T/F Exempt Non Exempt Flashcards
1
Q
YES/NO- Is a U.S. Treasury Bond a Security
A
Yes
2
Q
YES/NO-Is an Annuity that pays the same amount each month a Security
A
No - fixed annuities are specifically exempted from the definition of “securities”
3
Q
YES/NO- Is an Annuity that pays varying amounts of money each month a security
A
Yes - The return of variable annuities is tied to the return on the underlying separate account and because the account is generally invested in securities the variable annuity is considered a security
4
Q
YES/NO-Is a certificate of interest in a profit sharing agreement a security
A
Yes - Certificates representing interests in pension and profit-sharing plans are included in the definition of “securities”
5
Q
YES/NO-Is a Keogh (HR-10) Plan a Security
A
NO- A Keogh plan is a retirement plan in which securities can be purchased or placed but it is not a security itself
6
Q
YES/NO- Is a Collateral trust certificate a security
A
Yes-
7
Q
YES/NO- Is a preorganization certificate a security
A
Yes-
8
Q
YES/NO- Is a savings and loan account passbook a security
A
No- A Passbook is not transferable and is not a security. Withdrawals may be made only by a person whose signature is file for that specific account
9
Q
YES/NO-is an interest in real estate condominium a security
A
Yes
10
Q
YES/NO- Is a Term insurance policy a security
A
No- Term Policies are specifically exempted from the definition of securities
11
Q
YES/NO-Is an interest in farmland or animals a security
A
Yes-
12
Q
YES/NO- is a final prospectus for an oil and gas corporation a security
A
No- a prospectus is a document that constitutes an offer to sell specific securities the prospectus itself has no monetary value and is not transferable
13
Q
YES/NO- is an option contract for wheat a security
A
Yes-
14
Q
YES/NO- is an interest in whiskey warehouse receipt a security
A
Yes-
15
Q
YES/NO-Is an interest in an oil and gas drilling program a security
A
Yes-
16
Q
YES/NO- is evidence of indebtedness such as an interest in a condominium pool a security
A
yes
17
Q
YES/NO- is an American express money order a security
A
No- a Money Order has a set value and is not an investment that could be transferable for profit to a third party
18
Q
YES/NO- Is a written confirmation of a sale of AT&T common stock
A
NO-a confirmation of a securities transaction is used to confirm the particulars of the transaction, but it is not itself a security
19
Q
YES/NO- Is an interest in a multilevel distributorship arrangement a security
A
Yes
20
Q
YES/NO- Is an interest in a merchandise marketing plan a security
A
Yes
21
Q
YES/NO- Is an interest in an oil, gas or mining title or lease, or payments out of production under such a title or lease a security
A
yes
22
Q
YES/NO-does a Unincorporated investment club fit the definition for a person?
A
Yes
23
Q
YES/NO-does the Canadian national government fit the definition for a person?
A
Yes
24
Q
YES/NO-does the State of New York fit the definition for a person?
A
Yes
25
YES/NO-does Microscam.inc fit the definition for a person?
yes
26
YES/NO-does an individual investor fit the definition for a person?
yes
27
YES/NO-does a Securities brokerage firm fit the definition for a person?
Yes
28
YES/NO- does a Primary Transaction fit the definition of a nonissuer transaction
No- any transaction involving the primary offering of securities is considered an issuer transaction
29
YES/NO- does a Transaction between persons on a stock exchange fit the definition of a nonissuer transaction
Yes- any transaction in the secondary market such as trades on an exchange are considered nonissured transactions
30
YES/NO- does a Stock Offering by Kelptek Inc fit the definition of a nonissuer transaction
No- An initial offering of stock from a corporation is considered an issuer transaction
31
YES/NO- does a Trade between two OTC brokers fit the definition of a nonissuer transaction
Yes- any transaction in the secondary market such as trades between over the counter broker-dealers or market makers are considered nonissuer transactions
32
Is an agent a broker-dealer?
NO- an agent represents a broker-dealer
33
Does the term agent include an individual who effects transactions in municipal securities for a broker-dealer
Yes-
34
Does the term agent include an individual who represents an issuer in effecting transactions in six month commercial paper
NO-If the person had been effecting the transactions in commercial paper for a broker dealer rather than an issuer the individual would be considered an agent
35
Does the term agent include an individual who effects transactions In common stock
yes
36
Can agents only be individuals?
yes
37
Is a partner of a broker-dealer an agent if she attempts to effect securities transactions but is not successful at the attempt?
