor adviser were also primarily responsible for achieving the prior performance results.
As a fiduciary, an investment adviser owes its clients all duties EXCEPT:
a. An affirmative duty of good faith.
b. An affirmative obligation to employ reasonable care to avoid misleading clients.
c. Full and fair disclosure of material facts.
d. A duty of integrity and res ipsa loquitur.
d. A duty of integrity and res ipsa loquitur.
Form ADV Part 2A does NOT need to be delivered to which THREE entities? (Choose three)
a. Business development companies.
b. Registered investment companies.
c. Person who receives impersonal advisory services costing less than $1200 per year.
d. Person who receives impersonal advisory services costing less than $500 per year.
a. Business development companies.
b. Registered investment companies.
d. Person who receives impersonal advisory services costing less than $500 per year.
