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Series 66 > Registration & Licensing > Flashcards

Registration & Licensing Flashcards

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1
Q

Under the Uniform Securities Act, a “natural person” includes a(n):

A. Agent
B. Investment adviser
C. Broker-dealer
D. Issuer

A

Agent

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2
Q

All of the following are defined as “persons” under the Uniform Securities Act EXCEPT:
A. Individuals
B. Joint stock companies
C. unincorporated organizations
D. Trusts where interests of the beneficiaries are not evidenced by a security

A

Trusts where the interests of the beneficiaries are not evidenced by a security

-> if the interests of the beneficiaries were evidenced by the security it would be included

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3
Q 
Under the provisions of the Uniform Securities Act, a “person” includes all of the following EXCEPT:
A. Adult couple
B. Minor
C. Municipality
D. Corporation
A

Minor

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4
Q 
Under the Uniform Securities Act, an investment adviser may be formed as which of the following?
I Corporation
II Partnership
III Association
IV Broker-dealer
A

Corporation
Partnership
Association

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5
Q 
Under Uniform Securities Act, an investment advisor can be formed as any of the following EXCEPT:
A. Corporation
B. Partnership
C. Association
D. Broker-dealer
A

Broker-dealer

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6
Q

The term “issuer” applies to a:
A. Person who proposes to sell a security
B. Director of a company that is selling new shares to the public
C. Trader executing trades off an exchange floor
D. Market maker in a security traded over-the-counter

A

Person who proposes to sell a security

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7
Q

Which of the following securities is (are) NOT considered to have an issuer?
I Collateral trust certificate
II Equipment trust certificate
III Fractional interests in oil and gas programs
IV Certificates of interest in a gravel mining program

A

Fractional interests in oil and gas programs

Certificates of interest inn a gravel mining program

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8
Q

Which of the following would be defined as an “issuer” transaction?
A. Initial public offering of common stock by corporation
B. Sale of closed-end fund shares in NASDAQ market
C. Sale of security effected on NYSE floor
D. Resale of limited partnership interests originally offered in a private placement

A

Initial public offering of common stock by a corporation

-> proceeds go to the issuer

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9
Q

Under the Uniform Securities Act, which of the following is NOT an issuer transaction?
A. Trade of a NASDAQ listed security
B. Redemption of a mutual fund share
C. Purchase of a limited partnership interest from the sponsor
D. Purchase of initial public offering from an underwriter

A

Trade of a NASDAQ listed security

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10
Q

An issuer has filed a registration statement in the State proposing to offer 500,000 shares in a combined primary and secondary distribution, consisting of 300,000 newly issued shares and another 200,000 shares being offered by the officers of the firm. Under Uniform State Law, the:
An issuer has filed a registration statement in the State proposing to offer 500,000 shares in a combined primary and secondary distribution, consisting of 300,000 newly issued shares and another 200,000 shares being offered by the officers of the firm. Under Uniform State Law, the:

A

300,000 shares being sold is an ISSUER transaction and 200,000 shares being sold is a non-issuer transaction

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11
Q

An institutional buyer is defined under the Uniform Securities Act as:
A. An institution with at least $100 mil of assets available for investment
B. Accredited investor under Rule 506 Regulation D of ‘33
C. Any person defined by the Administrator rule or order
D. Any institution that is regulated by the FRB, SEC, or State Insurance or Banking Commissioners

A

Any person defined by the Administrator by rule or order

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12
Q 
All of the following are defined as “institutional buyers” under the Uniform Securities Act EXCEPT:
A. Banks
B. Insurance companies
C. Investment companies
D. Investment advisors
A

Investment advisers

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13
Q

Which of the following is NOT defined as a “broker-dealer” under the Uniform Securities Act?
A. Agent of B/D effects securities transactions
B. Person effects securities for own account
C. Person effects transactions for accounts of others
D. Agent of B/D effects securities transactions not recorded on the books of B/D

A

Agent of the B/D ho effects securities transactions

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14
Q 
An agent of a B/D effects a securities trade for a customer privately, where the transaction is neither known to the B/D nor is it recorded on the books of the B/D. This individual is defined as:
A. Statutory B/D
B. Statutory issuer
C. Statutory investment advisor
D. Statutory administrator
A

Statutory B/D

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15
Q

Under the Uniform Securities Act, an agent that sells securities to a customer in a transaction that is not recorded on the books and records of his B/D:
A. Can only do so if the securities involved are exempt
B. Can only do so if the transactions are unsolicited
C. Will cause the agent’s registration to be revoked
D. Will cause the agent to become a statutory B/D

