Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Series 66 > Federal vs State Law > Flashcards

Federal vs State Law Flashcards

You may prefer our related Brainscape-certified flashcards:
Series 66 flashcards
1
Q

Federal investment adviser

A

Any person who for compensation engages in the business of advising others as to the value of securities or the advisability of investing in securities or, as part of a regular business, issues analyses or reports concerning securities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Exclusions from the definition of a federal investment advisor

A
  1. Banks
  2. Lawyers, accountants, teachers, engineers
  3. Broker- dealers
  4. Publisher of any bona dude newspaper, news magazine, or other publication of general circulation
  5. Any person whose advice relates solely to securities issued or guaranteed by the u.s. government
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Exemptions from the definitions of federal investment advisers

A
  1. The private fund adviser exemption is available for advisers with less than 150$ million in assets under management for private equity funds
  2. The only clients are insurance companies
  3. Intrastate business only and does not furnish advice with respect to securities listen in any national securities exchange, and do not have any private funds as clients
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Registration of federal investment advisers

A

File form ADV w/ SEC and pay initial and renewal fees based on their fiscal year.
Effective within 45 days
No net worth requirements
No Surety bonds
Withdrawal of registration is on 60th day
Successor firm pays fee
No registration of IAR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Record keeping of federal investment advisers

A

Kept readily accessible for 5 years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Fines of federal Investment advisers

A

10,000 and five years in jail

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Custody of federal investment advisers

A

Kept by a qualified custodian
An audited balance sheet is required if advisers takes advance fees of more than 1200, six months or more in advance, but not when the adviser maintains custody

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Performance fees of federal investment advisors

A

Prohibited unless:

  1. Contract with investment company
  2. Certain clients with Atleast 1 million under management or a net worth in excess of 2.1 million
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Statue of limitations for civil action of fed IA

A

Sooner of 3 years after the sale or 1 year after discovery

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Definition of a person via federal IA

A

Natural person or company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Advertisement requirements of federal IA

A

No filing with SEC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Private placement exempt of federal IA

A

Sold to up to 35 non accredited investors under rule 506(b)

Exclusively accredited investors under rule 506 (c)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Federal - miscellaneous

A

No assignment of the advisory contract may be made without clients consent (same for state)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Federal - miscellaneous

A

Adviser if a partnership, must notify the client of any change in the membership of the partnership within a reasonable period of time (same for state)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Federal - miscellaneous

A

Term investment counsel may not be used unless:

  1. Principal business is investment advice
  2. Substantial portion of their service is providing investment supervisory services
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Federal - miscellaneous

A

Insolvency is NOT a cause for revocation

17
Q

Federal - miscellaneous

A

$110 million or more under management registers with SEC

100$-110$ million can register with SEC or state

18
Q

Federal - miscellaneous

A

Register renewal for IAs within 90 days of fiscal year

19
Q

Federal - miscellaneous

A

Register as an IAR only if a place of business; no de minimis

20
Q

Federal - miscellaneous

A

Employee benefit plans 5$ million -institution

21
Q

State investment adviser

A

Any person who for compensation engages in the business of advising others as to the value of securities or the advisability of investing in securities or, as part of a regular business, issues analyses or reports concerning securities

22
Q

State exclusions from above definition

A
  1. Banks
  2. L A T E
  3. Broker dealers
  4. Publisher of any bona fide newspapers, new magazine, newsletter, or other publication that does not consist of rendering of advice on the basis of the specific investment situation of each client
  5. IARs
23
Q

Exemption from definition of state investment advisers

A
  1. Private fund adviser exemption more restrictive than federal law
  2. Adviser has no place of business within that state and
    A. The only clients are institutions such as investment companies, banks & trust companies, insurance companies, broker dealers and other investment advisers, 1$ million or larger employee benefit plans, governmental agency or instrumentalities or
    B. Does not direct communications to more than 5 clients in the state during the previous 12 months
24
Q

State IA registration

A

File form ADV w/ the administrator and pay initial and renewal fees. Effective at noon of 30th day
Net worth / surety bonds required (custody or discretion)
Withdrawal of registration is on 30th day successors firm pays no fee until renewal
Registration automatically registers any adviser representative who is a partner, officer, director or similar in status

25
Q

State IA record keeping

A

Generally three years for broker - dealers and five years for IAs

26
Q

State IA fines/penalties

A

5000$ and three years in jail

27
Q

State investment advisor - custody of customer funds/securities

A

If not prohibited in the state
Requires minimum net worth or surety bond of 35,000$
Audited balance sheet would be required if adviser takes fees of more than 500$ six or more months in advance or the adviser maintains custody

28
Q

State investment adviser performance fees

A

Must make risk incentive statement and other disclosures
Prohibited unless:
1. Contract with investment company
2. Certain clients with Atleast 1$ million under management or net worth in excess of 2.1$ million

29
Q

Statue of limitations for civil action of state investment adviser

A

Dinner of three years after the sale or two years after discovery

30
Q

Person under state IA

A

An individual, a corporation, an association, a joint stock company a trust where the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government or a political subdivision of a government

31
Q

Filing of advertisements for state investment advisers

A

No filing for exempt securities or transactions, otherwise filed with the administrator

32
Q

Private placement exemption for State exemption

A

Up to 10 offers within the state over a 12-month period .
Term accredited investor is meaningless
Institutions are not counted nor restricted

33
Q

State adviser - miscellaneous

A

An investment adviser representative is an associated person of an advisor firm (not clerical) who:

  1. Makes recommendations or otherwise gives advice
  2. Manages accounts of clients
  3. Solicits or negotiates for the sale of advisory service
  4. Supervises any of above
34
Q

State adviser - miscellaneous

A

Insolvency is a cause for revocation

35
Q

State adviser - miscellaneous

A

Registration renewal for all securities professions is on December 31

36
Q

State adviser - miscellaneous

A

Register in the state of retail clients resident in the state: subject to five or fewer de minimis

37
Q

State adviser - miscellaneous

A

Employee benefit plans 1$ million - institution

Series 66 (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions