Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

22.05 S63 Course > Registration & Licensing Requirements > Flashcards

Registration & Licensing Requirements Flashcards

1
Q

What does NASAA stand

for?

A

North American Securities Administrators Associate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Define the

NASAA

A

The body of state regulators that creates and amends Model Rules under the USA to maintain state “Blue Sky Laws”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What does NSMIA stand for?

A

National Securities Markets Improvement Act of 1996

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What did the NSMIA do?

A

This eliminated duplicate registration requirements at the federal and state levels

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

According to the USA - who creates laws?

A

The State Legislature is responsible for this under the USA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What does the State Administrator do?

A

The enforce laws created by the state legislature

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Under the USA define a

“person”?

A

A Personal is a legal entity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Under the USA, the definition of “person” includes:

A

One who has legal standing to sue or be sued.

This includes individuals, natural persons, and legal entities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are some examples of legal entities?

A 
Partnerships
Corporations
Associations
Business Trusts/Trusts w/ beneficiaries 
Unincorporated Organizations 
Investment Clubs
Federal, State, or Local government bodies
Political Subdivisions or Agencies 
Joint Stock Companies or Joint Ventures 
Any other legal or commercial entity 
Estates
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Who are NOT considered “Persons”

A

Minor Children
Mentally Incompetent Individuals
Deceased Individuals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are issuer transactions?

A

These are primary market transactions and benefit the issuer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are non-issuer transactions?

A

These are secondary market transactions and don’t benefit the issuer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Who cannot be an Institutional Buyer?

A

Individuals of the general public cannot be this kind of buyer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Define an issuer

A

Any person who issues or proposes to issue a security in a primary offering or any person who receives the proceeds from a new issue offering

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

who can be an issuer?

A

A corporation
The US Government
Or Municipalities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Can governmental entities be issuers?

A

Yes, governmental entities and municipals can be issuers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Who refers to issuers as the manager or depositor?

A

Certificates of Deposit for a Security
Voting Trust Certificates
Collateral Trust Certificates
Unit Investment Trusts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Regarding Equipment Trust Certificates who is the issuer?

A

The issuer is the entity to whom the equipment is being leased
Due to the Title going to the corporation (the issuer) once the payments are complete

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Which transactions do not have an issuer due to too many fraudulent activities?

A

Fractional Interests or Participations in Oil, Gas, or mining titles or leases
or
Payments out of production under such titles or leases
There are NO issuers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

When does an issuer transaction occur?

A

This transaction occurs when an issuer sells or redeems securities for its OWN benefit and RECEIVES the proceeds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Where do issuer transactions occur?

A

These are primary market transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Define Non-Issuer Transaction

A

This refers to any purchase or sale of a security that does not directly benefit the issuer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Where do non-issuer transactions occur?

A

These transactions are secondary market transactions
Between persons who trade (Buy or Sell)
OUTSTANDING securities after the COMPLETION of a primary offering

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is the most common instance of a non-issuer transaction?

A

Regular Secondary Market Trading between investors is the most common instance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Define a Broker-Dealer

A

This is a firm engaged in the business of buying or selling securities for the accounts of others or for its OWN account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Define an Agent

A

An agent is an individual who represents a broker-dealer, or an issuer
ATTEMPTING to effect or effecting securities TRANSACTIONS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What is a consent to service of process?

A

This appoints the State Administrator as the representative to be served legal papers on behalf of a registrant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Define an Institutional Buyer

A

These are entities who make security transactions on a large scale for their own accounts or for institutional clients,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Name examples of an institutional buyer

A 
An insurance or Investment Company
Trust Companies
Broker-Dealers
Investment Advisers
Banks/Savings Institutions
Employee Pension Plans 
Profit Sharing Plants
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Who cannot be an institutional buyer?

A

They cannot be individuals of the general public

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Define a qualified purchaser

A

This is a natural person (and their spouse) or a family-owned company with investments
Worth AT LEAST 5 Million Dollars

A Trust Fund backed by qualified purchasers with investments
Worth AT LEAST 5 Million Dollars

or an Institution with investments of
AT LEAST 25 Million Dollars

Qualified is 5x5=25

32
Q

What is an exclusion?

A

This means that the person, entity, or thing

DOESN’T meet the DEFINITION therefore is EXCLUDED from the group in question

33
Q

What is an exemption?

A

This means that the person, entity, or thing
DOES meet the definition of the group, BUT
have been RELEASED from the obligations of the group

34
Q

Under the USA, who doesn’t have to register?

A

If something is excluded or exempt, the do not have to register

35
Q

Define a Broker-Dealer

A

This is a person, or firm, engaged in the business of

BUYING or SELLING securities for the ACCOUNTS of OTHERS or for its OWN ACCOUNT

36
Q

What does firm acting in an agency capacity do?

A

They are considered a BROKER in the business of
effecting transactions for the accounts of OTHERS
and charges a COMMISSION

37
Q

What does a firm acting in a principal capacity do?

A

They are considered a DEALER in the business of

effecting transactions for its OWN ACCOUNT

38
Q

Who are excluded from the definition of a broker-dealer?

A 
Agents 
Issuers (except when transaction business in securities OTHER THAN ITS OWN) 
Banks
Savings Institutions 
Trust Companies
39
Q

What is the broker-dealer institutional exclusion?