A

Will cause the agent to become a statutory broker -dealer

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16
Q

A firm is in the business of assisting in mergers and acquisitions of companies. Although the firm does not structure the transactions and does not receive a set fee, the firm does receive monetary compensation in the form of a percentage of the overall deal. Under these facts, the firm is:
A. Defined as B/D regardless of compensation
B. Defined as B/D as percentage of overall deal satisfies the compensation component
C. Not defined as B/D due to lack of predetermined fee
D. Not defined as B/D based upon facts of the situation

A

Defined as B/D as the percentage of the overall deal satisfies the compensation component

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17
Q

When is a bank considered to be a broker-dealer?
A. Never, banks are excluded
B. If assistant manager at the bank solicits a customer to obtain a mortgage from the bank, which the bank sells to Fannie Mae
C. If teller of bank assisting customer that is making a deposit of payroll check, offers money market mutual fund
D. If customer service representative at a bank call center offers a bank CD

A

If teller of the bank assisting customer that is making a deposit of payroll check, offers money market mutual fund

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18
Q

Two individuals sponsor golf tournaments to which they invite venture capitalists that seek to be matched with wealthy potential investors. The individuals sponsoring the event intend to collect a finder’s fee paid by the venture capitalist if he or she receives funds from an investor that attended the golf tournament. Which statement is TRUE based on these facts?
A. The 2 individuals are not defined as broker-dealers since they are in the business of hosting golf tournaments
B. The 2 individuals are not defined as broker-dealers because they do not receive compensation from investors
C. The 2 individuals are defined as broker-dealers because they will receive compensation if an investor is matched to a venture capitalist
D. The 2 individuals are defined as broker-dealers because they are matching a buyer and seller of securities

A

C. The 2 individuals are defined as broker-dealers because they will receive compensation if an investor is matched to a venture capitalist

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19
Q

The term “broker-dealer” EXCLUDES which of the following?
I Person in business trading securities for his own account
II Person in business trading securities for accounts of others
III Financial institutions
IV Issuers of securities

A

Financial institutions

Issuers of securities

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20
Q

All of the following are EXCLUDED from the definition of a broker-dealer under the Uniform Securities Act EXCEPT a firm with no place of business in the State that:
A. has a few clients in the State with a de minimis exemption
B. deals exclusively with issuers of securities
C. deals exclusively with other broker-dealers
D. deals exclusively with insurance companies

A

Has few clients in the State with a de minimis exception

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21
Q

Under the Uniform Securities Act, a B/D that has no place of business in a state does NOT have to register if the firm:
A. Deals solely with the public in that state
B. Solicits orders for non-exempt securities in the state
C. Effects securities trades from its own account on a principal basis with customers in that state
D. Has few clients in a state with B/D “de minimis” rule

A

Has few clients in a state with B/D “de minimis” rule

22
Q 
If an individual works for either a broker/dealer or an issuer and sells securities of that issuer earning a commission, that individual is defined as an:
A. Broker dealer
B. Agent
C. Issuer
D. Administrator
A

Agent

23
Q

Which of the following individuals is NOT EXCLUDED from the definition of a “sales representative” under the Uniform Securities Act?
A. Represents an issuer in isolated non-issuer transactions
B. Represents an issuer in transactions with underwriters
C. Represents an issuer in transactions with financial institutions
D. Represents an issuer in transactions with investors

A

Individuals who represent an issuer in transactions with investors

24
Q

An individual who represents an issuer in the sale of that issuer’s securities and who earns a commission on each transaction would be defined as an “agent” under the Uniform Securities Act if that individual represents the issuer:
A. Sales of specified exempt securities
B. Effecting exempt transactions
C. Sales of covered securities
D. Effecting sales of securities to employees of the issuer

A

Effecting sales of securities to employees of the issuer

25
Q

A company offers a salary reduction defined contribution plan to its employees that adheres to ERISA Rule 404(c). It is administered by the firm’s Human Resources (HR) department. The individual in HR who oversees enrollment of employees in the plan receives a bonus for any employees that purchase the company’s stock in the plan. This employee is:
A. Defined as an agent, register with state
B.defined as an issuer who must register with the state
C. Not defined as agent
D. Not defined as an issuer

A

Defined as an agent and must register in the state

26
Q

An individual who represents an issuer selling federally covered investment company securities:
A. Not required to register as an agent in the state
B. Must register as an agent in the state if compensation is being paid for this activity
C. Must register as an agent in the state if individuals is not federally registered
D. Must register as an agent in the state

A

Must register as an agent in the state if compensation is being paid for this activity

27
Q

All of the following are EXCLUDED from the definition of an agent EXCEPT an individual who represents the issuer in the:
A. Sale of munis to the public
B. Private placement of common stock
C. Sale of common stock to issuer’s employees
D. Sale of federal covered common stock to the public

A

Sale of federal covered common stock to the public

28
Q

Which of the following individuals would be defined as an “agent” under Uniform Securities Act?
A. Secretary who works for an agent taking messages to buy/sell securities
B. Sales associate who accepts limited partnership units being offered privately
C. Employee of corp. who processes 401K contributions, issuing shares of the company’s stock to the employees
D. CFO of the issuer that negotiates with investment banker to set terms of additional share offering

A

Sales associate who accepts orders for limited partnership units being offered in private placement

29
Q

An individual sells the securities of a federal chartered bank. This individual will be excluded from the definition of an agent if the individual:
A. Is employee of a broker/dealer
B. employee of the bank
C. Only offers securities to 5 or less investors
D. Only offers securities in 5 or less states

A

Employee of a bank

30
Q

Under the Uniform Securities Act, EXCEPT:
A. representing an issuer in an exempt transaction is not defined as an agent
B. who is a clerical employee in a broker-dealer is not defined as an agent
C. who is a silent partner of a broker-dealer is not defined as an agent
D. representing a broker-dealer in an exempt transaction is not defined as an agent

A

D. representing a broker-dealer in an exempt transaction is not defined as an agent

31
Q

Which of the following individuals are EXCLUDED from the definition “agent” under Uniform Securities Act?
I represents an issuer in the sale of 1 year commercial paper
II represents an issuer in the sale of Canadian Government Debt
III represents an issuer in a transaction with an underwriter
IV represents a “secondary” government broker-dealer in the sale of the U.S. Government bonds

A

Represents an issuer in the sale of Canadian Government Debt

Represents issuer in a transaction with an underwriter

32
Q 
An individual who represents an issuer in selling securities of that issuer to the issuer’s employees; and who does not earn a commission for his work; is defined under the Uniform Securities Act as an:
A. Agent
B. Broker-dealer
C. Issuer
D. None
A

None of the above

33
Q

Under the Uniform Securities Act, an investment adviser is an person who is compensated for rendering advice about which of the following?
A. Investment contracts
B. Endowment policies
C. Annuity contracts that periodically pay a fixed amount
D. Bank issued certificates of deposit

A

Investment contracts

34
Q

Under the Uniform securities Act, which is defined as an “investment adviser”?
A. Accountant who recommends investment types to clients as part of accounting service
B. Officer of a trust department at a bank who makes investment decisions for various trust accounts
C. Investment column published n a bona fide newspaper with general circulation
D. Person, who for compensation, advises others about buying and selling securities

A

Person, who for compensation, advises others about buying and selling securities

35
Q

Which of the following individuals is defined as an Investment Advisor under Uniform Securities Act?
A. Publisher of financial newsletter that covers merits of different insurance policies
B. Accountant that offers advice on investing in fixed annuity contracts for additional charge
C. Lawyer that offers advice about investments in corporate stocks and bonds for an additional charge
D. Publisher of research reports about corporate stocks that are distributed only to institutional investors

A

Lawyer that offers advice about investments in corporate stocks and bonds for an additional charge

-> choices A and B are not required because they giving advice about insurance products not a securities

36
Q 
which of the following is NOT EXCLUDED from the definition of investment advisor?
A. Broker-dealer
B. Trust company
C. Insurance company
D. Savings and loan
A

Insurance company

37
Q

Under the Uniform Securities Act, which of the following is defined as federal covered investment advisers?
I. Investment advisers managing assets of 100 mil or more
II. Investment advisers to investment companies registered under investment company act of ‘40
III. Investment advisers to insurance companies

A

Investment advisers managing assets of $100 mil or more

Investment advisers to investment companies registered under investment company act of ‘40

38
Q 
Which of the following would MOST likely by an investment adviser that is state registered?
A. Certified financial planner
B. Adviser with assets under 100 million
C. Investment company
D. Trust company
A

Certified financial planner

39
Q

Which of the following is NOT defined as a federal covered adviser?
A. Adviser to insurance companies registered in the state
B. Adviser to investment companies registered with SEC
C. Adviser managing 100 million or more assets
D. Adviser giving advice about U.S. government securities only

A

Adviser to the insurance companies registered inn the state

40
Q

An investment adviser has determined that it MUST register as a federal covered advisor. Meaning:
A. Solicits clients on the behalf of other investment advisors
B. Currently operates in at least 10 states
C. Has at least $110 million assets managed
D. Provides financial planning to customers for compensation as a regular business

