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Fundamentals and Insurance > Registered Investment Advisors (Lesson 2) > Flashcards

Registered Investment Advisors (Lesson 2) Flashcards

1
Q

Advisor has assets < $100 M they must register with

A

The State

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2
Q

Advisor has assets > $110 M they must register with

A

The SEC

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3
Q

Advisor has assets between 100M and 110M they must register with

A

The choice of State or SEC

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4
Q

An investment adviser is defined for purposes of the Investment Advisors Act of 1940 as someone who is

A
  • In the business
  • of providing advice about securities
  • for compensation
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5
Q

For an advisor to register with the SEC they must

A

file from ADV

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6
Q

To withdraw registration with the SEC an advisor must file form

A

ADV-W

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7
Q

Form ADV Part 1 contains

A
  • Investment business, ownership, clients, employees, business practices, affiliations, and disciplinary events of the advisor or its employees
  • RIA must E-File ADV part 1 and Schedule I annually within 90 days of their fiscal year end
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8
Q

Form ADV Part 2 Contains

A
  • Advisor compensation, fees, education, investment objectives, conflicts of interest, and the background of advisory personnel
  • Must be written in plain English
  • Changes may be made annually unless material changes
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9
Q

Form ADV Part 3 contains

A
  • Information from the Customer Relationship Summary
  • Provides information about the relationship and services the firm offers including fees, costs, specified conflicts of interest, standard of conduct, and disciplinary history among other things
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10
Q

Exceptions to registration with the SEC (TABLES are incidental)

A

All the below is solely incidental to their profession:

  • Teachers
  • Accountants
  • Brokers
  • Lawyers
  • Engineers
  • Banks and bank holding companies that are not investment companies Publisher
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11
Q

Exemptions from Registration (VIPs are SaFE from Exemptions

A
  • Venture capital
  • Insurance Companies
  • Private funds less than $150 million
  • Home State
  • Foreign advisors
  • Securities not on a national Exchange
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12
Q

Advisers to Private Funds will have to provide

A
  • Basic organizational and operational information about each fund they manage
  • General information about the size and ownership of the fund
  • General fund data - advisers services to the fund
  • Identification of five categories of gate keepers that perform critical roles for advisers and the private funds they manage (Auditors, Prime Brokers, Custodians, Administrators, Marketers)
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13
Q

The Brochure Rule requires written disclosure to every client of the following

A
  • services and fees for services
  • types of securities
  • education background of advisor
  • Participation/interest in securities transactions
  • Must be given before or at the time of entering into a contract
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14
Q

When should the brochure rule information be provided to client

A
  • Before or at the time of entering into a contract (ADV Part 2 A and B)
  • Provided annually
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15
Q

How does a person register with FINRA

A

Form U-4

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16
Q

What does the Series 6 allow a person to do

A

Sell Mutual Funds, UITs. variable life insurance, and variable annuities

17
Q

What does the Series 7 allow a person to do

A

Sell everything but commodities and futures

18
Q

An investor must arbitrate at FINRA if

A
  • Arbitration is required by written agreement
  • dispute is with a member of FINRA
  • Dispute involves the securities business of the broker and/or brokerage firm
19
Q

Under the Dodd Frank Wall Street reform and consumer protection act lenders must now verify

A

whether based on income, credit history, and other data a borrower can reasonably be expected to repay their loan

20
Q

Under Dodd Frank after losing their job homeowners who are unable to pay may qualify for up to

A

$50,000 in loan assistance

21
Q

Under Dodd Frank banks must retain at least ___% of risky loan exposure on their books

A

5%

22
Q

Dodd Frank: FDIC insurance is permanent at

A

$250,000

23
Q

Dodd Frank: To meet the definition of an accredited investor (1, or 2, 3 Test)

A
  • 1 million net worth exclusive of personal residence or
  • Make minimum $200,000 in each of the two most recent years if single or
  • Make a minimum of $300,000 of Joint income with a spouse in each of two most recent years

Fundamentals and Insurance (10 decks)

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