Yes- the Uniform Securities Act does not distinguish between attempting to effect a transaction and successfully effecting a transaction
38
does the term AGENT include person who represents an issuer in a transaction with and underwriter
NO- an individual who effects transactions with an underwriter on behalf of an issuer is not considered an agent
39
Is a bank the specifically sells portfolio and investment advise an investment advisor as defined under the USA
No- Banks, savings and loans and trust companies are not included in the definition of investment adviser
40
Is an accountant who designs a portfolio approach for a client to include tax strategies and charges for this services an investment advisor as defined under the USA
No- Lawyers, Accountants, engineers and other professionals who advise others on investments incidentally to the practice of their own professions are not included in the definition of investment adviser
41
Is a broker-dealer that helps a client construct a suitable portfolio and charges a small fee for this service an investment advisor as defined under the USA
yes
42
Is a person who sells to subscribers his own investment advice letter on specific investments and who has no direct contact with the subscribers an investment advisor as defined under the USA
Yes
43
Is a publisher of a business news magazine with a national circulation an investment advisor as defined under the USA
No- the publisher of a general circulation, business and financial newspaper or magazine that does not provide individualized advice are not included in the definition of investment adviser
44
Is a person who sells investment advice regarding US government securities an investment advisor as defined under the USA
Yes
45
Is a person acting as an investment adviser who has not been designed by the state administrator as exempt an investment advisor as defined under the USA
yes
46
T/F - in a new offering of Shares of Acme Sweatsocks inc the company itself would be considered the issuer
True
47
T/F- The term issuer does not distinguish between persons who issue and persons who propose to issue securities
True
48
T/F- When Kelptek Inc Issues bonds the president of the corporation is considered an issuer
False - The President is not considered an issuer because it is the corporate person, Kelptek inc that is issuing the securities
49
T/F- The administrator may require minimum net capital for broker-dealers
True
50
T/F- The Administrator may require a surety bond
True
51
T/F- Officers of a broker-dealer may be required to take registration examinations after the broker-dealer is registered in the state
True
52
T/F- When an agent changes his place of employment, only the new employer is responsible for notifying the administrator
False - The Agent, new employer and the former employer all must notify the administrator
53
T/F - an agents licenses is effective only while the agent represents a registered broker-dealer
True
54
T/F- The Uniform Securities Agent State Law Examination is accepted by most states which means that the administrators will have no further examination requirements for agents
False- the administrator may require other exams in addition to the USASLE of any reasonably defined class of persons (such as broker dealer, state registered investment advisers ....)
55
T/F- anapplication is the only document that needs to be filed if a broker-dealer, an agent or an inverstment adviser is to be grandted registration by the state administratior
False- A consent to service of process and a filing fee also must be filed to obtailn a registration
56
T/F- An application must contain whatever information the administrator requires
True- an administrator may ask for any information he deams necessary
57
T/F-An Applicats Financial Conditiona nd histroy are not registration considerations
False-Registerd broker-dealers and state registered investment advisers must file regular financial reporst with the state administrator
58
T/F- an Appliocats proposed method of doing business is a registration considersation
True
59
T/F- Unless the administrator rules otherwise the investment adviser of a registerd investment company must maintain records for 3 years
False - The investment adciser of a registered investment company must register with the SEC only. Recordkeeping and reporting requirements are established by the SEC. State Administrators have no jurisdiction over federally registered investment companies
60
T/F- Sales MAterials and advertisment for registered investments companies muse be filed with the administrator before they are used
False- Under NSMIA and the USA registered investment companies are exempt from state registration and reportig requirments
61
Exempt Security / Non Exempt Security- Over the counter Call Option
Non Exempt
62
Exempt Security / Non Exempt Security- Security issued by the national goverment of Germany
Exempt
63
Exempt Security / Non Exempt Security- Security issued by a province of Canada
Exempt
64
Exempt Security / Non Exempt Security- Security issued by a political sub division of Mexico
Non Exempt- The only political subdivisions that are granted exempt status are in Canada
65
Exempt Security / Non Exempt Security- U.S, Treasure note
Exempt
66
Exempt Security / Non Exempt Security- Church bond
Exempt
67
Exempt Security / Non Exempt Security- Commercial Paper
Exempt
68
Exempt Security / Non Exempt Security- U.S Treasury Bill
Exempt
69
Exempt Security / Non Exempt Security- First Offering of Stock issued but a manufacturing company
Non Exempt
70
Exempt Security / Non Exempt Security- Stocks issued by Madre Merryl Federal SAvings and Loan Association
Exempt
71
Exempt Security / Non Exempt Security- Common Stock in seven Seas Freightways
Exempt- This corporation is a common carrier subject to the ICC
72
Exempt Security / Non Exempt Security- Stock listed exclusively in the London Stock Exchange
