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Series 63: Lecture Review > Lecture Review > Flashcards

Lecture Review Flashcards

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Series 63 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
Q

Exempt Securities

A
  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
Q

Exempt Transactions

A
  1. Unsolicited
  2. Underwriters
  3. Fiduciary
  4. Institutions
27
Q

Exempt Securities and Transactions can be sold…

A

in the state WITHOUT REGISTRATION and need not file ads

28
Q

Admin has Jurisdiction if an offer:

A

Originates or Directed or Accepted in the state

EX: Agent in NY, Client lives in FL, Client accepted in TX

29
Q

Jurisdiction for TV or Radio

A

Originating State Only

30
Q

Jurisdiction for Newspaper

A

State of publication only

31
Q

Jurisdiction for national newspaper (general circulation)

A

No Jurisdiction

32
Q

Administrator’s Actions:

A
  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
Q

Findings of Facts for Terminations requires TWO findings:

A
  1. Public’s best interest
    and
  2. The violation/bad action
34
Q

The following within the past 10 years result in statutory disqualification:

A
  1. Securities-related misdemeanor
  2. Any felony
    10 years pass - No SD

NOT non-securities misdemeanor

35
Q

Withdrawal registration

A

Termination by request - No violation
Effective after 30 days, admin jurisdiction 1 year

36
Q

Cancel registration

A

no longer exist or ceased doing business:
Dissolution of business, death or legal incompetency

37
Q

Civil Lawsuit

A

Files Lawsuit: Investor

Penalty: make whole

Statue of Limitations: earlier of 3 years from violation or
2 years from discovery

38
Q

Criminal Lawsuit

A

Files Lawsuit: State prosecutor

Penalty: $5k or Jail 3 years

Statue of Limitations: 5 years from violation

39
Q

Does plantif or defendant need to be alive for a civil lawsuit to proceed?

A

No, neither

40
Q

Civil Lawsuit: customer recovers the securities at

A

original purchase price

41
Q

Civil Lawsuit: interest is

A

paid from payment date

42
Q

Civil Lawsuit: attorney fees and cost paid by

A

defendant

43
Q

Civil Lawsuit: income received from the investment is

A

subtracted from the recovery

44
Q

NOT “account fees” that need disclosures

A

commissions
mark ups/downs
Advisory fees

45
Q

Testimonials vs Endorsements

A

Testimonials: current client’s experience

Endorsements: Not a current client

46
Q

Entanglement

A

BD/Agent/IA/IAR is involved in the perpetration of content

47
Q

Adoption

A

BD/Agent/IA/IAR endorses or approves of content

48
Q

Soft Dollar items

A

research reports, industry journals, software, seminar fees
- things that benefit IA’s clients

49
Q

Custody requires

A
  1. Notice to Admin
  2. Quarterly Statements to Client

Series 63: Lecture Review (1 decks)

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