PART II: Chapter 1 - The Uniform Securities Act Flashcards
What law and organization regulate Federal / State?
Federal
- Investment Advisors Act of 940
- SEC
State
- USA
- State Securities Administrators
What are the two types of Investment firms?
Broker-Dealers
Investment Advisors
For Broker-Dealers and Investment Advisors, list their:
- Employee type
- Services
- Compensation
Broker-Dealers
- Registered Reps (Fed) and Agents (State)
- New Issues and Secondary Market Transactions
- Commissions
Investment Advisors
- Registered Investment Advisors
- Financial Planning and Managed Accounts
- Fees
What are the two purposes of USA?
- Minimize duplication of requirements
- Prevent fraud
Under USA, a person includes ____________ or ____________?
Who / what does it NOT include?
Individual -OR- Legal Entity (i.e. corps, trusts, governments, etc.)
Minors
With respect to a Broker-Dealer, what duties do they perform when they act as a Broker? A Dealer?
Broker: buy / sell securities for the accounts of others for a commission.
Dealer: buy / sell securities for their own account and mark up / down.
What FOUR “persons” are NOT considered Broker-Dealers?
Person with NO place of business in the state (page 47)
Issuers
Banks
Agents (of Broker-Dealers)
What is an Agent?
A representative of a Broker-Dealer or Issuer effecting security transactions.
Is a Registered Rep considered and Agent?
Yes
If a firm conducts transactions with Institutional Clients ONLY, doe they register as a BD?
No
Dealing in what securities can exempt someone from being considered an Agent?
US, Municipal, or Canadian Government Securites
Bank securities
Promissory notes
Investment contracts
What are four exempt transactions?
Secondary Market
Qualified Purchasers
Private Placement
Transactions with organization employees IF NO Compensation is made
Is a partner, officer, or director of a BD considered and agent?
ONLY if they effect transactions.
Does an assistant of an Agent have to register as an agent?
ONLY if they effect transactions.
When referring to an IA, what are the ABCs?
providing ADVICE (directly or indirectly–i.e. writings)
as a BUSINESS
for COOMPENSATION
What are some exclusions from the IA definition?
IARs
BDs
Institutions
- Savings & Loan, Investment Companies, Banks …
even if they charge an advisory fee)
LATE (if incidental to daily duties)
Publishers (general advice ONLY)
Federally Covered Advisors
Employee Benefit Plans (i.e. 401k)
Is the implementation of investment advice a criteria of an IA?
No
What is an IAR?
Investment Advisor Representative:
An associate of an IA who gives security advice or solicits advisory services.
What is a solicitor?
Are they considered IARs?
Salespeople who refer customers to IAs for a fee.
Yes
If an IAR doesn’t have to register in a state, are they still subject to anti-fraud provisions?
Yes
What are AUMs?
What AUM amounts define State OR Federally registered IAs?
Assets Under Management
STATE ≤ $100MM ==> EITHER <== ≥ $110MM FED
At what level of AUMs MUST an IA register with the State?
$90MM or less
What defines an Issuer?
Any person who issues or proposes to issue a security and receives the proceeds.
If a person issues certificates in ___________, ____________, and ___________
they are exempt from being considered an issuer?
Are the securities exempt?
Oil, gas, and mining
Yes
No
