Random #11

Question 1

Who is not considered a person?

Answer 1

minority, mentally handicapped, dead person.

Question 2

Broker dealer net worth requirement with respect to state

Answer 2

Not subject to state

Question 3

All registrations of persons and companies expire on what date

Answer 3

Dec 31st (for securities is 12 months)

Question 4

Consent to service

Answer 4

allows state administrator to receive legal documents on our behalf

Question 5

Broker dealer with office in a state will have to

Answer 5

Register in that state

Question 6

Investment advisor- with and without custody

Answer 6

Net worth of 10k without custody and with custody 35k and IA firm can post a surety bond in lieu

Question 7

Don’t use guarantee as it relates to securities unless

Answer 7

Treasury bond for instance, insurance product,

Question 8

Exempt transactions

Answer 8

Isolated non issurer transactions, institutions, unsoliceted orders, trustee in a bankruptcy, private placement,

Question 9

Agent terminates relationship with BD

Answer 9

State register- IA notifies
Federal covered= IAR notifies

Question 10

Can you split commissions with another agent

Answer 10

Yes- does not have to be discussed

Question 11

Snowbirds move

Answer 11

30 days to get registered

Answer 12

Customer asks to buy or sell a penny stock not a problem

Question 13

BD records are kept

Answer 13

Mostly 3 years

Question 14

Correspondence and Social Media

Answer 14

Every firm has have written supervisory procedures surrounding use of SM (acceptable and not)

Question 15

IA opens a Margin account for their customer

Answer 15

Credit agreement, hypothecation agreement (Pledging securities as collateral for a loan), Risk disclosure document,

Question 16

Right of recision

Answer 16

If we didn’t properly Blue Sky the security -Tell investor they the right to 30 days to rescind the sale

Question 17

Consideration - Stock split or dividend with no payment is

Answer 17

not an offer of sale

Question 18

Types of orders- vast majority are

Answer 18

Market orders (limit orders)

Question 19

Stop orders on a stock

Answer 19

Used to stop losses

Question 20

MAx criminal penalty

Answer 20

5k and 3 years of prison

Question 21

Federally covered IA

Answer 21

100M to 110M can choose Fed or State. Floor of 90M- 110M is Fed

Question 22

Incidental advisors

Answer 22

Don’t have to be registered (teacher, accountant, etc.)

Question 23

ABC of definition of IA

Answer 23

Advice, Business of giving advice, compensation

Question 24

IA offering free advice- if referring to past performance

Answer 24

12 months of performance

Question 25

3rd party research

Answer 25

Have to disclose to customer

Question 26

Agency cross transactions

Answer 26

Represents buy and sell side. when a broker or portfolio manager successfully transfers an asset from one client to another and eliminates the deal’s spread. Eliminates public market

Question 27

3rd party solicitors to find customers

Answer 27

Has to give a brochure who explains who the solicitor is and for the investment advisory firm. Customer has to know how payment is structured.