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Series 66 > Series 66 Chapter 1 > Flashcards

Series 66 Chapter 1 Flashcards

1
Q

Who enforces federal securities laws?

A

SEC, FINRA, Exchanges

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2
Q

Securities Investor Protection Act of 1970

A

Established SIPC (provides protection for customers of bankrupt securities firms)

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3
Q

Nation Securities Markets Improvement Act of 1996 (NSMIA)

A

When federal and state law are the same, Federal Law has primary jurisdiction.

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4
Q

Any rule that includes a calendar year

A

Federal law

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5
Q

Person

A

individual, joint account, partnership, corporation, gov, association, NOT minor

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6
Q

NASAA

A

North American Securities Administrator Association

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7
Q

Exempt Security

A

Does not need to be registered on the state level to be issued publicly

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8
Q

Issuer transaction (Primary Market Transaction)

A

trade where issuer receives money from sale of securitites

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9
Q

Non-Issuer Transaction (Secondary Market Transaction)

A

a trade where proceeds of sale are received by an investor instead of an issuer

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10
Q

In-the-State

A

a person will be considered in the state if any offer or sale occurs in the state

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11
Q

Issuer transaction - exempt or not?

A

non-exempt

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12
Q

Non-Issuer Transaction - exempt or not?

A

exempt

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13
Q

Deny- Suspend- Revoke- Cancel-

A

Deny- person or security wishing to register did no satisfy state law req. Suspend - reg. person violates state law and is suspended for lim. period of time Revoke- reg. person violates state law and is indefinitely banned from registration in that state Cancel - reg. person has died, deemed mentally incompetant, missing, or allowed reg. to expire. No violation has been committed.

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14
Q

Broker-Dealer Exemption

A

must register in states where its locations are, but not other states (if a BD does not have a place of business in that state)

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15
Q

Broker-Dealer Exception

A

does not have to register in any states as a BD. An issuer, an agent (if a BD still records trades) Banks, savings institutions, credit unions, insurance companies, and trusts

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16
Q

Clients who may be charged performance based fees

A

Registered Investment Companies (mutual funds, etc), Qualified Clients -individual with 2 mm net worth -Individual with 1 mm under management -Qualifed purchaser of 3(c)(7) funds -employee of investment adviser for at least 12 months and has participated in investment activities Non US Residents 3(c)(7) funds

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17
Q

3(c)(7) funds

A

typically hedge funds made up of qualified investors only -individuals must have 5mm in investments

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18
Q

Non IA Exceptions (do not register in any state)

A

Broker-Dealer Financial Institutions Professionals giving advice that is part of job description Newspapers and magazines

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19
Q

Non IA Exemptions (must register in own state)

A

Persons having no place of business in the state

20
Q

What is a recommendation to trade a security?

A

Offer

21
Q

What is a trade of a security?

A

Sale

22
Q

What is a gift with financial risk?

A

Offer and a Sale

23
Q

If there is no money to be risked now or later?

A

Neither offer nor sale

24
Q
A
25
Q

Regulates trading of outstanding securities - rules to prevent manipulation

A

Securities Exchange Act of 1934

26
Q

Securities Act of 1933

A

Regulates the registration of new issues - includes the rule of “full and fair disclosure”

27
Q

Provides for regulation and registration of investment advisors with SEC

A

Investment Advisers Act of 1940

28
Q

Provides for the regulation and registration of investment companies with SEC

A

Investment Company Act of 1940

29
Q

Established SIPC (provides protection for customers of bankrupt securities firms)

A

Securities Investor Protection Act of 1970

30
Q

When federal and state law are the same, Federal Law has primary jurisdiction.

A

Nation Securities Markets Improvement Act of 1996 (NSMIA)

31
Q

a salesperson representing a broker-dealer or issuer in selling securities

A

Agent

32
Q

a person or firm trading for themselves and for the accounts of others

A

Broker-Dealer

33
Q

A person who charges fees for offering investment advice about securities.

A

Investment Adviser (IA)

34
Q

any employee of an investment adviser except for clerical employees

A

Investment Adviser Representative (IAR)

35
Q

a corp. or gov. who issues or plans to issue securities. According to state law, partnership may not be an issuer

A

Issuer

36
Q

trade where issuer receives money from sale of securitites

A

Issuer transaction (Primary Market Transaction)

37
Q

a trade where proceeds of sale are received by an investor instead of an issuer

A

Non-Issuer Transaction (Secondary Market Transaction)

38
Q

dividends, interest and/or principal are guaranteed by institution not issuer (insurance company, gov, etc) Capital gains may not be guaranteed

A

Guaranteed Security

39
Q

a person will be considered in the state if any offer or sale occurs in the state

A

In-the-State

40
Q

violation has been committed or is about to be committed. If so, administrator has right to investigate possible violation and force people to submit records or testimonies.

A

Proper Cause

41
Q

based on the performance of the account in relation to an index of similar types securities. If account outperforms, adviser receives more compensation, vis versa.

A

Fulcrum Fees

42
Q

A person with no place of business in the state may offer advice to an unlimited number of insitutional clients, but no more than 5 non-institutional clients within 12 months.

A

De minimis exemption

43
Q

Broker-Dealers, credit unions, savings and loan companies, insurance companies, investment advisers and pension funds with at least 1mm under management.

A

Institutional Clients

44
Q

individual, joint account, partnership, corporation, gov, association, NOT minor

A

Person

45
Q

an enforcer of rules and regulations of the securities industry within the state. Nominated by governor and approved by state legislature

A

State administrator (Commissioner)

46
Q

typically hedge funds made up of qualified investors only -individuals must have 5mm in investments

A

3(c)(7) funds

Series 66 (6 decks)

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