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Series 63: Lecture Review > Lecture Review > Flashcards

Lecture Review Flashcards

1
Q

State Laws

A

Uniform Securities Act (USA)

NASAA Statements of Policy and Model Rules

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2
Q

Federal Law

A

Investment Advisers Act 1940

National Securities Markets Improvements Act of 1996 (NSMIA)

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3
Q

NOT a person

A

Minors
Deceased
Mentally incompetent

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4
Q

Broker-Dealer MUST register in the state when:

A
  1. Office in the state
    or
  2. 1 resident retail client in state
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5
Q

Not BDs:

A

Agents, Issuers, Banks, savings institutions, Trust companies
individuals trading their personal accounts, out of state BDs

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6
Q

BD Registration

A
  1. Submit app (Form BD)
  2. Pay filing fees)
  3. Publish an announcement
  4. Meet record keeping requirements

Effectiveness: Noon 30 days post filing

Renewal: Every Dec 31st

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7
Q

Agent MUST register in the state when:

A
  1. Originates
  2. Directs
  3. Receive and Accept

based on offers, not retail vs institutional

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8
Q

Exempt Agents:

A

Admin, clerks

employees of Issuers

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9
Q

Agent Registration

A
  1. submit U-4
  2. Consent to service
  3. Pay fees
  4. may require bonding

Effectiveness: Noon 30 days post filing
Renewal: Every Dec 31st

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10
Q

Agent Termination

A

Form U-5
ALL PARTIES NOTIFY: agent, old firm, new firm

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11
Q

Canadian Agents

A

Renew Dec 1st

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12
Q

When does a natural person register as an IA?

A

Sole Proprietor

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13
Q

Exclusions from IA

A

LATE professionals: laywers, accountants, teachers, engineers

Banks, BDs, publications, IARs

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14
Q

Where do IA Firms Register?

A
  1. Office in State
  2. More than 5 retail clients in state
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15
Q

IA Firms Register with SEC when:

A
  1. AUM > $100m
  2. 15 or more states
  3. Advise investment companies

Notice of file required in states with office and more than 5 retail clients

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16
Q

Investment Advisor state level register through:

A
  1. Form ADV
  2. Pay filing fees
  3. Record keeping reqs

Effectiveness: Noon, 30 days after filing

Renewal: Dec 31st

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17
Q

Federal-Covered Advisor

A

firms with $100 million or more AUM

Above $110 must be SEC
Below $90 must be state

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18
Q

IARs always register at the…

A

state level

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19
Q

State Registered IARs must register when:

A
  1. place of business
  2. More than 5 retail clients
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20
Q

Federal Covered IAR must register when:

A

Place of business

21
Q

IAR Registration

A
  1. Form U-4
  2. Consent to service of process
  3. Pay fees

Effectiveness: Noon 30 days post filing
Renewal: Dec 31st

22
Q

IAR Termination (who sends notice)

A

State registered: IA Firm
Federal Covered: IAR

23
Q

NOT Securities

A

DO NOT REQUIRE Registration
Commodities
Personal Residence
Currencies
Collectibles
Retirement Plan
Fixed Annuity

24
Q

How are Securities registered?

A
  1. Coordination: SEC filing (state and Fed)
  2. Qualification: file with individual state
  3. Notice of Filing: provide states with SEC filed docs (for-covered securities)
25
Exempt Securities
1. Govt securities 2. Foreign securities 3. Munis 4. Banks. 5. Commercial paper 6. Retirement plans 7. FEDERAL-COVERED Securities: nationally listed, mutual funds, out of state munis, Reg D
26
Exempt Transactions
1. Unsolicited 2. Underwriters 3. Fiduciary 4. Institutions
27
Exempt Securities and Transactions can be sold...
in the state WITHOUT REGISTRATION and need not file ads
28
Admin has Jurisdiction if an offer:
Originates or Directed or Accepted in the state EX: Agent in NY, Client lives in FL, Client accepted in TX
29
Jurisdiction for TV or Radio
Originating State Only
30
Jurisdiction for Newspaper
State of publication only
31
Jurisdiction for national newspaper (general circulation)
No Jurisdiction
32
Administrator's Actions:
1. Make, amend or rescind rules (everyone) or orders (specific) 2. Conduct investigations and issue subpoenas 3. Issue cease and desist orders 4. Deny, suspend, cancel or revoke registrations
33
Findings of Facts for Terminations requires TWO findings:
1. Public's best interest and 2. The violation/bad action
34
The following within the past 10 years result in statutory disqualification:
1. Securities-related misdemeanor 2. Any felony 10 years pass - No SD NOT non-securities misdemeanor
35
Withdrawal registration
Termination by request - No violation Effective after 30 days, admin jurisdiction 1 year
36
Cancel registration
no longer exist or ceased doing business: Dissolution of business, death or legal incompetency
37
Civil Lawsuit
Files Lawsuit: Investor Penalty: make whole Statue of Limitations: earlier of 3 years from violation or 2 years from discovery
38
Criminal Lawsuit
Files Lawsuit: State prosecutor Penalty: $5k or Jail 3 years Statue of Limitations: 5 years from violation
39
Does plantif or defendant need to be alive for a civil lawsuit to proceed?
No, neither
40
Civil Lawsuit: customer recovers the securities at
original purchase price
41
Civil Lawsuit: interest is
paid from payment date
42
Civil Lawsuit: attorney fees and cost paid by
defendant
43
Civil Lawsuit: income received from the investment is
subtracted from the recovery
44
NOT "account fees" that need disclosures
commissions mark ups/downs Advisory fees
45
Testimonials vs Endorsements
Testimonials: current client's experience Endorsements: Not a current client
46
Entanglement
BD/Agent/IA/IAR is involved in the perpetration of content
47
Adoption
BD/Agent/IA/IAR endorses or approves of content
48
Soft Dollar items
research reports, industry journals, software, seminar fees - things that benefit IA's clients
49
Custody requires
1. Notice to Admin 2. Quarterly Statements to Client

Series 63: Lecture Review (1 decks)

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