General Principles Ch 9 Flashcards
a financial firm that advises clients on securities investments and may manage their investment portfolios; are registered with either the U.S. Securities and Exchange Commission (SEC) or state securities administrators.
Registered Investment Advisor (RIA)
The Securities and Exchange Commission (SEC) regulates investment advisors in the activities under the _________.
Investment Advisors Act of 1940
A _______ contract was never valid. It is not enforceable because it lacks one of the requirements for being an enforceable contract.
Void
A _________ contract is where one party has the option of terminating the contract of desired while the other party is bound by the contract.
Voidable
When one of the parties to a contract because of age, illness, or inebriation, the contract is _____ but may be _______ by the incompetent party.
Valid / voided
The Investment Advisors Act (IAA) provides a three-pronged definition for determining who is an investment advisor:
A person who provides __________ or issues reports or analysis regarding securities
A person who is in the _________ of providing such services
A person who provides such services for _________
ABC
Advice / Business / Compensation
The most frequently tested exceptions to filing as an investment advisor
BLAT
Bank
Lawyer
Accountant
Teacher
An investment advisor ceases operations by filing form ________
ADV-W
__________________ must describe the nature of the RIA’s business structure and relationships, along with information about fees, services, conflicts of interest, methods of analysis and investment strategies, risk of loss, brokerage practices, and other significant matters such as disciplinary conditions.
Form ADV Part 2
_____________ require the RIA to identify whether any related persons are portfolio managers and what, if any, conflicts of interest are present.
Wrap Brochure Rules
_________ requires an RIA whose brochure has materially changed since the last annual updating to deliver to each of its clients a Material Change Summary with 120 days after the end of the fiscal year.
The Final Rule
The Final Rule obligates the RIA to deliver a current brochure to any client ___________________ the RIA enters into the advisory agreement with the client.
FINRA must be notified in writing promptly if the firm itself or any REGISTERED employee is involved in the following:
Has violated any provision of ____________ law
Is subject to a written customer complaint alleging __________________.
Is named as a defendant or respondent in any legal proceeding alleging violations of the _____________ brought by a regulatory authority.
Is indicted, convicted, or pleads guilty to any ______________.
securities
theft, misappropriation of funds, or forgery
Securities Act
criminal offense