Non Exempt- Securities listed on the U.S. securites exchange are exempt
73
Exempt Security / Non Exempt Security- Preferred Stock issued by Amalgamated Featherbedders of Canada andListed on the NYSE
Exempt
74
Exempt Security / Non Exempt Security- Certain Nasdaq securities in certain states
Non Exempt or Exempt- Some Nasdaq secirotes are exempt and others are not
75
Exempt Security / Non Exempt Security- Interest in Warehouse reciepts
Non Exempt
76
T/F Consdering exemptr transactions under the Uniform Securities Act - An agnet isnot required to be registerdin a state if the transaction he solicitis is exempt
False- an agent must be registered to make soliciations in a stte whether the securtiyt is exemt or non exempt for example to sell municipals in another state the agent must be registered in that other state
77
T/F Consdering exemptr transactions under the Uniform Securities Act - A private placement is a method of selling nonregistered securities
True - Registration is not required if the securities are not distributed by means of public offering
78
T/F Consdering exemptr transactions under the Uniform Securities Act - a sale oto a sophisticated investro such as an insruance company is an exempt transacton whether or not the security soldis exempt
True
79
T/F Consdering exemptr transactions under the Uniform Securities Act - An Agent may solicit orders in unregistered securities if his clients will sign a statemnt that orders are unsolicited
False- The key word is Solicit, One can not solicit orders and than claim they were unsolicited
80
T/F Consdering exemptr transactions under the Uniform Securities Act - an agent may execute secondary trades in a nonexempt unregistered securities if he limits the number of transactions to no more than 10 in a 12 month period
False- The number of nonexempt unregistered secondary transactions (nonissuer) that can be made varies by state. For example one state might permit only one transaction in any 12 month period- Don not confuse this regulation with the rules governing private placement which limits offerings to no more that 10 non accredited investors in andy 12 month period. Private placements are primary(issuer) transactions
81
T/F Consdering exemptr transactions under the Uniform Securities Act - a Manual exemption provides for an exempt transaction it deos not make the security itself exempt
True
82
T/F Consdering exemptr transactions under the Uniform Securities Act - Uncolicited orders are exemt transactions
True- The burdon of proff that a transaction is unsolicited lies with the agent
83
T/F Consdering exemptr transactions under the Uniform Securities Act - All exectutor transactions are exempt
true- Executors are fiduciaries, therefore the transactions are exempt
84
T/F Consdering exemptr transactions under the Uniform Securities Act - No commissions may be charged in a private placement transaction if the transaction is to qualify as an exempt transaction
True- under the USA no commissions may be paid for soliciitng nonacredited investors
85
T/F Consdering exemptr transactions under the Uniform Securities Act - a Manual trasaction allows a security to be offered even if it is not registered ina satee
True
86
T/F Consdering exemptr transactions under the Uniform Securities Act - a Private Placement involves the sale of exemt securities
False-a private placement is an exempt transaction of nonexempt securities
87
Yes/No Is this action in compliance with the Uniform Securities Act- An Investment adciser assigns and advisory contract after providing written notice to the client
No- Written consent is required from the client
88
Yes/No Is this action in compliance with the Uniform Securities Act- An Adciser notifies his client that the president of the advisory corporation has left to start his own business
No- Notification is necessary when the adviser is participant in a partnership but not when the adviser is a participant in the corporation
89
Yes/No Is this action in compliance with the Uniform Securities Act- An Investment adviser and his client enter into a contract that calls for the adviser to recieve a fee of $10,000 plus 30% of any profits or less 40% of losses
No
90
Yes/No Is this action in compliance with the Uniform Securities Act- An incestment adviser and his client enter into a contract that cfalls for the adviser to recieve $10,000 or 1/2% of the average annual assets whichever is greater
Yes
91
Yes/No Is this action in compliance with the Uniform Securities Act- An investment adviser takes custondy of a clietns securites and money with no further action on the advisers part. There is no rule against such activity and he has a written contract with the seller
No- an investment adviser must provide notice to the administrator ifhe has or may have custody of customer funds or securities
92
Yes/No Is this action in compliance with the Uniform Securities Act- a new investment adviser that as of yet has no customers norifies the administrator that it intends to have custody of customer assests. ther is no rule agains such activities
Yes- if an adviser has (or may have in the future) custody of costomer funds or securtities the administrator must be notified
93
T/F- The Administrator must give notice of his orders to persons negatively affected
True
94
T/F- Any person negatively affected by an order of an administrator must be offered a hearing
True
95
T/F- Suspension of an agent is reason enough for an administrator to suspend automatically the agents entire Firm
False
96
T/F-Suspension of an officer or a director of a brokerage firm does nto authorize the administrator to proceed against the entire firm
false
97
T/F-If the administrator finds that it is in the pulic interest to do s he may deny an investment adisers registration on teh gourns of lack of experience
False- The administration can not use lack of experience alone to determine qualification
