Part II Chapter 1

Question 1

An individual or legal entity under the USA. including: individuals, corporation, partnerships, associations, trusts, unincorporated organizations, or governments.

Answer 1

Person

Question 2

Any person engaged in the business of effecting transactions in securities for the accounts of others or for the firm’s own account

Answer 2

Broker Dealer

Question 3

Buying and selling securities for the accounts of customers and charging commissions

Answer 3

broker

Question 4

buying or selling securities for or from the firm’s own inventory and charging a mark up to the price on a buy and mark down to the price on a sell

Answer 4

dealer

Question 5

individuals who represents either broker dealers OR an issuer

Answer 5

agents

Question 6

entities that offer their securities and receive the proceeds

Answer 6

issuers

Question 7

The Uniform Securities Act is meant to protect…

Answer 7

the investing public. (individual investors)

Question 8

individuals who are agents of their brokerage firms

Answer 8

registered representatives

Question 9

How do individuals who represent a broker dealer or issuer get paid?

Answer 9

commissions

Question 10

Name the list of exempt securities under the issuer exclusions for an agent:

Answer 10

US govt securities Municipal securities Canadian govt securities Banks Promissionary Notes Insurance co. securities Fed. savings & Loans

Question 11

Name the list of exempt transactions under the issuer exclusions for agent:

Answer 11

-isolated non-issuer transactions: 2nd market transactions -transactions in certain covered securities -transactions with investing employee, partners, or directors of the issuer

Question 12

a person, who, for compensation, engages in the business of advising others either directly or through publications or writings

Answer 12

Investment Advisors

Question 13

2 examples of Investment Advisors

Answer 13

Portfolio Managers

Financial Planner

Question 14

Key points of the definition of an investment advisor:

Answer 14

A: provide Advice about securities

B: as a Business

C: for Compensation in any form, i.e. advisory fees

Question 15

Exclusions from the definition of Investment Advisors:

Answer 15

• IARs
• Institutions: Banks, savings institutions, trust co., investment co.
• Lawyers, Accountants, Teachers, Engineers (LATE) if incidental to practice
• BDs and Agents if incidental and no extra compensation
• publishers who give general securities advise
• federal covered advisors
• Employee Benefit Plan

Question 16

IAR does not include employees who::

Answer 16

• perform clerical tasks (receptionist)
• ONLY solicit sales of Fixed Annuities

Question 17

an investment advisor who comes within the def. of IA under the federal Investment Advisors act of 1940

Answer 17

Federal Covered Advisor

Question 18

Federal Covered Advisors must register with the:

Answer 18

SEC only

b/c FCA is under under federal regulation!!!

FCA is exempt from state registration b/c fed law preempts state law.

Question 19

You do NOT have to register under the SEC as a Federal Covered Advisor if you are an IA who:

Answer 19

• gives advice on US govt securities only
• banks
• Publishers of general advice about securities
• LATE professions