Other Federal and State Regulations Flashcards
What is the Trust indenture Acto 1939?
Created because the 1933 act didnt adequately protect bondholders after and offering was completed
What must be made with a Trust Indenture?
All Interstate offerings of non-exempt BONDS of $50MM or more
What is exempt from the Trust Indenture act of 1933?
US Govt, Agency, and Municipal debt
What else does the 1939 act require?
The appointment of a substantial trustee to protect interest of bondholders and insure. Trustees cannot have conflicts of interest
What is the Investment company act of 1940?
Investment companies are required to register with the SEC under this Act. It also defines types of investment organizations that are allowed
What is the Investment Advisers Act of 1940?
Investment advisers must register with the SEC if they give advice interstate to 15 or more people.
What are specifically not considered to be investment advisers?
Broker Dealers, banks, general circulation newspapers
Are market newsletter services considered to be Investment Advisers?
YES
Which firms require investment adviser registration?
Firms that offer wrap accounts and non-managed flat fee accounts
What are Federal Covered Advisers?
Bigger advisers that have to register with the SEC. Advisers to investment companies and advisers managing over $100MM of assets
What are State Registered Advisers?
Smaller advisers that must register with the state. Less than $100MM in assets
What is the Securities Investors Protection Act of 1970?
SIPC. This is neither a government nor a regulatory authority. It is a NON-PROFIT member corporation funded by its member securities BD’s
What does the SIPC do, and what does it cover?
It protects investors from BD failure. Covers $500,000 in equity per customer, inclusive of $250,000 cash coverage
Is SIPC applicable to mutual funds?
NO
What are the hours that unsolicited calls and faxes can be made under the Fed. Telephone Consumer Protection Act of 1991?
From 8:00 AM to 9:00 PM, in the recipient’s time zone
What must the caller disclose in the phonecall?
- Name
- Firm
- Firm address
Who does the Telephone Protection act not apply to?
Non profit org’s
What is the National Do Not Call Registry?
This is overseen by the FTC (Federal trade commission), and any person who registers cannot receive unsolicited calls from businesses
An exemption applies to the 1991 telephone act if a caller has an established business relationship (EBR) with a customer. What defines an EBR?
- Did business with the firm in the last 18 months
- OR contacted the firm to inquire about products/services in the previous 3 months
What rule prevents issuers from extending credit to any officer or director?
SOX
What are the different ways in which you can register a security in a State?
- Registration by Coordination: coordinate Fed. reg. with state reg.
- Reg. by Qualification: used by company that has never file in the state before (most expensive/detailed)
- Reg. by Filing: like a renewal app. - used by company that has issued in that state before
What securities may be exempt from State registration?
Blue Chip Securities - exempts subsequent issues of listed companies
Manual exemption - exempting debt or other fixed income from reg. if included in Moody’s or SandP manual
When must the registered representative be registered in a state?
If they want to accept solicited OR un-solicited orders from that state. The salesman must pass the Series #63 - Uniform State Law Agent’s exam
What is an investment Adviser representative?
BD’s that offer wrap accounts and charge a single annual fee. They must have passed the Series #65
