Sec. 1 - Ch.9: Financial Services Regulations Flashcards
What is the 3 part definition for determining who is an investment advisor, stated by the Investment Advisors Act of 1940?
**Think the A,B,C’s
- A person who provides ADVICE or issues reports or analysis regarding securities
- A person who is in the BUSINESS of providing such services
- A person who provides such services for COMPENSATION
What is the SECs definition of compensation?
The receipt of any economic benefit
- This includes commissions on the sale of products
What is the SECs definition of “family office”?
- Provides investment advice to family members only
- Is wholly owned and controlled by family members
- Does not hold itself out to the public as an investment advisor
Who regulates equity indexed annuities?
The states
- The SEC is barred from oversight of these products
What is the Wrap Brochure rule in regards to ADV Part 2?
- It is when a RIA is required to identify whether any related persons are portfolio managers and what, if any, conflicts of interest are present
What is the Final Rule in regards to ADV Part 2?
- It is when an RIA whose Brochure has materially changed since the last annual updating to deliver to each of its clients a Material Change Summary within 120 days after the end of the fiscal year
- If obligates the RIA to deliver a current Brochure to any client before or at the time the RIA enters into an advisory agreement
What is Form CRS?
A uniform disclosure document prescribed by the SEC; it is intended to enhance investors protection by providing succinct and relevant info to retail investors
What form is filed when a investment advisor ceases operations? How long must they keep records on file?
ADV-W
- Records must be kept on file for no less than 5 years from the end of the fiscal year at the last recorded entry
When selling variable contracts, the representative must hold what 2 following licenses?
- A series 6 or 7 license
- A variable state life insurance license