A

Has at least $110 million assets managed

-> have to operate in 15 or more states to register with the SEC

41
Q 
All of the following individuals are EXCLUDED from the definition of an investment adviser EXCEPT:
A. Lawyer
B. Engineer
C. Geologist
D. Accountant
A

Geologists

-> or doctors

42
Q 
Which of the following are EXCLUDED from the definition of an investment adviser under the Uniform Securities Act?
I. Employee of an investment adviser
II. Federal covered adviser
III. Savings and loan institution
IV. Broker-dealer
A

Employee of an investment adviser
Federal covered adviser
Savings and loan institution
Broker-dealer

43
Q

Under the Uniform Securities Act, which of the following persons with no place of business in a state is EXCLUDED from the definition of the “Investment Adviser”?
A. Person who gives advice for a fee about public utility mortgage bond issues
B. Person who gives advice fo a fee about municipal securities
C. Insurance company that renders advice about securities for a fee to its clients
D. Trust that receives special compensation for rendering advice about securities

A

Trust that receives special compensation for rendering advice about securities

44
Q

Under the Uniform Securities Act, which of the following world be defined as an investment adviser?
A. US Trust Corporation
B. Countywide Savings and Loan
C. IZZI Advisers, which has $110 million of assets under management
D. ACCO Publishers, which has a website that charges for customized financial plans based on customer input

A

ACCO publishers, which has a website that charges for a customized financial plans based on customer input

  • > A and B are deposit taking institutions so excluded
  • > C: federal covered adviser
45
Q 
A Registered Investment Adviser is one that is registered with (the):
A. FINRA
B. NASAA
C. SEC
D. MSRB
A

SEC

46
Q

Which of the following persons is required to register as an investment adviser under the Uniform Securities Act?
A. Attorney who writes a legal opinion included in the registration statement filed with the state for a new non-exempt securities offering
B. Broker-dealer who gives investment advice in the regular course of business
C. Agent of broker-dealer who gives investment advice as part of his/her regular duties and who charges a fee
D. Broker/dealer that charges an annual flat fee to customers for both investment advice and portfolio trade executions

A

Broker/dealer that charges an annual flat fee to customers for both investment advice and portfolio trade executions

-> C is an investment adviser REPRESENTATIVE, state level

47
Q

Under the Uniform Securities Act, all of the following persons are defined as investment adviser representatives EXCEPT the:
A. President of the advisory firm
B. Vice President of administration of advisory firm
C. Head word processor of the advisory firm
D. Head salesman of the advisory firm

A

Head word processor of the advisory firm

48
Q

The provisions of the Uniform Securities Act include:
I Anti-fraud
II Common law deceit
III Registration of securities
IV Registration of broker-dealers, investment advisers, and their agents

A

Anti- fraud
Common law deceit
Registration of securities
Registration of broker-dealers, investment advisers, and their agents

49
Q

Federal securities laws supersede the provisions of the Uniform Securities Act in which of the following?
I. Registration requirements applicable to securities offerings
II. Registration requirements applicable to investment advisers
III. Broker-dealer capital, custody, financial responsibility and record keeping requirements
IV. Investigation and bringing enforce the action against broker-dealers for unlawful conduct

A

I. Registration requirements applicable to securities offerings
II. Registration requirements applicable to investment advisers
III. Broker-dealer capital, custody, financial responsibility and record keeping requirements

  • > NSMIA overlap of the Federal and State regulation
  • > the state is empowered to investigate
50
Q 
State "blue sky" laws provide for:
I	 	Registration of broker-dealers
II	 	Registration of agents
III	 	Registration of investment advisers
IV	 	Registration of issuers
A

Broker-dealers
Agents
Investment advisers

51
Q

Under the Uniform Securities Act, which of the following persons must register as a broker-dealer in a state?
I A firm with a place of business in the state that has clients in the state
II A firm with no place of business in the state that has no more than 25 clients in the state in the preceding 12 months
III A firm with no place of business in the state that deals exclusively with issuers
IV A firm with no place of business in the state that deals exclusively with financial institutions

A

Firm with a place of business in the state that has clients in the state
Firm with no place of business in the state that has no more than 25 clients in the state in the preceding 12 months

52
Q

Which of the following broker-dealers is (are) NOT required to register in a state?
I firm with no place of business in the state that has no clients in the state
II firm with no place of business in the state that has 25 clients in the state over the preceding 12 months
III firm with no place of business in the state that deals exclusively with issuers
IV firm with no place of business in the state that deals exclusively with financial institution

A

Firm with no place of business in the state that has no clients in the state
Firm with no place of business in the state that deals exclusively with issuers
Firm with no place of business in the state that deals exclusively with financial institutions

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