Prohibited And Ethical Biz Practices Under The USA

Question 1

Is a closed and management fund a redeemable instrument?

Answer 1

No

Question 2

What types of securities may a closed end management fund issue?

Answer 2

Common stock, preferred stock, or bonds.

Question 3

May a closed and management fund offer fractional shares?

Answer 3

No

Question 4

What does an investment advisor who sells a security that it owns to an advisory client need to do for it to be legal?

Answer 4

The IA that acts as a broker dealer to the buyer of the securities needs to obtain written consent and disclosure

Question 5

If an investment advisor holds risky securities in it’s own account that it would not recommend to clients they must disclose these transactions to the client?

Answer 5

Yes.

Question 6

A complaint that was made by a customer over the phone is required to be documented?

Answer 6

False, complaints must be made in writing to be reported

Question 7

How is a no load fund defines under FINRA rules?

Answer 7

1. No 12b-1 fees in excess of .25% of the funds NAV.

2. No front end load/sales charge

Question 8

What is the definition of a money market security?

Answer 8

Debt instruments with less than one year until maturity.