Overview

Question 1

What is the primary purpose of the Securities Act of 1933?

Answer 1

Provide investors with full and fair disclosure regarding new issues (prospectus)

Question 2

True or False: The SEC judges an offering’s investment merit and provides approval.

Answer 2

False

Question 3

True or False: The Uniform Securities Act is exactly the same law in every state.

Answer 3

False. The USA is a model law, not the actual law of any state.

Question 4

According to the USA, who is included under the term “person?” 6

Answer 4

Any legal entity, including

1. individuals (clients/agents/IARs),
2. BDs,
3. IAs,
4. issuers,
5. corporations, and
6. partnerships

Question 5

True or False: In state law, individuals representing issuers in effecting securities trades are ALWAYS deemed agents.

Answer 5

False. Individuals are not deemed agents if representing issuers of exempt securities or effecting exempt transactions.

Question 6

As it applies to a BD or IA, what does the term “exclusion” mean in the USA?

Answer 6

Exclusion signifies that a person does not meet the definition of a BD or IA in the state.

Question 7

A securities firm that executes trades for its own account or the accounts of others is deemed a _______________.

Answer 7

A securities firm that executes trades for its own account or the accounts of others is deemed a broker-dealer (BD).

Question 8

Who manages accounts, solicits services, or makes recommendations on behalf of a registered investment adviser?

Answer 8

An investment adviser representative (IAR)

Question 9

An individual who represents an issuer in selling registered, non-exempt securities for compensation is an ________.

Answer 9

An individual who represents an issuer in selling registered, non-exempt securities for compensation is an agent.

Question 10

An ___________________________________ is to an investment adviser what an ________ is to a BD.

Answer 10

An investment adviser representative (IAR) is to an investment adviser what an agent is to a BD.

Question 11

Who is the official that monitors and administers a state’s securities laws?

Answer 11

The Administrator or Commissioner

Question 12

The USA refers to an individual who represents a BD in the sale of securities as an ________.

Answer 12

The USA refers to an individual that represents a BD in the sale of securities as an agent.

Question 13

Identify who is considered a person under the USA.

Answer 13

Business entities, issuers, estates, governments, individuals (e.g., clients, IARs and agents)

Question 14

What is the general definition of an investment adviser?

Answer 14

A firm that provides advice/analyses regarding securities, as part of a business, and for compensation

Question 15

Identify the acronym: USA

Answer 15

Uniform Securities Act

Question 16

Identify the acronym: IA

Answer 16

Investment Adviser

Question 17

Identify the acronym: IAR

Answer 17

Investment Adviser Representative

Question 18

Identify the acronym: NSMIA

Answer 18

National Securities Markets Improvement Act

Question 19

Identify the acronym: NASAA

Answer 19

North American Securities Administrators Association

Question 20

What is the ABC Test for investment advisers?

Answer 20

The test that defines an IA as a firm that provides Advice as part of a Business for Compensation

Question 21

Identify the acronym: RIA

Answer 21

Registered Investment Adviser

Question 22

Who enforces the Uniform Securities Act?

Answer 22

The Administrator

Question 23

What is the general definition of an issuer?

Answer 23

Any person who issues or proposes to issue a security, such as government entities and corporations.

Question 24

An _______of an ________ is an individual who represents an issuer in effecting transactions with the general public.

Answer 24

An agent of an issuer is an individual who represents an issuer in effecting transactions with the general public.

Question 25

What's an issuer transaction?

Answer 25

A transaction in which the issuer receives the proceeds.

Question 26

True or False: The U.S. Virgin Islands are a member of NASAA.

Answer 26

True

Question 27

True or False: Puerto Rico is a member of NASAA.

Answer 27

True

Question 28

Is an individual who represents an issuer in the sale of registered stock considered an agent?

Answer 28

Yes. An individual who represents an issuer of securities being offered publicly must register as an agent.

Question 29

True or False: States may make rules that are more restrictive than SEC (federal) rules.

Answer 29

False. NSMIA prohibits states from making laws that are more restrictive than existing federal requirements.

Question 30

List the entities that make up NASAA. 6

Answer 30

1. All 50 U.S. states, 2. the U.S. Virgin Islands, 3. Puerto Rico, 4. the District of Coloumbia, 5. Canada and 6. Mexico

Question 31

What are the three components that must be met for a firm to be defined as an IA?

Answer 31

1) Provide advice regarding securities, 2) Do so as a business 3) Receive specific compensation (the ABC test)

Question 32

Identify who IS NOT considered a person under the USA. 4

Answer 32

1. Minors, 2. incompetents, 3. securities, and 4. the deceased are NOT considered persons.

Question 33

What is the three-pronged test for determining whether a firm meets the IA definition?

Answer 33

A-B-C. A = advice/analyses, B = business, C = compensation

Question 34

True or False: The District of Columbia is a member of NASAA.

Answer 34

True. Washington D.C. is a member of NASAA.

Question 35

NSMIA indicates that securities listed on the NYSE, NASDAQ and Toronto Exchange are _______ _______ securities.

Answer 35

NSMIA indicates that securities listed on the NYSE, NASDAQ and Toronto Exchange are federal covered securities.

Question 36

In state law, individuals who represent BDs in effecting securities transactions are referred to as ______.

Answer 36

In state law, individuals who represent BDs or issuers in effecting securities transactions are referred to as agents.

Question 37

Identify two significant creations that are credited to the National Securities Markets Improvement Act (NSMIA).

Answer 37

Federal Covered Advisers and Federal Covered Securities

Question 38

The _____ _________ _________ ______________ __________________ is an organization consisting of state Administrators.

Answer 38

The North American Securities Administrators Association (NASAA) is an organization consisting of state Administrators.

Question 39

The Securities Act of 1933 regulates ____________.

Answer 39

The Securities Act of 1933 regulates new issues.