A 
This exclusion is when a broker-dealer 
has NO PLACE of business in the state 
AND 
ONLY effects transactions with other 
Broker Dealers 
Institutional Investors 
or Issuer of the Security Involved
40
Q

What is the snowbird exclusion?

A

When a broker dealer has no place of business in a state
AND only effects securities transactions with

EXISTING customers who are
TEMPORARILY in the state
and
NOT RESIDENTS of the state

41
Q

What 2 conditions must be met to be excluded from definition of a broker-dealer?

A 
The entity/person has 
No place of business in the state 
Customer must be either an 
INSTITUTION 
or in the state 
TEMPORARILY
42
Q

What do Broker Dealers trading in an agency capacity earn?

A

These broker dealers earn commissions

43
Q

What do Broker Dealers trading in a principal capacity earn?

A

These broker dealers earn a mark up or mark down

44
Q

When are Canadian Broker Dealers and their agents exempt?

A

They are exempt when dealing with
EXISTING Customers
TEMPORARILY in the US

45
Q

Broker Dealers have what requirements?

A

They have net capital requirements and may have surety bond requirements

46
Q

What agents may be excluded from registration?

A

Issuer Agents

47
Q

When are broker dealer agents not required to register when servicing existing clients?

A

Existing clients that are
Temporarily in other states for 30 days
or
New residents in other states for 60 Days

48
Q

What is the definition of an Investment Adviser?

A

ABC
Advice
Business
Compensation

49
Q

Under the USA, how are M&A Advisers/Finders defined?

A

The could be defined as broker-dealers

50
Q

What does an M&A adviser do?

A

The advise on the acquisition of companies

51
Q

What does an M&A Finder do?

A

They find companies that may be acquired

52
Q

When is an M&A professional defined as a broker-dealer?

A

When they are being compensated on the closing of the deal

53
Q

When must a broker dealer notify the administrator of material changes in their registration?

A 
They must notify the Administrator PROMPTLY of any material changes 
Also applies to 
AGENTS 
Investment Advisers 
Investment Adviser Representatives
54
Q

Under the Investment Advisers Act of 1940, define an investment adviser:

A

The Investment Advisers Act of 1940 defines an investment adviser as a person who accepts compensation in the form of a flat fee or a percentage of assets under management, for the service of offering investment advice regarding the purchase or sale of securities.

55
Q

What may an Administrator require on an agent’s application for registration?

A

They may require the applicant to submit
Specific information on an agent application

Applicants Qualifications
Business History 
Any injunctions or administrative orders involving 
a Security
Any Convictions for 
misdemeanors involving securities 
ANY felony convictions

Their financial condition and history

56
Q

According to the USA, what records must be kept on file by an investment adviser?

A

They are required to keep
Various journals and ledgers reflecting client activity and positions
Client Assets Liabilities, and Financial Dealings

NOT
a List of Prospects
or Beneficiary Designations

57
Q

What does the Administrator do when a registered investment advisor representative dies?

A

They would CANCEL the registration

REVOKE is when the person has given cause for disciplinary action

WITHDRAWAL is accomplished upon petition by the REGISTRANT

58
Q

Who is an agent (RR) of a broker dealer required to register with?

A

A self-regulatory organization (SRO) - who will register with FINRA

59
Q

Who is an agent required to register with?

A

SRO - FINRA

Any state in which they conduct securities business with retail customers that reside in the state

60
Q

What materials may an Administrator require to be filed?

A 
Balance Sheets 
Reports 
Advertising
Marketing
Sales Materials
61
Q

When must record amendments be filed?

A

Record Amendments must be filed promptly and can caused registration applications to be delayed 30 days

62
Q

When can Administrators audit records?

A

They may audit records at any time of firms located within the state or out of the state

63
Q

When are withdrawals effective?

A

Withdrawals are effective for 30 days after filing form U5

The Administrator maintains jurisdiction for 1 year

64
Q

When must an Administrator supply the opportunity for a hearing?

A

The administrator must schedule this within 15 days of a request

65
Q

What are grounds for denial, suspension or revocation of registration?

A

Conviction of any felony within the past 10 years

Any money or securities related misdemeanor with in the past 10 years

66
Q

When is registration effective?

A

30 days from filing

and it expires on December 31 of each year unless renewed

67
Q

When does registration expire?

A

On December 31 of each year unless it is renewed

68
Q

What must all persons registering submit?

A

An application
Consent to Service of Process
Pay a Filing Fee
Pass a Qualification Exam

69
Q

What is a solicitor required to do?

A 
They must be registered as IAs or IARs 
They must supply clients with 
IA Brochures 
and 
Solicitors Disclosures
70
Q

What forms do Investment Advisers use to register?

A 
They use for ADV
Which includes 
Part 1A and Part 1B 
&
Part 2A and Part 2B
71
Q

What is form ADV Part 2A?

A

Investment Adviser registers form ADV Part 2A and is about firm services (Brochure)

72
Q

What is form ADV Part 2B?

A

Investment Adviser Registers Form ADV Part2B to include info about the IARs (Brochure Supplement)

73
Q

Where do Investment Advisers with $100-$110million register?

A

They may choose state or SEC registration

74
Q

Who is included in the definition of Federal Covered Adviser?

A

Investment Advisers of Investment Companies
Investment Advisers with $110 in AUM
Private Fund Advisers with more than $150 in AUM

75
Q

What are Investment Adviser exemptions?

A

If the investment adviser has no place of business in the state they may use

institutional
or
de minimis exceptions

22.05 S63 Course (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions