Investors Act of 1940 Flashcards
Private Fund Advisers must register with the SEC if their assets under management are at least:
$150 Million
An investment adviser is a private fund adviser that is not required to register with the SEC. In order to maintain its exempt adviser status, it can only solicit investors who are:
Qualified
What defines a “qualified investor/purchaser”
An individual or trust with at least $5 million of assets available for investment; or an investment manager or company with at least $25 million of assets available for investment
What defines an accredited investor?
An individual with $200,000 of annual income; (MFJ $300,000) and individual with a net worth of $1,000,000; or an investment manager with at least $5,000,000 of assets available for investment
Under the Investment Advisers Act of 1940, which person managing assets of at least $100,000,000 is excluded from registering with the SEC?
A person who gives advice solely about U.S. Government securities
An investment adviser providing advice solely about municipal securities is subject to what registrations?
An investment adviser who provides advice solely about municipal securities is subject to either Federal or State registration
Licensing of investment adviser representatives occurs at what level?
The state level. Note that the SEC registers the investment adviser only - it does not register investment adviser representatives.
Under the Investment Advisers Act of 1940, after receiving an investment adviser application, the SEC must grant a registration to an investment adviser; or start a proceeding denying registration, within how many days?
45 days
What should be included in the Form ADV filed to register as an investment adviser with the SEC?
- Compensation to be received
- Conflict of interest disclosure
- Whether the adviser has discretion
- The firm’s business history
What is included in ADV Part 1?
Name of firm, address, phone number, officers, shareholders, States where the adviser is registered, etc.
What is included in ADV Part 2A?
Part 2A: “Brochure” that must be delivered to customers. It describes the investment adviser’s policies, fees, education, types of investments, types of clients, method of analysis used, conflicts of interest, etc.
What is included in ADV Part 2B?
Part 2B is the “Brochure Supplement” which details the educational and work background of the key personnel who make investment decisions or manage accounts.
An updating amendment to Form ADV must be filed by an investment adviser with the SEC no later than:
90 days after the firm’s FISCAL year end
If the SEC suspends or revokes an adviser’s registration under the Investment Advisers Act of 1940, an appeal may be filed in Federal Court within how many days?
60 days
An investment adviser can call itself an “investment counsel” only if the:
Adviser’s principal business is rendering investment supervisory services
Under the Investment Advisers Act of 1940, if an adviser accepts prepaid advisory fees of $1,200 or more, 6 months or more in advance of services rendered, each new client MUST:
Receive a copy of the adviser’s balance sheet in Form ADV Part 2A
The brochure, if revised, must be sent to customers how often?
Annually
Under the provisions of the Investment Advisers Act of 1940, if an adviser takes custody of customer funds or securities, account statements MUST be sent to the customer at what frequency?
Quarterly
The independent auditor’s annual report of verification of customer funds held in custody by an investment adviser, as required by the Investment Advisers Act of 1940, is filed with the SEC on:
ADV-E (E as in Examination)
A Registered Investment Adviser uses past performance in an advertisement. The results shown must show investment income with?
Deductions for management fees and expenses
Under the Investment Advisers Act of 1940, copies of all advertising, notices and circulars must be retained:
If distributed to at least 10 people and retained for a minimum of 5 years
